What's next for the Renewable Energy Target - resolving Australia's integration of energy and climate change policy?

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Nelson, Tim
Nolan, Tahlia
Gilmore, Joel
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2021
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Abstract

Australian climate change policy and its integration with Australia’s electricity markets have been fraught for at least two decades. The only enduring policy has been the Commonwealth Renewable Energy Target (RET). Despite the relative success of the RET in driving investment and reducing emissions, state governments have now pivoted towards contracts-for-difference (Cfds). In this article, we outline the issues associated with policy discontinuity and the large-scale RET and review its effectiveness as an emissions reduction tool and driver of electricity sector abatement. We find that the RET has been relatively successful across the key criteria of cost and emissions reductions and is a better policy instrument than contracts-for-difference, which are increasingly being adopted by state governments. Building on the work of Nelson et al. (2020), we propose a new approach, which would allow for continued use of Cfds but utilising the RET’s policy architecture.

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Australian Journal of Agricultural and Resource Economics

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© 2021 Australian Agricultural and Resource Economics Society Inc.. This is the peer reviewed version of the following article: What’s next for the Renewable Energy Target – resolving Australia’s integration of energy and climate change policy?, Australian Journal of Agricultural and Resource Economics, 2021, which has been published in final form at https://doi.org/10.1111/1467-8489.12457. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving (http://olabout.wiley.com/WileyCDA/Section/id-828039.html)

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This publication has been entered as an advanced online version in Griffith Research Online.

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Policy and administration

Environmental politics

Environment and resource economics

Applied economics

Science & Technology

Social Sciences

Life Sciences & Biomedicine

Agricultural Economics & Policy

Economics

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Nelson, T; Nolan, T; Gilmore, J, What's next for the Renewable Energy Target - resolving Australia's integration of energy and climate change policy?, Australian Journal of Agricultural and Resource Economics, 2021

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