Australia has pledged to reduce emissions by 5% below 2000 base level emissions by 2020 under Copenhagen. In addition to this 2020 pledge, Australia has a commitment under the Kyoto Protocol’s second commitment period (2013-2020) to limit average yearly emissions to 99.5% of 1990 base levels. We rated these targets Inadequate. Taking into account LULUCF accounting rules for the second commitment period and special provisions of the Kyoto Protocol that apply to Australia, the CAT assesses that emissions in Australia could increase much above those inadequate target levels.
In 2014, the Australian Government repealed core elements of Clean Energy Future Plan. Up until the time of repeal, the implemented climate policy was effective and was projected to have been sufficient to meet Australia’s unconditional Copenhagen pledge (CAT, 2013) for a 5% reduction from 2000 levels by 2020. Our post-repeal assessment shows, however, that this target is no longer in reach and the currently proposed new legislation will result in emissions increasing by 12-18% above 2000 emissions levels, rather than the 5% reduction pledged.
Kyoto Protocol Second Commitment Period Target
As Australia has both a pledge for a 5% reduction from 2000 based levels by 2020, and a Kyoto target for the second commitment period (2013 to 2020), it is essential to review both in order to quantify the country’s likely future emissions allowances in 2020.
Should Australia ratify the Doha Amendment to the Kyoto protocol, it is this target that would be legally binding and not the pledge for 2020, which is non-binding. This analysis therefore gives priority to the Kyoto protocol target, where a conflict occurs between the outcome of the Copenhagen pledge and the Kyoto system.
For the second commitment period of the Kyoto Protocol, Australia nominated a provisional Quantified Emission Limitation or Reduction Commitment (QELRC) level of 99.5 over the period 2013-2020. This represents an average yearly emissions level of 99.5% of 1990 base levels. However, this does not give any real indication, unlike most other countries, of the real increase or decrease of emissions. Under the first commitment period, the QELRO for Australia was 8% above 1990 base emission levels over the period 2008-2012.
To quantify the likely outcome of this target in terms of emissions of industrial greenhouse gases, excluding land use, land use change and forestry, it is important to step through the key elements of the Kyoto architecture and quantify these. In Australia’s case, these can lead to a very substantial increase in emissions allowances (further details in our 2014 Australia country page). The different elements quantified here are:
We estimate that all these accounting rules would allow Australia’s 2020 Annex A emissions to be 610 MtCO2e in 2020, which is 47% above 1990 levels of industrial GHG emissions. If Australia elects additional LULUCF activities (cropland management and grazing land management) for accounting during CP2, we estimate their allowed emissions in 2020 would be raised to 657 MtCO2e, which is 59% above 1990. Further clarity from the Australian Government regarding base year emissions and projections data for newly elected activities is needed to better constrain the likely available credits and debits from LULUCF activities during the second commitment period.
We evaluate our analysis of potential credits from LULUCF accounting as being at the upper end of the possible range. The CCA analysis (CCA, 2014) instead provides a lower bound, and using their analysis for LULUCF accounting would result in allowed 2020 emissions that are 28% above 1990 (for further detail, refer to figure 4 our 2014 Australia country page)
Australia’s 5% reduction below 2000 by 2020 pledge
Australia’s Copenhagen pledge is to reduce emissions by 5% below 2000 emissions by 2020. The Australian government has stated: “in defining its targets for 2020, Australia considered that these targets refer to its net emissions from the sector and source categories included in Annex A to the Kyoto Protocol as well as from afforestation, reforestation and deforestation activities, for the base year (2000) and 2020” (UNFCCC, 2014 and DCCEE, 2012).Based on projections of emissions from the ARD sector (UNFCCC, 2014), we calculate that the Annex A emissions resulting from this 5% reduction target would be 524 MtCO2e or 26% above 1990 levels. Projections of deforestation emissions by the Climate Change Authority (CCA, 2014) and the Australian Government are higher than those in the independent CAT assessment. If net ARD emissions in 2020 were higher, Annex A emissions would need to be lower in order for Australia to still meet the 5% target. Using CCA projections of ARD emissions, Annex A emissions in 2020 would need to be limited to 498 MtCO2e, or 20% above 1990 levels.
