Yes, your energy bills have gone up. Turning net zero into a culture war will send them higher

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Opinion

November 16, 2025 — 3.37pm

Climate change is already affecting your daily life and that of the people you love. And it will get worse: there will be more hot days when your kids can’t play outside, and more weekends where your local sports oval is off-limits because it is flooded. There will be more evenings where you get home late because your daily commute is disrupted by a major storm, and more days where your power goes off during a heatwave. These events will weaken the systems that underpin our economy and way of life: the food system, our cities and towns, health and social support, and the trade and commerce.

And yet, the Liberal and National parties have abandoned their commitment to net-zero emissions, a global goal designed to limit the worst effects of climate change.

You may not like rising energy prices, but ditching net zero won’t fix the problem.

Australia’s commitment to net zero is not a political plaything or a virtue-signalling culture war trope. It is grounded in physics and is the compass that guides us towards a flourishing economy. Throwing it away has real consequences.

Physics tells us we can limit the seriousness of climate change, by reducing greenhouse gas emissions. This reduces the extent global average temperatures rise, and cause extreme weather events.

Having a 50 per cent chance of keeping global temperature rise under two degrees, based on the best science we have, requires balancing sources of emissions with sinks of emissions by the second half of the century. Along with other developed countries, Australia’s interpretation of this is to achieve “net-zero emissions” by 2050.

This doesn’t mean someone can’t oppose Australia’s commitment. They can decide they prefer a worse chance of limiting global temperature rise – maybe they prefer a 25 per cent chance? Ten per cent? Choose a number, and physics will tell you the risks of running with that number.

They could also oppose it on the grounds that getting to net zero by 2050 is too difficult to achieve, so we should invest instead in adapting to the effects of climate change while we develop the technology to remove carbon from the atmosphere. Again, these positions are both consistent with what physics tells us.

But going down this route has an economic impact. If we put off responding to climate change, we will suffer more climate change. This is already costing you money – check your home and contents insurance premiums against what they were a decade ago. It will cost the government money too, because climate change also affects our public services and our public infrastructure. Political leaders who take this route have an obligation to tell us what it is going to cost. If they don’t, or can’t, or won’t, are they really up to the job?

There is an economic impact from reducing emissions, too. We will need to change to new technologies and ways of doing things, and that isn’t costless. To date, most of Australia’s emissions reductions have come from changes in our electricity system, shifting away from using coal and gas, and towards using solar and wind.

This shift is not increasing electricity prices. The major drivers of higher electricity prices over the past three years have been unreliable, ageing coal-fired power stations, really bad weather, the Russia-Ukraine war, and high coal and gas prices. Most of these are beyond the control of the government.

Where the government can affect energy costs is in getting the policy right: to encourage the private sector to replace coal generators that are at the end of their lives; and to help households reap the hip-pocket benefits of using clean electricity for all their energy needs.

The cheapest way to replace coal generation at the end of its life is a combination of new renewable generation, new transmission lines, storage, and some gas generation for back-up. This will be cheaper than building new coal generators and also decouple the electricity system from fluctuating international coal and gas prices.

Households can save from smart emissions reductions. If you have solar panels, you already know this. The good news is, there are more savings available. A house with solar on the roof, a battery in the shed, an electric car on the garage, and efficient electric appliances, spends around 50 per cent less on energy than a house without them.

The investment needed for this transition will still involve large sums. But much of this would have to have been spent anyway: whether that’s replacing equipment and plant that’s reached the end of its life, or replacing a worn-out heater or car at home.

The costs will be incurred over 25 years or more and spread across many millions of electricity users. For Australian households and businesses to have access to the equipment and capital required, investors and suppliers need confidence about the direction the system is heading. They don’t need every policy detail to stay the same for the next 25 years. But they do need certainty that the overall policy goal will be consistent.

It’s this certainty that has been taken away by the Coalition’s decision to turn net zero into a culture-war signal. Other countries are already leaning into these benefits, recognising the chance that comes with dominating the future. About 48 per cent of cars sold in China in 2024 were electric, in the UK it’s 28 per cent, in Norway, 92 per cent. Countries are racing to install more renewable electricity, recognising the economic and geostrategic benefits.

If Australia turns its back on the future, we will be stuck with an old, unreliable, expensive electricity system, and prices are likely to be higher for longer. Households will find it harder to upgrade to an all-electric home, and miss out on the savings that result. At the same time, we’ll all continue to pay the many prices of delaying action to reduce climate change.

Dropping a commitment to net zero does not change the physics of climate change. It leaves us without a compass to guide our efforts to minimise the effects, and reduce the costs.

Alison Reeve is the climate change and energy deputy program director at Grattan Institute.

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