Under present policy settings, Australia’s emissions are set to substantially increase to more than 21% above 2005 levels by 2030, equivalent to an increase of around 52% above 1990 levels. The latest economic and greenhouse gas emissions data analysed by the Climate Action Tracker (CAT) confirms earlier assessments by the CAT and many other analysts that Australia’s current policies will fall well short of meeting its proposed Paris Agreement target of an emissions reduction of (including LULUCF) 26–28% below 2005 levels by 2030. The Emissions Reduction Fund (ERF)—the so-called “centrepiece” of the Australian Government’s policy suite to reduce emissions—does not set Australia on a path that would meet its targets. Without accelerating climate action and additional policies, Australia will miss its 2030 target by a large margin, a conclusion supported by other analysts
Of particular concern is the reversal of a declining trend in CO2 emissions from coal-fired power stations following the removal of the carbon pricing system, with its nascent transition towards an emissions trading scheme, and related legislation, affecting the sector in the middle of 2014. As a consequence, emissions from electricity production, which had been covered by the scheme, are rising again while the Federal Government continues to create political uncertainty on the future of renewable energy. The Federal Government has questioned the efficacy of renewable energy and called for one state (South Australia) that had recently closed its last coal-fired power station to reopen it.To meet its inadequate 2030 emissions targets, Australian emissions need to decrease by an average annual rate of 1.9% per cent until 2030; instead, with current policies, they are set to increase by an average rate of around 1.2% a year, dramatically illustrating the dichotomy between climate rhetoric and climate action.
Australia ratified the Paris Agreement on 6 November 2016. Its Nationally Determined Contribution (NDC), includes a target of reducing GHG emissions, including land use, land use change and forestry (LULUCF), by 26–28% below 2005 levels by 2030. After accounting for LULUCF, this target is equivalent to a range of around 5% below to 5% above 1990 levels of GHG emissions excluding LULUCF in the year 2030. We rate this target “inadequate”.
For our detailed analysis from 2015, click here.
The 2030 NDC target is rated “inadequate” as it is not in line with most interpretations of a “fair” approach to reach a 2°C warming limit, let alone with the Paris Agreement’s stronger 1.5°C limit: if most other countries were to follow the Australian approach, global warming would exceed 3–4°C. This inadequacy was also recognised by the Australian Climate Change Authority ahead of the adoption of the Paris Agreement in December 2015. Under the CAT projections, Australia's national emissions are projected to continue to increase through 2030 at least, with no reduction in sight under the current policy settings.
As of September 2016, there is little indication that the Australian Government intends to review whether it can meet its current target, and/or whether the present target needs to be increased with a consequent upgrading of policy (Parkinson, 2016), as governments are expected to do by 2020, after the 2018 review.
Paris Agreement targets
Australia ratified the Paris Agreement on 6 November 2016. In its NDC, Australia announced a 26–28% reduction of greenhouse gas emissions by 2030 below 2005 levels, including LULUCF. This translates into a range of 445–458 MtCO2e allowed emissions levels in 2030 incl. LULUCF (equivalent to a reduction of 13–15% below 1990 emissions levels incl. LULUCF). Analysis of the effect of the NDC on likely fossil fuel and industrial GHG emissions is made difficult by the fact that the NDC target includes LULUCF emissions, which are substantial and fluctuate significantly (Figure 2 under “Data Sources and assumptions” in our Australia report). We have estimated levels of emissions excl. LULUCF resulting from the NDC by subtracting projected emissions for the LULUCF sector in 2030 from the targeted level incl. LULUCF. We estimate that the NDC translates into emissions levels of 395–437 MtCO2e excl. LULUCF, equivalent to around 1% below to 9% above 1990 emissions levels excl. LULUCF.
An important aspect of the Australian NDC is that the 2030 target remains provisional on the “rules and other underpinning arrangements of the agreement” and that Australia reserves the right to adjust it. This adds high uncertainty to Australia’s contribution to the 2015 Paris Agreement. The conclusions of the present CAT assessment are subject to the same uncertainty and will need to be revised if Australia makes any adjustments to its target and proposed LULUCF accounting approaches.
2020 pledge and Kyoto target
Kyoto Protocol First Commitment Period Target (2008–2012)
Australia’s Kyoto Protocol target for the first commitment period (CP1) (2008–2012) was to limit the increase in its GHG emissions excl. LULUCF to 8% above to 1990 levels (QELRO of 108% of base year emissions).
