Carbon Markets

UPDATE: Australian Government sets 2035 emissions target – Analyst reaction and market implications

The Prime Minister has today announced Australia’s 2035 emissions target and updated Nationally Determined Contribution (NDC). In line with our earlier analysis, a target range has been set at 62 to 70 per cent on 2005 levels by 2035, at the lower end of the Climate Change Authority’s initial recommendation of between 65–75%.

In this update, we provide immediate reaction on the government’s announcement, and discuss expected market implications.

What target has the government adopted?

The Australian Government has announced it will set a target range for its updated NDC instead of a single point in time target.

A target of 62 to 70 per cent on 2005 levels by 2035 has today been announced.

It is not the first time an Australian government has set a target range. In 2010, Australia committed to a reduction of 5% below 2000 levels by 2020 under the Kyoto Protocol, with a conditional pledge to increase the target to 15-25% under certain conditions. In 2015, the Abbott Government set a 26–28 per cent target range (below 2005 levels) by 2030, which was superseded by Australia’s current 43% target.

The lower end of the government’s new target range has been framed as “achievable”, with

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