REPORT: Meeting a 2°C target – A marginal abatement cost (MAC) curve for Australia

In becoming a signatory to the Paris Agreement, the federal government has accepted the risk of a significant future liability as Australia begins to transform its economy. At the same time, debate continues over the design of policy to meet Australia’s current and future emissions targets, including which emission reduction opportunities should be pursued, and the cost of transitioning to a 1.5-2 degree aligned emissions trajectory.

While Australia’s policy environment remains uncertain, scrutiny of the impact of climate risk on Australian businesses has grown, with the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) affirming that companies will be required to systematically monitor, disclose and discuss the risks of climate change, in line with a 1.5-2 degree pathway.

This has led to the more critical analysis of science based targets by Australian businesses as many companies seek to understand the potential cost and impact of transitioning to a 1.5-2 degree constrained pathway.

As decision makers seek robust figures from which to make more informed decisions, in this study, we provide a quantitative basis for identifying emissions reduction opportunities across the Australian economy, in the form of a marginal abatement cost (MAC) curve.

Analysis identifies over