Under the Kyoto Protocol accounting rules (notably Kyoto Protocol Article 3.7), Australia was allowed to add deforestation emissions to its base year for calculating its commitment period emissions allowances. This led to an increase in Australia’s allowances of around 30% per year of the commitment period. Other LULUCF accounting rules applicable to Australia in the first commitment period (Article 3.3) provided debits, which were subtracted from the allowed GHG emissions excl. LULUCF during the commitment period.
Overall, Article 3.7 and the other LULUCF provisions of the Kyoto Protocol resulted in emission allowances exceeding actual emissions by around 100 MtCO2e, despite minimal policy action for that period. Australia ended CP1 with a surplus emissions allowance of around 100MtCO2e to be transferred to the second commitment period, principally as a consequence of Article 3.7 (which is often called the Australia clause, and without having to take any action to reduce emissions.
Kyoto Protocol Second Commitment Period Target (2013-2020)
Australia has a target under the Kyoto Protocol’s second commitment period (2013–2020) to limit average yearly emissions to 99.5% of 1990 base levels (a 0.5% reduction). However, after taking into account:
Australia’s allowed GHG emissions (excluding LULUCF) could be increased in 2020 to 23–48% above 1990 levels of GHG emissions excluding LULUCF (further details on this analysis in our Australia report)
Copenhagen 2020 Pledge
Under the Copenhagen Accord Australia proposed three targets for 2020 with different conditions, -5%, 15%, and 25% below 2000 levels. The 5% below 2000 levels goal currently stands as Australia’s unconditional pledge. In its Copenhagen Accord Australia pledges “to reduce its greenhouse gas emissions by 25% on 2000 levels by 2020 if the world agrees to an ambitious global deal capable of stabilising levels of greenhouse gases in the atmosphere at 450 ppm CO2–eq or lower”—with the Paris Agreement long term temperature goal this condition has been met.
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). The CAT estimates Australia’s unconditional Copenhagen pledge to reduce emissions by 5% below 2000 emissions by 2020 is equivalent to an approximately 9% increase above 2000 levels excl. LULUCF (or to a 27% increase above 1990 levels of GHG emissions excluding LULUCFafter taking into account Australia’s inclusion of afforestation, reforestation and deforestation (ARD) emissions in year 2000 base level emissions and in the 2020 target year.
Since the Copenhagen pledge is not legally binding, there are no pre-existing rules as to which rules apply to this pledge. Some countries, such New Zealand, indicate that they would use the Kyoto Protocol rules to increase their allowed GHG emissions as illustrated above. If we apply this approach to the Copenhagen pledge, Australia could increase its GHG emissions (excl. LULUCF) by up to 22% above 2000 levels (equivalent to 45% increase above 1990 levels) and still officially meet its 5% reduction target.
With „industrial GHG emissions” we mean here GHG emissions from the energy, industrial processes, solvent and other product use, agriculture and waste sectors, excluding land sector and forestry.
The review of the initial report of Australia for it second commitment period under Kyoto would permit more accurate quantification in the event of any adjustments to its reported deforestation or other emissions in the base year, as occurred in the case of the IRR for the first Kyoto commitment period (http://unfccc.int/resource/docs/2009/irr/aus.pdf)
In comparison with the Kyoto Protocol target, the Copenhagen pledge not only puts forward a different target and base year (2000 vs 1990) but also a different way to calculate base year emissions, as it includes emissions from afforestation, deforestation and reforestation instead of only deforestation as it is done under the Kyoto Protocol.
CRF 2014 data.
For this calculation, we did not use Party-provided ARD projections, instead obtaining the 2020 ARD value by linear trend over the period 1990-2010 for afforestation and reforestation and a linear trend over the period 1990-2012 for deforestation (see Assumptions).
We rate Australia’s NDC target for 2030 “inadequate.” The “inadequate” rating indicates that Australia’s commitment exceeds the acceptable emissions level for Australia in all effort-sharing proposals evaluated by the CAT. This means it is not consistent with limiting warming to below 2°C, let alone with the Paris Agreement’s stronger 1.5°C limit: if most other countries followed the Australiaapproach, global warming would exceed 3–4°C. 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. The 2020 Kyoto targets are also rated “inadequate.”
Australia’s current policies fall far short of the emissions reductions required to meet the 2030 target put forward in the NDC. Under current policies in place in Australia, total national GHG emissions excl. LULUCF are projected to rise to about 530 MtCO2e by 2020 and 609 MtCO2e by 2030, equivalent to an increase in emissions from 2005 levels (excl. LULUCF) of 5% and 21% by 2020 and 2030 respectively (when compared to 1990 levels (excl. LULUCF) this results in an increase of 33% and 52% respectively). To meet its 2030 emissions targets, Australian emissions should decrease by an average rate of 1.9% per cent until 2030; instead, with current policies, they are set to increase by an average rate of 1.2% per year.
