The Productivity Commission has been asked by the Australian Government to conduct an inquiry into Investing in cheaper, cleaner energy and the net zero transformation. In its interim report, the Commission presents draft recommendations focused on three key policy reform areas:

  • Reducing the cost of meeting emissions targets
  • Speeding up approvals for new energy infrastructure
  • Addressing barriers to private investment in adaptation.

Climateworks Centre’s recommendations are:

  • Reducing the cost of meeting emissions targets
    • Recommendation 1: Recommend that the Energy and Climate Change Ministerial Council (ECMC) accelerate effective integration of demand-side energy management and performance improvements. 
    • Recommendation 2: Recommend that the ECMC determines how to provide energy users and investors with additional information to help them plan investments to optimise outcomes, including opportunities for cost reductions based on shaping demand activities around time, day, season and location.
    • Recommendation 3: Recommend revising AEMO’s approach to system forecasting and planning so that the Integrated System Plan (ISP) bases its optimal development path not on the ‘most likely’ scenario, but on the scenario that is ‘most consistent with government policy commitments’.
    • Recommendation 4: Recommend that the ECMC and energy governance bodies design an energy system that will enable Australia to become a ‘renewable energy superpower’, including analysis to forecast and plan supply, storage and transmission solutions for integrated system plans at the regional-level (‘regional ISPs’).
    • Recommendation 5: Recommend that the Australian Government ensure decline rates under the Safeguard Mechanism are consistent with the 2035 emissions reduction target and net zero goal.
    • Recommendation 6: Introduce a robust Carbon Border Adjustment Mechanism, updated regularly to ensure it remains fit-for-purpose.
    • Recommendation 7: A national road user charging scheme that prices externalities of driving and fuels, while also creating a new funding stream that supports sustainable, low-emissions transport choices.
  • Speeding up approvals for new energy infrastructure
    • Recommendation 8: Support regional planning with digital mapping tools and expanded strategic land use assessments.
    • Recommendation 9: Environment Information Australia curates a set of nationally consistent environmental metrics and measurement methods. 
    • Recommendation 10: Consider Australia’s emissions reduction targets, renewable energy targets and actions in forthcoming sector plans in approval decisions.
  • Addressing barriers to private investment in adaptation
    • Recommendation 11: Integrate the climate resilience rating system into Built Environment regulatory frameworks.
    • Recommendation 12: Outcome-based ratings reflect location-specific hazards and property characteristics, including energy efficiency and heat exposure risk.
    • Recommendation 13: The Regulatory Impact Statement for the climate resilience rating system accounts for full societal and household benefits, not limiting this to impacts on energy bills.

More details on these recommendations can be found in our submission.