A new report from the Morrison government’s own climate policy advisory body has told the government it needs to do more to seize the economic opportunities of a low-carbon future or risk seeing Australia left behind by a global economy moving to lower emissions.

The Climate Change Authority has released a new climate policy toolkit, updated following a destructive summer that saw large parts of Australia impacted by bushfires, which outlines how Australia can ensure its future prosperity by embracing low-carbon technologies and economic development, which could strengthen an Australian economy recovering from a series of disasters.

Key amongst its recommendations are extending funding for the Australian Renewable Energy Agency and the Clean Energy Finance Corporation, tightening the so-called Safeguard Mechanism that is designed to restrict industrial emissions, and dumping the idea of using surplus Kyoto credits to meet its Paris targets.

“The case for countries to move quickly to reduce climate change and adopt measures to build our resilience has never been stronger. The good news is the global shift to low emissions presents many opportunities for Australia,” CCA chair Dr Wendy Craik says.

“Australians are already experiencing the effects of a variable and changing climate.”

“2019 was Australia’s warmest and driest year on record – a key factor driving this summer’s catastrophic bushfire season, which caused widespread loss and devastation to Australian communities, wildlife and natural ecosystems. At the same time Australians have endured a record severe and prolonged drought.”

In the new report, the CCA has detailed a series of 35 recommendations that touch on a broad cross-section of the Australian economy, from energy, transport, industrial and agricultural industries through to expanding investment in disaster preparation and resilience planning.

The report and recommendations have been welcomed by the Investor Group on Climate Change (IGCC), which said that large institutional investors were already building their understanding of the risks climate change, and echoed the Climate Change Authority’s calls for enhanced company disclosures of climate change related financial risks.

“In updating its policy recommendations for the Australian Government, the Climate Change Authority has put forward a number of welcome proposals that recognises the critical role of investors in the zero-emissions transition,” IGCC CEO Emma Herd said.

“The Authority’s recommendations also recognise that investors and other financial market players need a clear signal for the pathway to net-zero emissions by 2050 through a comprehensive policy suite that includes a long-term national climate strategy, declining industrial emissions caps, cleaner transport, research and development and greening the finance system,”

The authority has also detailed how Australia can take advantage of an opportunity to become a leading global clean energy supplier, investing in emerging technologies that will allow Australia to tap into an export market for abundant wind and solar resources, including through the growth of a zero-emissions hydrogen fuel industry.

“The Authority is firmly of the view that strong measures to tackle and prepare for climate change will enhance Australia’s economic prosperity. However, the climate is changing at an increasing rate and countries around the world are responding. Australia must act now or risk being left behind,” Dr Craik adds in a forward to the report.

“The case for moving quickly to reduce climate change, adopt measures to build our resilience and seize the new low carbon opportunities before us has never been stronger.”

The recommendations seek to build off the existing policy framework established by the federal government but the CCA has not held back from making recommendations that the Morrison government needs to substantially strengthen existing policies, like the Safeguard Mechanism, the forthcoming National Electric Vehicle Strategy and the two primary clean energy finance bodies.

The recommendations include an extension of funding for the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC), as well as an expansion of each agency’s mandate to allow them to provide funding and investment to a wider range of economic sectors pursuing low-emissions development.

Additionally, the authority has recommended that the Morrison revisit the option of introducing a greenhouse gas emissions standard for light vehicles, and to assess its potential application to heavy vehicle transport.

The report also recommends that the Morrison government strengthen the Safeguard Mechanism, progressively reducing emissions caps placed on industrial emitters to help avoid reliance on surplus Kyoto units for meeting its 2030 Paris Agreement target, saying that the federal government should aim to use “emissions reductions achieved between 2021 and 2030” rather than any “surplus” created from meeting earlier targets.

The Morrison government has attracted significant criticism for its plans to use “surplus” credits from the Kyoto Protocol to meet its 2030 emissions target under the Paris Agreement, a plan that has been questioned as being legally dubious.

The Climate Change Authority also stressed that the Morrison government’s Underwriting New Generation Investments (UNGI) program and investments agreed under bilateral deals with State governments must align its support with priorities identified under AEMO’s Integrated System Plan and the Electricity Statement of Opportunities.

So far, these initiatives have been used to line up investments in new fossil fuel developments, including the development of gas resources in New South Wales and a potential new coal-fired generator in Queensland, while not necessarily being grounded in the needs of the energy system identified in AEMO’s planning reports.

In issuing the new recommendations, the Climate Change Authority has said that acting on climate change is a significant opportunity for the Australian economy but also warned that it risks being left behind if it fails to act on the opportunities being created in low-emissions transport, industrial, electricity, agriculture and land, and waste sectors.

“We need to position our economy for the coming changes in global trade and investment markets and seize on the opportunities before us, or risk being left behind,” Dr Craik added.

The Climate Change Authority was formed by the Gillard government to provide advice on climate change targets and policies but has had a severely diminished role under successive Coalition governments which has steadily cut funding, leading to the resignation of some key founding directors. However, the agency remains in existence with reduced staff.