The report advises the Minister for Climate Change and Energy on how Australia can progress toward a prosperous and resilient net zero economy. The report informs development of the Minister’s fourth Annual Climate Change Statement to Parliament. It calls for faster emissions reductions and stronger adaptation measures to keep Australia on track for a safe and resilient future. A policy focus is provided on the Capacity Investment Scheme and the Safeguard Mechanism.

Key findings

• Australia has just seen its hottest ever year, with mean temperatures during the 12 months to June 2025 exceeding the previous record by more than 0.25 ºC.
• The pace of emission cuts must double to meet the legislated 2030 target of reducing 2005-level carbon pollution by 43%.
• To reach Australia’s newly set 2035 goal – a 62–70% reduction – the rate of cuts will need to triple by the early 2030s.
• Electricity and energy sectors made the fastest gains, improving the prospects for other sectors of the economy to decarbonise as they electrify.

It makes seven recommendations for priority action:

1. streamlining approvals for renewable energy projects
2. extending the Capacity Investment Scheme to maintain momentum
3. installing technologies that keep the electricity grid secure as fossil fuel generators retire
4. ensuring regional communities share in the benefits of clean energy projects
5. taking a deep look at opportunities to radically reduce fossil methane emissions
6. making sure Australians are not locked into living and working in places exposed to dangerous climate risks
7. partnering with investors to help communities and businesses build resilience.