Key messages:

• People on low incomes or experiencing disadvantage are more vulnerable to climate change impacts and a poorly managed transition to clean economy.
• Australia needs a credible, stable, low-cost and equitable emissions reduction mechanism for the energy sector (and the economy more broadly) to contribute to more affordable energy prices and limiting dangerous global warming.
• The modelling in this reports shows that, with the right settings, the National Energy Guarantee (or similar mechanism) could drive rapid emissions reductions in the electricity sector and put downward pressure on energy prices.
• Higher emissions reduction targets for the energy sector provides more “bang for your buck”, producing significantly more emissions reductions than lower targets with similar savings to residential retail prices.
• The issue of equity needs to be better dealt with. Excluding Energy Intensive Trade Exposed Industries (EITEs) for the National Energy Guarantee would shift costs to other consumers. Where there is a need, highly vulnerable groups such as people on low incomes, affected workers and communities, and EITEs, should be supported to ensure they are not worse off.
• Alongside an emissions reduction mechanism, further opportunities exist, and should be implemented in parallel, to make energy bills more affordable and reduce the disproportionate burden on people with low incomes.

Editor's note:

This is one of three reports in a series on improving support for low-income households through the transition to clean energy. The other two reports can be found at:

• Energy stressed in Australia
• Affordable clean energy for people on low incomes