The Australia Institute has provided input to the Climate Change Authority’s (CCA) consultation on Economic Modelling.

Considering that Australia’s current Nationally Determined Contribution (NDC) toward the Paris Climate Agreement is “insufficient” against our fair share for a 1.5°C or 2°C warmed world, research supporting an ambitious 2035 NDC is hugely important.

We are concerned, however, that the modelling project as outlined in the consultation paper Economic modelling of potential Australian emissions reduction pathways is too narrow.

The consultation paper lays out that the Authority “does not propose to use this modelling exercise to assess the economic effects of physical climate change impacts, or the benefits (avoided economic costs) of greater reductions in global emissions.”

By looking only at the costs of emissions reductions in line with a 1.5°C or 2°C warmed-world, this modelling project will struggle to contextualise those costs, limiting the utility of this modelling for policymakers and debate.

We are also concerned that the proposed methodology appears to bury the most important policy question of how Australia meets its existing abatement commitments into the reference case, undermining the modelling exercise, especially in light of current emissions trends.

Also, it is important to emphasise that this kind of long-term modelling is extremely sensitive to assumptions and inputs. As such, it is crucial that the modelling is presented transparently, with full access to the models, data and methods employed. Without transparency the results of any modelling will be much less robust and fail to contribute to an informed policy discussion.