Decarbonisation pathways

There are different ways we can reach NSW’s emissions reduction targets.

Pathways are established tools used in Australia and internationally (including the United Kingdom and New Zealand) that model different routes to net zero across the whole economy. They allow us to compare the impacts, opportunities and challenges the state might face depending on the different choices the government, businesses and community make.

The illustrative example below shows a single possible pathway. You can see how every sector has a share of the total emissions path to net zero and its own timeline and targets. The pathway helps us understand how different sectors are interconnected and how they can work together to achieve net zero across the whole economy.  

The pathways will complement NSW’s existing legislated targets and offer guidance to strengthen the state’s ability to plan, invest, and manage risk. 

Pathways are useful because they: 

Help NSW plan an orderly, just and economically beneficial transition to net zero with an evidence-based role for each sector.

They provide practical guidance on options for sector-level actions and timelines that can support policy, infrastructure and investment decisions. Illustrating trade-offs and the impacts of different choices, pathways can assist the implementation of effective support on the ground for communities and businesses. 

Strengthen existing point-in-time economy-wide targets with sector-based targets and identify interactions between sectors.

Pathways provide clarity on options for how each sector can decarbonise to support the whole of the economy to meet legislated targets.

Not all sectors will decarbonise at the same pace. Pathways help identify how sectors interact with each other and ways to ensure decarbonisation across sectors is coordinated.

Pathways also provide support for evidence-based setting of future legislated targets.  

For example: The decarbonisation of some industries may require new technology development, which takes time. In addition, the electrification of vehicles and equipment will require the electricity grid to expand and decarbonise.  

Inform government policies, programs and regulation with strong evidence. 

Pathways highlight gaps in government policy and identify areas where intervention could drive greater emissions reduction. 

Pathways are also underpinned by strong, data-driven evidence, which increases accuracy and builds trust in the results.

For example: Currently NSW is not on track to meet its legislated targets. Pathways provide government with evidence and options for how greater intervention across sectors could help ensure the targets are met.  

Provide long-term direction and increasing confidence for investors, industries and communities.

Pathways will identify business growth and investment opportunities and risks, helping to illustrate the impacts of different choices.

For example: The NSW Electricity Infrastructure Roadmap shows that a clear pathway, strong policy signals, enabling legislation, targeted financing and a place-based approach can accelerate investment and implementation.  

Enable clear monitoring of progress and early identification of risks or gaps.

For each sector, emissions will be quantified and assessed to see how NSW is tracking towards the balanced pathway.

Pathways enable us to understand if policies are effective or whether there are deviations, risks or gaps.

For example: By comparing the number of electric vehicles currently on the roads to what the pathway tells us we need to achieve our target, we can become clearer on progress within that specific sector and where support is required. 

The pathways will be grounded in expert modelling, detailed stakeholder engagement, and transparent assumptions, drawing on science, economics and social insight. As an independent body, the Commission is well placed to bring that evidence together into practical, credible pathways.

The high-level steps for pathways development are:

• Establish a baseline as a reference point for the decarbonisation pathways
• Consult with stakeholders including experts, businesses and communities to ensure the pathways are grounded in lived experience and broad evidence
• Determine the inputs and assumptions based on technologies, costs, behavioural factors and constraints
• Model multiple pathways to explore different trade-offs and costs
• Complete an independent peer review to ensure the rigour of the pathways 
• Publish the pathways as an evidence-based resource for government, industry and community for their net zero transition
• Utilise pathways in ongoing monitoring and advice to government.

Pathways demonstrate the role of all sectors in reaching our targets at a whole-of-economy level. The Commission uses eight sectors with subsectors that map at a high-level to the IPCC sectors: Electricity and energy, transport, industry, resources, agriculture, land, built environment and waste. Carbon management such as carbon removals in land and aquatic systems, direct air capture and carbon capture and storage or use are also considered.