So far, Australia’s strategies to reduce its transport emissions have focussed on increasing the uptake of electric vehicles (EVs).

But with transport being Australia’s fastest-growing source of emissions, Climateworks Centre’s latest transport scenario modelling shows it is necessary to use all available solutions to decarbonise the sector. 

In addition to zero-emission vehicles, these solutions include: 

• increasing the use of public transport, active transport and rail freight (A.K.A ‘mode shift’)
• reducing some travel activity where there are opportunities to move people and goods more efficiently.

Delivering on this ‘diverse solutions’ approach requires a shift in how governments at all levels plan and fund transport – putting emissions reductions at the heart of all decisions. 

With the Australian Government developing its Transport and Infrastructure Net Zero Roadmap, it has the opportunity to get the settings right, enabling the lowest-emissions options across the transport sector.

Here are Climateworks’ recommended ways to align existing decision-making and funding mechanisms to ensure the lowest-emissions options get priority. 

1. Make emissions central to transport decisions 

Putting emissions reduction at the heart of funding decisions requires considering ways to reduce all transport emissions. 

This means making decisions that avoid and reduce emissions created by end users, operational emissions, and embodied emissions from transport infrastructure construction.  

A recent report from Infrastructure Australia calculates that embodied carbon from building activity contributed 10 per cent of national carbon emissions in 2023. 

2. Adequately value and assess emissions 

There have been recent updates to the value of carbon for infrastructure project assessments.

This value could continue to increase over time, and its application could expand to a wider scope of project sizes, costs and jurisdictions. 

An assessment tool to measure the emissions implications of planned transport investments and policies would also enable a comprehensive, net zero-aligned reform of funding and planning. 

This could enable prioritisation across different investment types to drive down emissions, such as prioritising improved bus services over new road infrastructure.

3. Build less 

A ‘low build’ approach, recommended in recent reports from the Victorian and New South Wales governments, encourages governments to use existing infrastructure better by shifting some travel to lower-emissions modes of transport and reducing some avoidable trips.

This approach will improve transport efficiency and reduce the costs and embodied emissions from infrastructure.

4. Prioritise projects that align with broader transport goals

This includes the sustainable transport goals outlined in the National Urban Policy and other relevant state-based land use plans. 

Prioritising projects that align with these goals reduces emissions by promoting sustainable transport options.

It also ensures decarbonisation investment creates win-wins for emissions reduction and broader transport outcomes – including productivity, liveability, reduced congestion and increased housing affordability.

5. Require future transport projects to incorporate walking, cycling, public transport links and connectivity

Future projects could be required to include additional emissions reduction, including opportunities to integrate walking, cycling, rail freight and charging infrastructure.

Committed projects can also be retrofitted to include these requirements. 

Existing project pipelines could be reviewed for emissions impact.

Projects with high lifecycle emissions could be reevaluated, for example, to consider whether they encourage lower-emissions transport modes. 

6. Implement carefully designed road-use pricing 

As Australians transition from fuel-powered to electric vehicles, road-use pricing will be needed to replace the existing fuel excise tax. 

If designed effectively, a pricing scheme can also help reduce emissions by curbing congestion and avoiding emissions related to infrastructure that would otherwise be needed to address that congestion. 

EVs are inexpensive to drive, which means people who own them might drive more – leading to an increase in congestion above what would be expected from fuel-powered vehicles. 

Learning from the scheme implemented in London, the funds generated from managing urban congestion could support low-emissions transport alternatives, like public transport, to help lower emissions and congestion even further.

7. Expand government collaboration and set clear roles for each level of government

This starts with ensuring that different levels of government work together on solutions that can drive down transport emissions, including through forums such as the Infrastructure and Transport Ministers Meeting.

The forum’s focus could be expanded to include reforming transport decision-making processes, shifting to public transport and freight on rail, and improving transport efficiency, including through pricing. 

It is also important that state, territory and federal governments have clear roles in achieving transport decarbonisation.

8. Consider the governance, research and development needed for transport’s major transition ahead 

A well-planned transition will give government, industry and individuals more confidence in making decisions. 

A transition supported by clear research and fit-for-purpose agencies will be critical to giving businesses confidence in planning future investments.

Getting the settings right now can safeguard future emissions reductions 

Getting the settings right means implementing regulations that remove barriers and incentivise solutions to reduce emissions. 

This includes ramping up the uptake of EVs, pursuing uptake of zero-emissions trucks, and shifting to sustainable transport modes.

Across all these areas, an approach for monitoring and reporting the impact on transport emissions will be needed, including a national strategy to have fit-for-purpose transport data to support government and private sector emissions tracking and reporting. 

The short-term priority is getting the settings right so that each transport planning and funding decision drives emissions reductions over the coming decades. 

By doing so, Australia can develop an approach for a smooth, lowest-cost transition with more options to reduce emissions in line with the Paris Agreement goals.

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