What matters most to Australia’s leading economists about the future of Australia’s energy system isn’t price and it isn’t reliability – it is cutting Australia’s emissions to net-zero by 2050.

The preferred mechanism of the 40 top economists surveyed is a carbon price, and their least-preferred means of generation is nuclear.

Asked to pick the most important of three goals for the energy system of the future in the latest Economic Society of Australia poll, 18 of the 40 picked getting to net-zero, 16 picked ensuring the power system was reliable, and only five picked minimising cost.

The 40 economists who took part are members of a panel of about 70 maintained by the Economic Society of Australia, among them experts in public finance, macroeconomics and economic modelling.

Several said they didn’t think the goals of net-zero, reliability and price conflicted.

Frank Jotzo, professor of environmental and climate change economics at the Australian National University, said it was “crystal clear” that if electricity was to be affordable and secure, it would have to be created by the sun and the wind with backup from storage and a small amount of gas.

Renewables (with storage) already supplied 40 per cent of the National Electricity Market.

Asked to nominate the second most important of the three goals, 13 of the 40 economists picked achieving net-zero, 17 nominated reliability, and only nine nominated minimising cost.

All up, 79 per cent of those surveyed picked achieving net zero as one of the two most important goals, and only 36 per cent picked minimising cost.

Economist Melinda Cilento, chief executive of the Committee for the Economic Development of Australia, said Australia would need to get close to nailing all three – meeting two but being wildly off the third would not be sustainable.

Public policy specialist Rana Roy said what was important was minimising the total “social cost” of providing electricity, not merely the financial component of the social cost.

That cost included the social cost of carbon emissions and the negative impacts of generation and transmission on air, soil, water and biodiversity.

Barely a role for coal, less for nuclear

Asked about the optimal power mix in 2040, the panel saw a much-reduced role for coal, supplying less than 8 per cent of Australia’s power, down from 46 per cent at present.

Renewables would supply 69 per cent of Australia’s power by 2040 (up from 33 per cent) and gas 14 per cent (down from 17 per cent).

Coal would generate only 7 per cent of Australia’s power, down from 46 per cent.

On average, the panel expected nuclear power to supply 5 per cent, but the average hides sharp divisions. Only eight of the 40 saw any role for nuclear. The rest saw none.

Economist Saul Eslake said while he had no ideological objection to nuclear power, he was unpersuaded that it would end up being cheaper than a predominantly renewables-based system, even allowing for the cost of building new transmission lines.

He was concerned about the prospect of the very large federal electricity commission he said would be required to build and run the reactors.

“It is relevant to me that the private sector is willing to invest in renewable energy generation infrastructure and the associated required transmission infrastructure, albeit with tax breaks and subsidies, but there is no commensurate willingness on the part of private investors to invest in nuclear generation,” he said.

Lowy Institute economist Jenny Gordon said Australia lacked the expertise to develop nuclear power and had not yet worked out how to properly deal with nuclear waste, even from the existing Lucas Heights reactor.

Overseas experience suggested nuclear power stations took 20 years to come on line once construction had started.

Environmental economist Leslie Martin from the University of Melbourne said while nuclear generation might have a role eventually, it would take a long while to build a consensus about the benefits, and in the meantime the cost of battery storage was likely to fall further, making nuclear less economic.

Among those who did see a role for nuclear was former OECD official Adrian Blundell-Wignall who said that, having lived in France, he could see none of the negatives Australian critics focused on.

Also seeing a case for considering nuclear was University of NSW economist Gigi Foster. She said renewables had no chance of replacing fossil fuels and that Australia should concentrate on using its abundant reserves of gas alongside coal for base-load power.

Price carbon, close coal plants

Invited to pick up to three tools the government could use to get to the optimal power mix by 2040 from a list of six, 57 per cent picked an economy-wide carbon price, and 40 per cent picked extending the existing carbon price embedded in the so-called “safeguard mechanism” applying to heavy industry.

Some 50 per cent opted for firm commitments not to extend the life of existing coal-fired power plants.

While only 22 per cent backed direct government funding of the preferred forms of generation and transmission, 40 per cent backed investment subsidies.

A supporter of direct government subsidies, University of Melbourne industrial economist David Byrne, said that while direct subsidies were often a bad idea, in the case of the energy market, so-called ‘network effects’ gave the government a big bang for its buck.

The more electrical vehicle charging stations and community batteries there were, the more Australians would feel confident about driving electric vehicles and installing solar panels.

Rana Roy argued that Australia’s existing solar feed-in tariffs were a particularly expensive way of reducing emissions and were also financially regressive, benefiting affluent homeowners at the expense of poorer owners and renters.

Macquarie University innovation specialist Lisa Magnani said that whatever set of mechanisms the government chose to bring about net-zero by 2050, the most important thing was that they should be consistent.

Changes could undo years of effort. Australia’s success in the transition to date gave what it did an international significance.

Detailed responses from each of the 40 economists are available here.