Our current policy projections are based on Australia’s Second Biennial Report’s projections submitted in December 2015 until 2020. These projections were extended to 2030 using our previous current policy projections, which were based on the Emissions Projections 2015–2030 published by the Department of Environment in March 2015 and an additional analysis of the Emissions Reduction Fund and the Amendment to the Renewable Energy target.
At the heart of Australia’s Direct Action Plan is the Emissions Reduction Fund (ERF), which functions as a reverse auction mechanism with an objective to “reduce emissions at lowest cost over the period to 2020” (Australian Government, 2014, p. 68). The ERF—the so-called “centrepiece” of the Australian Government’s policy suite to reduce emissions—however, does not set Australia on a path that would meet its targets. In addition, the fund is plagued by concerns about additionality, as it is difficult to know whether the emissions reductions would have occurred anyway, as well as subject of fiscal concern regarding its cost.
Alongside the reverse auction, the ERF includes a safeguard mechanism, which began operations in July 2016, with a goal of limiting significant emissions increases from large industrial sources. This mechanism applies to around 140 businesses that have facilities with direct emissions of more than 100 MtCO2e. For these facilities, the government set a baseline level using the highest level of reported emissions for a facility over the historical period 2009/2010 to 2013/2014. (?Australian Government, 2016b). An analysis has shown that as a result of this generous baseline the mechanism is not expected to reduce emissions (RepuTex, 2015).
The National Energy Productivity Plan 2015–2030 aims to improve energy productivity by 40% by 2030 through “encouraging more productive consumer choices and promoting more productive energy services” (Australian Government, 2015b). It defines energy productivity as how much value is generated from investment in energy (economic output/energy used) and sets out a workplan that contains broad policy measures as the first steps in the 15 year life of the Plan. More productive consumer choices will be encouraged through efficient incentives, empowering consumers and helping business compete. More productive energy services will be promoted through innovation support, competitive modern markets and consumer protections.
Australia’s energy consumption is still dominated by fossil fuels; 37.8% come from oil, followed by 32.2% coal, 24.2% gas, followed by a mere 5.8% of renewable energy (?Australian Government, 2016a). Australia’s Renewable Energy Target (designed in 2010) aims at increasing the share of generation of electricity from renewable sources. Producers receive renewable energy certificates for every unit of electricity they generate and wholesale purchasers of electricity buy these certificates to meet their renewable energy obligations. It consists of two targets: the Small-scale Renewable Energy Scheme, which supports small-scale installations like household solar panels and solar hot water systems, and the Large-scale Renewable Energy Target (LRET). The LRET originally aimed to achieve 41 TWh of additional renewable electricity generation by 2020, but, in 2015, the government reduced this target to 33 TWh through the Renewable Energy (Electricity) Amendment Bill 2015 (RET). In the same year, coal consumption rose by 3%, due to increased black and brown coal use in the electricity generation (Australian Government, 2016).
The recent A$500 million funding cuts to the Australian Renewable Energy Agency (ARENA) may further impact the development of clean energy in Australia, hampering the rate of development and innovation needed, as well as adding to increased investor uncertainty (Clean Energy Council, 2016).
Targets for 2030 were calculated using CRF 2016 data that is converted from AR4 into SAR by our scientific collaborator, the Potsdam Institute for Climate Impact Research (PIK). For a detailed description on the assumptions used regarding base year emissions, emissions data sources, LULUCF accounting rules supporting this analysis please consult our Australia report.
Current policy projections
The current policy projections are based on the “with measures” scenario of the 2nd biennial report of Australia, as well as our last year current policy projections. Unfortunately, Australia only submitted data up to 2020, so we extend this scenario through growth rates with our former CPP scenario, which used Australia’s 2014-15 emissions projection plus calculations to include the renewable energy target and the ERF (which are now included in the “with measures” scenario).
The values provided in the 2nd biennial report are reported in AR4. For the purposes of this analysis growth rates were applied onto the historical CRF2016 that is converted from AR4 into SAR by our scientific collaborator, the Potsdam Institute for Climate Impact Research (PIK).
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RepuTex. (2015). UPDATE: ERF Safeguards – Toothless Tiger or Hidden Dragon? Retrieved August 17, 2015, from http://www.reputex.com/publications/market-update/update-reviewing-the-safeguard-market-toothless-tigeror-hidden-dragon/
“Safeguard mechanisms” likely to fall short: Reputex | Business Spectator. (n.d.). Retrieved June 9, 2015, from http://www.businessspectator.com.au/news/2015/3/27/policy-politics/safeguard-mechanisms-likely-fall-short-reputex