The federal government will need to undertake a “substantial overhaul” of its current suite of climate policies, if it is to meet its COP21 commitment to reduce greenhouse gas emissions by 26-28 per cent below 2005 levels by 2030, the Grattan Institute has said.

The claims are made in the independent think tank’s latest working paper, Post Paris: Australia’s climate policy options, which states the current suite of policies in place (to meet the government’s current target of reducing emissions by five per cent below 2000 levels by 2020) will need to be “re-engineered, if not redesigned, to meet the 2030 target and any additional targets the government may commit to in future”.

Highlighting the Department of Environment’s calculation that meeting the 2030 target will require an abatement task of around 900 million tonnes between 2020 and 2030, thought to be achievable through “Direct Action approaches”, the authors note that policies to meet this target are not yet fully formed.

It argues that businesses are unlikely to make long-term investments to reduce their emissions unless they are confident that policies are stable”. And, it adds, “Australia has lacked political consensus on climate change policy since 2008”.

The working paper therefore assesses a range of policy options to see what could fit the bill of being credible, politically viable, flexible, adaptable, low cost, and publicly acceptable.

The options considered include:

  • cap and trade emissions trading
  • carbon taxation
  • intensity baseline emissions trading
  • emissions purchasing regulation
  • tradeable green certificates

It suggests that none of the plausible policies fulfil all of the needed criteria.

For example, it argues that cap and trade is credible and flexible, since the cap of the scheme can be set and adjusted to meet any given target, but it would only partially satisfy the political viability criterion, and its “complex design makes it hard to communicate, which means it performs poorly on the public acceptance criterion”.

In fact, public acceptance of the policies listed is generally low, due to either the complicated nature of the instrument, or that fact that it is a tax – which generally have low public tolerance. (However, the Grattan Institute suggests that emissions purchasing schemes would have higher levels of public acceptance as consumers do not bear the costs directly through price increases for essential services, such as electricity. These schemes would not have political viability though, due to that fact that the Labor Party has committed to scrap the Emissions Reduction Fund if it returns to power.)

As such, the institute has said that the task now is to “find solutions to the limitations of an individual policy, or to combine policies so that collectively they satisfy the criteria”.

It will therefore begin working on a report for “early 2016” that will recommend an overall set of policies that Australia should implement to meet its current and future emissions reduction targets.

The authors state that the report will “identify an emissions reduction policy framework that not only meets the policy objectives, but can gain both bipartisan and public support”.

“It will make recommendations to both sides of politics about the best way to meet Australia’s current and future emissions reduction goals.

“By providing policymakers with a clear roadmap the report will aim to move the debate away from the current impasse towards an emissions reduction policy framework that will both credibly reduce emissions, and that has a real chance of bipartisan support.”