Leading climate policies from Australia’s states and territories

Since the Paris Agreement was signed in 2015, countries around the world have increasingly recognised climate change as a shared challenge and begun to implement emissions reduction plans.

Subnational governments, both in Australia and globally, play a vital role in the global energy transition by implementing innovative local policies, establishing regulatory frameworks that promote renewable energy, attracting investment and setting emissions reduction targets in support of national and international goals.

In late 2024, every Australian state and territory government has set targets to achieve net zero emissions by 2050 or sooner, with most outlining bold interim goals to accelerate progress.

Combined, these state and territory targets add up to an estimated 40–44 per cent reduction in Australia’s emissions from 2005 levels by 2030, putting Australia’s legislated 2030 national emissions target of 43 per cent within reach – provided state and territory governments deliver on their targets. 

Looking ahead, state and territory climate targets add up to an estimated 66–71 per cent reduction in Australia’s emissions from 2005 levels by 2035, revealing 71 per cent can act as a floor for Australia’s upcoming 2035 target – its next nationally determined contribution under the Paris Agreement. 

Last year, Climateworks Centre released its 2023 decarbonisation scenarios, which show how Australia can reduce its emissions, at least cost across the economy, in line with the Paris Agreement goals.

In a scenario where Australia does its part to limit global warming to 1.5 degrees Celsius, emissions decline by 85 per cent by 2035 and reach net zero by 2039. In a well-below-2 degrees scenario, emissions decline by 61 per cent by 2035 and reach net zero by 2050.

Climateworks’ 2023 decarbonisation scenarios show that significant change would need to occur in each economic sector to realise either temperature goal. 

In this report on state and territory climate actions and opportunities, we have analysed current state and territory climate policies and programs announced before September 2024.

We highlight noteworthy initiatives and policies across six sectors of the Australian economy, with those sectors being broadly aligned with the Australian Government’s sectoral pathways and plans developed throughout 2024.

Our analysis shows that states and territories are making legislative changes and providing incentives and support to reduce emissions in each sector, as summarised below.

Electricity

Six states and territories have renewable energy targets of at least 50 per cent by 2030, and five have renewable energy targets of at least 80 per cent by 2035. Some jurisdictions have also set energy storage and energy efficiency targets.

Since 2020, Tasmania has generated 98 per cent of its electricity from renewables, and the Australian Capital Territory has achieved 100 per cent renewable energy through contract agreements. In 2023, South Australia generated 70 per cent of its electricity from renewable sources. 

Transport

Half of the states and territories have new car sales targets for electric vehicles, and charging infrastructure is being rolled out with government support and investment.

Public and active travel are on the rise through expanded urban rail networks, the rollout of electric buses and walking and cycling infrastructure developments.

Buldings

State and territory governments are increasing support for energy efficiency building upgrades, including for social housing in all jurisdictions and better building standards.

Residential rooftop solar installations continue to increase, with almost 4 million systems installed across Australia as of August 2024.

The Australian Capital Territory and Victoria are implementing gas phase-out plans.

Industry

State and territory governments are supporting industry decarbonisation through grant schemes and educational programs.

New South Wales and Western Australia governments are planning to integrate renewable energy into designated industrial precincts; most state and territory governments are supporting the development of renewable hydrogen industries.

State and territory-owned water utilities are setting ambitious net zero targets and diverting some waste from landfills.

Note:  In Climateworks’ analysis, the industry sector includes iron and steel production, chemicals (ammonia, explosives, fertilisers, rubber), manufacturing (alumina, cement, paper, textiles) and other industry (waste, water, construction services). This is equivalent to the national industry and waste sector. Industry and Resources sectors were amalgamated in Climateworks’ 2021 report, State and territory climate action: Leading policies and programs in Australia. They have been disaggregated in this analysis to better reflect the Australian Government’s sectoral emissions reduction plans. 

Resources

The Queensland and Western Australia governments are developing electricity grid upgrades to unlock the potential for more renewable electricity to supply their mining regions and, along with the New South Wales government, are funding pilots to reduce emissions from mining, including through new technologies.

Some states and territories have implemented policies requiring large projects and emitters to assess and minimise their emissions. 

Note: In Climateworks’ analysis, the resources sector includes lithium, bauxite, coal, nickel, copper, iron ore, zinc and non-ferrous metal ore mining. It also includes oil mining and gas extraction and liquefaction.  

Agriculture & Land

Some state and territory governments are funding research to lower methane emissions from livestock and are implementing initiatives to promote low-emissions agriculture practices. Most states have programs or grants focused on land restoration. 

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The policies and programs highlighted in this report reveal that states and territories are strengthening their climate action, seeking to optimise advantage and ensure that residents benefit now and in the longer term.

Their efforts are, in turn, supporting the global energy transition.

State and territory climate targets collectively add up to a national equivalent target broadly aligned to limiting warming to well below 2ºC.

Still, significant challenges remain, and action will need to intensify if Australia is to reduce its emissions in line with the critical 1.5ºC goal. 

The challenge sits across several dimensions, not just emissions reductions. Other actions are needed to transform Australia’s economy into a globally competitive low-carbon economy.

Climateworks’ well-below-2ºC and 1.5ºC scenarios, part of our 2023 decarbonisation scenarios, show that to achieve the least-cost emissions reduction pathway and goals of the Paris Agreement, Australia would: 

• reduce emissions by 48–68 per cent by 2030, compared to 2005 levels 
• generate 83–90 per cent of electricity from renewables by 2030 
• increase the rate of new electric vehicle sales to 56–73 per cent by 2030
• improve energy efficiency and standards and electrify buildings, with emissions from the buildings sector reaching near zero between 2045 and 2050 
• increase energy efficiency and electrification and deploy zero- or low-emissions fuels and feedstock in the industry and resources sectors
• reduce direct emissions from agriculture by 18–19 per cent by 2050 and adopt sustainable land management practices.

While states and territories have made progress against these key benchmarks and have demonstrated leadership in some policy areas, they cannot do this work alone.

Australia’s sectors – and their emissions – traverse state and territory boundaries, and collaboration between state, territory and federal governments is needed to ensure Australia is on a least-cost emissions reduction pathway.

Australia has made significant progress over the last decade in its efforts to reduce emissions through policies and programs, and the leadership shown by states and territories provides a strong foundation for further action.

Provided decarbonisation occurs quickly and effectively, Australia’s abundant renewable energy resources, natural assets and skilled workforce position the country to be a world leader in the net zero transition.

Adopting a net zero mindset – i.e. integrating 1.5C-aligned climate goals into foundational policies and governmental processes across national and subnational levels, putting climate at the heart of decision-making – will allow Australia to prosper in a global net zero economy.

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ISBN: 978-1-7637231-0-8