Carbon Markets

REPORT: The economic impact of the ALP’s Powering Australia Plan

Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

To reduce greenhouse gas (GHG) emissions, create jobs and grow the economy, the Australian Labor Party (ALP) has developed the “Powering Australia Plan”, underpinned by policy measures for three key sectors of the economy – Electricity, Industry & Carbon Farming, and Transport – which represented 79% of national emissions in 2020-21.

RepuTex has been engaged by the ALP to analyse the GHG emissions and economic impacts of the Powering Australia Plan.

Specifically, analysis considers the individual and aggregate impact of ALP policy settings on GHG emissions reductions relative to a reference year, job creation, direct and indirect investment, and wholesale electricity prices. Key outcomes include:

  • Accounting for new policy measures, the ALP’s Powering Australia Plan is projected to achieve a 43% reduction in national GHG emissions on 2005 levels by 2030.
  • Total investment of $75.8 billion is calculated by 2030, equivalent to 3% of Gross Domestic Product (GDP) in 2030, with the Plan leveraging $2.15 in private investment for every public dollar spent.
  • Investment unlocked by the ALP’s Powering Australia Plan is projected to create 604,000 jobs by 2030 relative to a business-as-usual scenario, 74% of which are attributed to the decarbonisation of the Electricity sector, 22% attributed to the Industry & Carbon Farming segment, and 4% to the Transport sector.

Outcomes by key policy measure include:

  • Adoption of the Business Council of Australia’s (BCA) recommendation to improve the Safeguard Mechanism represents a considerable opportunity to align federal policy with corporate commitments to reach net-zero, while creating a transparent signal for private sector investment in least-cost emissions reductions.
  • Improvements to the Safeguard Mechanism are projected to deliver 213 Mt of GHG emissions reductions by 2030, with investment in internal and external abatement estimated to create 1,600 jobs by 2030, 5 out of 6 (83%) regional areas.
  • The Rewiring the Nation policy is designed to bring forward the construction of high voltage infrastructure by lowering financial and planning barriers to the commercial development of large-scale renewable energy resources. This will support new Renewable Energy Zone development, with renewable capacity projected to grow by 26 GW by 2030, increasing to 82% of all NEM generation, up from 68% under current policy.
  • Increased renewable energy penetration is projected to result in lower electricity prices, with annual average NEM wholesale prices forecast to reduce by 18% ($11 MWh) by 2025 from today’s levels ($62 MWh), and 26% ($16 MWh) by 2030. Refer to our note on retail bill interpretation.

Analysis in this report is summarised for each policy setting, along with the aggregated impact of all policy settings collectively.

LATEST UPDATES

  • Carbon Markets

    IN FOCUS: Safeguard Mechanism Credits – Flurry of changes to proposed Safeguard crediting framework

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    The government last week tabled its Safeguard Mechanism (Crediting) Amendment Bill 2022 in the House […]

    Research Insights | December 5th, 2022
  • Carbon Markets

    UPDATE: Buy interest builds for Generic ACCUs as Safeguard Mechanism policy announcement looms

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Prices for Human Induced Regeneration ACCUs came off slightly last week, while Generic (Landfill gas, […]

    Research Insights | December 5th, 2022
  • Carbon Markets Electricity

    OUTLOOK: NEM wholesale electricity and LGC price forecast 2022-42

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Our latest Australian Electricity Outlook (AEO) for wholesale electricity and LGC prices in the National […]

    Research Insights | November 30th, 2022
  • Carbon Markets

    UPDATE: Local activity slows, but prices hold steady, as the market looks ahead to December

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Activity slowed in the Australian Carbon Credit Unit (ACCU) market last week, although prices have […]

    Research Insights | November 28th, 2022
  • Carbon Markets

    UPDATE: ACCU prices continue to firm as COP 27 comes to a late conclusion in Sharm el-Sheikh

    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone

    Prices continued to rise in the Australian Carbon Credit Units (ACCU) market last week, albeit […]

    Research Insights | November 21st, 2022
  • Download this free report

    To start your free download, simply fill in the below form. You will also receive our future updates, event invitations, and research insights by email.
    Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone