Decarbonisation Key to Improved Productivity

Strategic Insights -

The Carbon Market Institute's Australasian Emissions Reduction Summit highlighted the crucial role of decarbonisation in driving economic productivity, with Climate Change Authority Chair Matt Kean emphasizing the need for clear signals on the carbon market's future. The summit participants also discussed the economic benefits of accelerated climate action, with a recent EY study suggesting that Australia's supply and use of carbon credit units could boost national income by $50 billion a year by 2050. Victoria's Minister for Climate Action, Lily D'Ambrosio, urged the federal government to set ambitious emissions reduction targets, while First Nations peoples called for a leading role in efforts to fight climate change.

Key Takeaways:

  • Decarbonising the economy is crucial to delivering improved productivity, as argued by Climate Change Authority Chair Matt Kean.
  • A recent EY study found that Australia's supply and use of carbon credit units, including for export, could boost national income by $50 billion a year by 2050.
  • Deloitte's analysis estimates the cost of inaction at around US $178 trillion over the next 50 years, compared with a US $43 trillion net gain from accelerating the transition.
  • Victoria has set an emissions reduction target of 75% to 80% by 2035 and net zero by 2045.
  • First Nations peoples must be "front, centre and leading" in efforts to fight climate change, as emphasized by Founder and Chair of the WA-based Ngadju Conservation Aboriginal Corporation, Leslie Schultz.
  • Australia's focus needs to be on accelerating towards net zero, as highlighted by Carbon Market Institute interim chief executive Kurt Winter.
  • The federal government should set clear signals about the future of the carbon market to enable businesses to expand the supply of carbon credit units.
  • Giving tax deductions to farmers hosting clean energy infrastructure is a possible policy direction, suggested by Climate Change Authority Chair Matt Kean.

Statistics:

  • Australia claims responsibility for about 1% of global emissions.
  • If emissions embedded in exported coal and gas are included, Australia's share jumps to 4.5%, and could reach 9.1% by 2035.
  • The remaining global carbon budget is roughly 200 gigatonnes of CO2.
  • Deloitte's analysis puts the cost of inaction at around US $178 trillion over the next 50 years.
  • The net gain from accelerating the transition is estimated at US $43 trillion over the next 50 years.
  • The EY study suggests that Australia's supply and use of carbon credit units, including for export, could boost national income by $50 billion a year by 2050.

Sources:

  • Carbon Market Institute. (2025, Aug 13). Decarbonisation key to improved productivity. Retrieved from https://carbonmarketinstitute.org/2025/08/13/decarbonisation-key-to-improved-productivity/
  • Deloitte. (n.d.). The cost of inaction: The economic implications of climate change.
  • EY. (n.d.). The potential economic benefits of Australia's carbon credit market.