Bids on the next emissions reduction milestone are being tallied by the federal climate advisor as Australia prepares to update its targets.
Declared levels for 2035, as a milestone to net zero carbon emissions by mid-century, are required under the Paris Agreement to limit global warming to well below 2C.
Australia’s emissions must be reduced by more than 70 percent by 2035, compared to 2005 levels, the Carbon Market Institute (CMI) has told the Climate Change Authority.
A jet fuel emissions trading scheme for all domestic airlines and a special scheme for heavy vehicles are among CMI’s recommendations to achieve the target.
Big polluters are already using carbon credits to buy them time to develop cleaner industrial technology and commercially viable alternative fuels.
The institute said in its submission special trading schemes for transport could encourage the use of sustainable aviation fuel by domestic carriers and renewable diesel and biofuels uptake for heavy vehicles.
CMI acting chief executive Kurt Winter said Australia was in an “urgent race to net zero and beyond”.
“We need to commit to cutting emissions much deeper by 2035 and to taking decarbonisation action more widely across the economy,” he said.
The institute reiterated calls for a broadening of the existing safeguard mechanism requiring more than 200 industrial facilities to cut emissions.
Instead of covering those emitting at least 100,000 tonnes in a year, the threshold could be lowered to 25,000 tonnes a year.
The federal government should also buy carbon credits generated by new carbon removal technologies and projects that offer social and environmental wins or partner with Indigenous land managers, the submission said.
Carbon trading is one of the tools Australia and other advanced economies are relying on to get to net zero by mid-century.
“Carbon markets will have an important supporting role to play in these efforts, but the primary focus should always be on at-point emissions reduction,” Mr. Winter said.
Overhauling the electricity grid is also key to reducing the country’s emissions by 43 percent this decade under the existing 2030 pledge.
Energy production is still the largest source of Australia’s carbon emissions, followed by transport, agriculture and industrial processes.
