The Climate Change Authority has released the third and final report in its Special Review on the actions Australia should take to meet its obligations in the Paris climate agreement.
Authority chair Dr Wendy Craik said, when it comes to reducing emissions, one size cannot fit all.
“Australia needs a set of measures – in other words, a policy toolkit – that is well calibrated to capture reductions in different sectors,” she said.
The Authority is recommending the Government puts in place a policy toolkit that uses current measures – such as the Emissions Reduction Fund and the safeguard mechanism – as well as new measures, to allow Australia to decarbonise its economy.
“The overarching architecture for the toolkit would remain in place to help provide investment certainty while the measures themselves evolve and strengthen over time,” the Climate Change Authority said in a statement.
For the electricity generation sector, the Authority found a market mechanism, in the form of an emissions intensity scheme that would start in 2018, would be the best fit.
“We also think that an enhanced safeguard mechanism offers a pragmatic and durable way of reducing emissions across a range of industrial, manufacturing and resource sectors,” Dr Craik said.
“For households, vehicles and buildings, establishing or strengthening existing energy efficiency standards is the way to go. On the land sector, the Authority found that voluntary offsets are the best tool for the task, given the large number of landholders and the differences between farming operations.”