For 2020, Australia has proposed three targets with different conditions, -5%, -15%, and -25% relative to 2000. Australia has provided absolute allowed emission levels in 2020 of 524 MtCO2e, 468 MtCO2e, and 413 MtCO2e for the -5%, -15% and -25% targets respectively (these figures assume 5 MtCO2e from ARD in 2020).
 The QELRC, expressed as a percentage in relation to base year emissions, denotes the average level of emissions that an Annex B Party could emit on an annual basis during a given commitment period
We rate Australia’s targets for 2020 “Inadequate”. The conditional target of 25% emissions reduction below 1990 would be rated “Medium”, but only if no LULUCF credits were used. The current Kyoto target and Copenhagen pledge are above all effort-sharing proposals evaluated by the CAT. For Australia, proposals based on capability lead to higher emissions allowances whereas approaches that focus on equal cumulative/equal per capita emission would require more stringent reductions.
Current policy projections are expected to lead to an emissions level of 597-623 MtCO2e excluding LULUCF by 2020 and around 720 MtCO2e by 2030, that is 49 to 57% above 1990 levels of industrial GHGs by 2020. This is in line with effective emissions allowances, after all accounting rules (up to 59% above 1990 levels). In other words, Australia may not need to do anything to meet its Kyoto obligations, a situation that also prevailed for the first commitment period (2008 to 2012).
The new Australian Government repealed most of the core instruments of the national climate policy and legislation included in the previous Government’s Clean Energy Future package, such as the Carbon Pricing Mechanism (through the passing into law of a package of 8 bills amongst which was the “Clean Energy Legislation (Carbon Tax Repeal) Act 2014”) have been repealed. The Government has now employed the Direct Action Plan (enabled by the Amendment of the Carbon Farming Initiative Amendment Act 2014). to reduce Australia’s emissions to meet the 5% below 2020 goal. At the heart of that plan is the Emissions Reduction Fund (ERF), which will function as a reverse auction mechanism with the goal of buying back the lowest-cost abatement.
Current policy projections are expected to lead to an emissions level of around 597-623 MtCO2e excluding LULUCF by 2020 (50% above 1990 emissions excluding LULUCF) and around 720 MtCO2e (73% above 1990 emissions excluding LULUCF) by 2030. Emissions excluding LULUCF have seen a significant increase since 1990. Land use plays an important part in Australia's total emissions profile. LULUCF emissions have fluctuated widely since 1990. For example, from 2010 to 2011, they moved from being a source of emissions by 29 MtCO2e to being a sink with -60 MtCO2e. The annual fluctuations are primarily from changes in emissions and sinks from forest management activities.
The Australian current policy projections is based on a scenario that excludes the carbon price but includes existing policies such as the Renewable Energy Target, energy efficiency standards and land clearing controls (CCA, 2014). According to our assessment, Australia’s remaining cumulative abatement challenge is of 507 MtCO2e until 2020, which is comparable to one year of Australian emissions in the early 90’s.
This scenario does not include abatement from the Emissions Reduction Fund (ERF). An independent assessment forecasts that, as currently designed, the ERF will purchase around 67 MtCO2e of greenhouse gas cumulative abatement by 2020 (Reputex, 2014). To our base scenario, we added the potential abatement from the ERF until 2020 and present that as the alternative ‘Current Policy projections – incl. ERF’ scenario. Such a scenario would still leave a shortfall of around 440 MtCO2e against Australia’s remaining abatement challenge of 507 MtCO2e.
Australia's previous climate policy and its supporting legislation has proven successful in reducing GHG emissions. Due to a well-functioning combination of policy instruments, the carbon intensity of the Australian economy has halved since 1990, and deforestation emissions were significantly reduced. O’Gorman & Jotzo (2014) conclude that the carbon price has worked as expected in terms of its short-term impacts. Independent analysis has also shown that in the 100 days after the repeal of the carbon tax, the electricity sector saw significant growth in emissions, and those might grow by a few more million tonnes and exceed 10% over the year (The Conversation, 2014).
