New South Wales has legislated ambitious climate targets to reach net zero by 2050, with interim goals to cut emissions by 50 per cent by 2030 and 70 per cent by 2035. However, based on current policy settings, New South Wales is projected to miss all of these targets—2030, 2035, and 2050.
Achieving net zero is not just a climate goal—it’s essential for New South Wales’ long-term productivity and quality of life. Delays will only increase future costs, making immediate action vital to secure an affordable and effective transition.
Key findings from paper 1:
Ensuring a cost-effective transition
The first paper in our Achieving net zero research series explores the essential policy directions to help New South Wales reach its targets while protecting productivity and living standards:
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Decarbonising electricity as a foundation for all sectors: Rapidly decarbonising electricity is essential to meet emissions targets for the electricity sector itself and to reduce emissions in transport, manufacturing, and buildings. This transition must happen alongside actions in other sectors, with coordinated investments in renewables, firming capacity, and grid infrastructure as all four remaining NSW coal generators close by 2040.
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Smart technology to manage costs: Reforms like cost-reflective pricing and accelerated smart meter rollouts can reduce peak demand and contain system costs, delivering direct bill savings to households and businesses.
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Clear policy principles for a cost-effective path to net zero: With no economy-wide carbon price in place, the transition will require policies that maximise cost-effectiveness, create certainty for investors, remain technology-neutral, and ensure coordination across jurisdictions to avoid overlap and inefficiency.
We know we face challenges in this transition. Achieving net zero will require a skilled workforce and capital investment, but New South Wales’ construction sector is already stretched by demands from infrastructure and housing. Addressing these constraints is vital to meeting emissions targets in the most efficient way possible.
About the research series
The Achieving net zero series is a three-part initiative by the NSW Productivity and Equality Commission to guide policymakers, businesses, and households in progressively decarbonising the state’s economy.
Each paper will outline critical areas where coordinated policy can maximise productivity and cost-efficiency, navigating the path to net zero in the absence of an economy-wide carbon price.
This first paper sets the foundation. Future papers will cover emissions reductions in buildings, industry, waste, agriculture, and transport, helping guide NSW’s journey to a cost-effective, sustainable future.