Coal-Fired Power Plant
Steam and other emissions rise from a coal-fired power station near Lithgow, 120 km (75 miles) west of Sydney, July 7, 2011. Reuters/Daniel Munoz

An economic modelling commissioned by Australia’s Climate Institute pushed for the closure of the country’s coal-powered plants to meet the less than 1.5 degrees increase in global warming under the Paris Climate Change agreement. To reach that target, Australia must source 90 percent of its electricity for renewable energy.

The shuttering of the coal-fired plants is needed because relying solely on an emissions trading scheme would not be sufficient, unless the carbon price is high which could not be politically accepted by industries, says the modelling made by Jacobs, energy market consultants, released on Friday. However, closing over 80 percent of existing coal power generation within five years after 2030 would cause significant social and economic disruption in some communities, such as the Latrobe Valley, reports The Sydney Morning Herald.

Jacobs says that a carbon trading scheme with more modest price of $40 per tonne could only meet the country’s immediate target of reducing emissions by 26 to 28 percent by 2030. It would also translate into a 60 percent reduction in clean energy growth from 2020, reports 9News.

However, phasing out of coal facilities and heavier reliance on clean sources would provide Australia with the best chance to cut emissions effectively to zero by 2050, points out the institute. If it would rely on carbon price alone, it must be $70 by 2020 and increased to $100 by 2030.

The federal Coalition government is against carbon pricing and had repealed the carbon law passed during the term of former Prime Minister Julia Guillard. The phase out of coal and more reliance on cleaner energy would cost the government $50 billion more during the 30 years compared to relying on an emissions trading scheme only.