It is clear from our present assessment that Australia is unlikely to meet its target. The substantial turnaround in Australian climate policy implies a clear shift away from a targeted national climate policy designed to meet concrete goals in line with international climate policy targets, and the required emission reductions identified by the climate science community. Under the new Government, Australia’s position on climate finance was reversed, but that changed on 9 December when the Government announced a $200m contribution to the GCF over four years, taken directly from the aid budget (PM, 2014).
We calculated targets for 2020 from the most recent national inventory submissions (CRF 2014).
We have applied LULUCF accounting to Australia’s pledge and Kyoto target, following special criteria in line with the definition of their pledges. As of COP 17 in Durban, it has been decided that forest management is a mandatory activity under article 3.4 and shall be accounted by all Annex I parties. We have therefore interpreted Australia’s pledge as a target including ARD and forest management. We calculated LULUCF accounting quantities for forest management using a net-net approach with a projected reference level for 2013-2020. While Australia provided a range of possible outcomes on the force majeure (natural disturbances) provision, our reference level is without this provision and would change if this provision were included. For further details on the calculation of Australia’s Accounting Credits and Debits from Kyoto Protocol Article 3.3 and Article 3.4 LULUCF activities – please refer to 2014 Australia country page.
To keep consistency with the first commitment period, for post 2012 we assumed Australia will continue to use Article 3.7, which allows deforestation emissions to be included in the base year for those parties with a net source of emissions from the land use change and forestry sector and applies to the target in the first KP commitment period. Some parties have proposed amending Article 3.7 to remove this provision. Australia wishes to retain it. For calculation of Australia’s surplus from the first Kyoto commitment period (CP 1), please refer to 2014 Australia country page.
Current policy projections
For the current trend analysis we used scenarios from the Australian Climate Change Authority (2014). Alternative scenarios presented here use forecasts from Reputex, 2014 for potential abatement from ERF and RET.
Climate Action Tracker (2013).  Australia: Backtracking on promising progress. Climate Action Tracker Policy Brief, 12 November 2013
Climate Change Authority (2014). Reducing Australia’s Greenhouse Gas Emissions – Targets and Progress Review. Final Report. October 2013
CRF (2013). UNFCCC AWG-KP Submissions 2013. Common Reporting Format.
Government of Australia (2013a). Australia’s 6th National Communication on Climate Change
Government of Australia (2013b) . Repeal of the Carbon Tax: Exposure Draft Legislation and Consultation Paper
Government of Australia (2012a). Department of Climate Change and Energy Efficiency, 2012Fact sheet: Australia’s emissions reduction targets
Government of Australia (2012b). Information by parties included in Annex I listed in annex 1 to decision 1/CMP.7 on their quantified emission limitation or reduction objectives for the second commitment period under the Kyoto Protocol
Government of Australia (2010a). Australia's pledge to the Copenhagen Accord. Compiled in: Compilation of economy-wide emission reduction targets to be implemented by Parties included in Annex I to the Convention, UNFCCC (2011).
Government of Australia (2010b). Australia to 2050: Future Challenges
Government of Australia (2010c). Australia’s Projections 2010 (includes a quantification of the target)
Government of Australia (2009a). Submission by Australia (2009) Strengthening Australia's National Ambition for 2020 Submission to the AWG-LCA and AWG-KP May 2009
Government of Australia (2009b). Text to be included in the Draft conclusions proposed by the Chair. (FCCC/KP/AWG/2009/L.3): Views on options and proposals for addressing definitions, modalities, rules and guidelines for the treatment of land use, land-use change and forestry (LULUCF). 24 April 2009, FCCC/KP/AWG/2009/MISC.11
Reputex Carbon (2014). Re-thinking Direct Action. August 2014.
O’Gormon and Jotzo (2014). Impact of the carbon price on Australia’s electricity demand, supply and emissions. July 2014.
Prime Minister of Australia (2014). Assisting the global response to climate change.
The Climate Institute (2013). A Review of Subsidy and Carbon Price Approaches to Emission Reduction
The conversation (2014.). A record growth in electricity sector emissions. November 2014
UNFCCC (2014): Quantified economy-wide emission reduction targets by developed country Parties to the Convention: assumptions, conditions, commonalities and differences in approaches and comparison of the level of emission reduction efforts. UNFCCC Technical paper, 18 November 2014
See also references for the Climate Action Tracker Australia report: see full list