UPDATE: Could LGCs deliver least cost external abatement for state policy design?

As states continue to work with industry towards achieving net zero GHG emissions targets, policymakers have sought to understand the cost and opportunity to reduce emissions across different sectors of the economy, helping to inform the design of specific policy measures to unlock identified emissions reductions.

While direct emissions abatement is a key part of policy design and planning, the cost and availability of external abatement – in the form of emissions offsets – is equally critical to ensure that industry can reduce emissions at least cost. How emissions offsets are deployed by state policymakers – and the future price and availability of eligible offsets – is therefore critical for decision makers in minimising the cost of policy.

In this update, we analyse the availability of different offset sources in Australia. Specifically, we examine how the development of an expanded pool of domestic offsets – including electricity sector offsets such as Large-scale Generation Certificates (LGCs) – may reduce the marginal cost of external abatement for industry.

In doing so, the use of LGCs for their emissions reduction value has the potential to significantly reduce the cost impact of state emissions reduction frameworks, while establishing a floor price for LGCs, incentivising new investment to support state renewable energy targets.

Restricted Access

This is a subscriber report. Please login to access this content.

Not a subscriber?

To learn more about our research services for the Australian energy and emissions markets, click the button below, or email our subscriptions team.

Sign up for regular insights

LATEST UPDATES

  • UPDATE: Could LGCs deliver least cost external abatement for state policy design?

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

    As states continue to work with industry towards achieving net zero GHG emissions targets, policymakers […]

  • WHITE PAPER: How do synoptic weather patterns impact wind market value?

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

    With the rapid expansion of wind energy production in Australia, the accurate assessment of wind […]

    Insights, Research Insights | July 31st, 2019
  • The marginal cost of net-zero emissions under the Paris Agreement

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

    Australia has ratified the Paris Agreement, which aims to ‘strengthen the global response to the […]

  • Where to for wholesale electricity prices under ‘current policy’?

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

    The 2019 federal election has been run and won, with the energy policy status quo […]

    Analyst Alerts, Research Insights | May 29th, 2019
  • INSIGHTS: So what is the current Australian carbon spot price?

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

    As the federal election draws closer, considerable attention is being paid to the ALP’s proposed […]

    Blog archive, Research Insights | May 10th, 2019
  • Share on FacebookShare on Google+Tweet about this on TwitterShare on LinkedInEmail this to someone