Decarbonising the Australian Economy Introduction

• Published date: 01 December 2024
• Author: Paul H. Jensen,Beth Webster
• Date: 01 December 2024
• DOI: http://doi.org/10.1111/1467-8462.12579

The Australian Economic Review, vol. 57, no. 4, pp. 384–386 DOI: 10.1111/1467-8462.12579

Policy Forum

Decarbonising the Australian Economy Introduction

Paul H. Jensen and Beth Webster

Abstract

For most of the last 15 years, Australia policy

on climate change has been decidedly under-

whelming, leaving us behind where we need to

be to fulfil our obligations under the Paris

Accord. But there are encouraging signs at

present that there is an emerging consensus—

amongst captains of industry, different levels

of government, policy‐makers and everyday

Australians—that we can achieve our ambi-

tions to live in a world that is far less reliant

on carbon.

For most of the last 15 years, Australia policy

on climate change has been decidedly

underwhelming, leaving us behind where we

need to be to fulfil our obligations under the

Paris Accord. More recently, however, there

has been a burst of interest in a range of

climate‐focused policies. This is partly

because the Albanese Government has

shown more interest in climate change—and

the policy responses required to mitigate the

long‐term effects of climate change—than its

immediate predecessors. Commonwealth and

State Government subsidies for household

rooftop solar has seen more than 3 million

households instal solar and behind‐the‐meter

battery installations. After years of serious,

sustained global investment in photovoltaic

cells, their cost and efficiency is now highly

competitive and potentially all domestic

household energy needs—for heating or

cooling, transport, cooking and so on—

could be supplied by solar‐powered

electricity rather than natural gas or brown‐

coal in the short‐to‐medium term.

Bigger challenges (and threats) are on the

horizon regarding decarbonising Australian

heavy industry. And this is where much of the

recent policy discourse has been focused.

Australia currently uses huge amounts of

energy—approximately 10% of the country's

entire energy usage—every year to power the

extraction, processing and exporting of

minerals from iron ore to critical minerals

such as lithium. Just one of the many inputs

into this activity, Australian miners use

approximately 5 billion litres of diesel

per year, running large trucks, graders,

excavators and loaders. How to decarbonise

*Jensen and Webster: University of Melbourne, Parkville,

Victoria, Australia. Corresponding author: Jensen, email

pjensen@unimelb.edu.au

© 2024 The University of Melbourne, Melbourne Institute: Applied Economic & Social Research, Faculty of Business

and Economics.

Published by John Wiley & Sons Australia, Ltd