Australia

NDC description

In its NDC, Australia committed to a 26–28% reduction of greenhouse gas emissions by 2030 below 2005 levels, including LULUCF. This translates into a range of 442 to 464 MtCO₂e emissions in 2030 excluding LULUCF. The target is unconditional and covers the whole of the economy. Australia recommunicated its NDC in December 2020 without increasing its ambition. The CAT Climate Target Update Tracker provides a detailed analysis, however the CAT rating methodology was updated mid 2021 so ratings may differ. The CAT rates Australia’s domestic target as “Insufficient” and its fair share target as “Highly Insufficient”.

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 have been substantial in the past and fluctuate significantly. The conclusions of this assessment are subject to uncertainty as Australia regularly revises its emissions data. See the assumptions section for further details.

The Australian government has already indicated that it supports the use of international units in principle (Australian Government, 2017, p. 41ff), which would further reduce domestic emissions reductions.

The government has stated if past “overachievement” (or “carryover”) surplus emission units from the Kyoto Protocol is included, Australia will beat its 2030 target (Australian Government, 2020f). A number of other countries with similar carryovers have explicitly rejected such a move (OECD, 2019). It is neither legitimate nor defensible under the Paris Agreement (Climate Analytics, 2019c). Carryover would significantly lower the actual emissions reductions to 17–18% below 2005 levels by 2030 (including LULUCF) (Climate Analytics, 2019c).

The CAT rates Australia’s domestic 2030 climate target as “Insufficient” when compared with modelled domestic emissions pathways. All countries need to rapidly reduce their emissions collectively to reach global net zero emissions and achieve the 1.5°C temperature limit of the Paris Agreement. Australia’s NDC is higher than the 1.5°C modelled domestic pathway and as such, Australia has a domestic gap between its target and a Paris Compatible pathway.

The CAT graph outlines Australia’s current NDC target excluding LULUCF, which is far off a 1.5°C compatible domestic emissions pathway. In fact, the NDC target falls between domestic pathway ranges consistent with 2°C and 3°C of warming: if all countries were to follow Australia’s approach, warming would reach over 2°C and up to 3°C.

Australia had an opportunity to improve the ambition of its NDC in 2020, but the government reiterated the same target to the UNFCCC. The “Insufficient” rating indicates that Australia’s domestic target in 2030 needs substantial improvements to be consistent with the Paris Agreement’s 1.5°C temperature limit. The current NDC is equivalent to 12-16% below 2005 levels by 2030 excluding LULUCF, whereas the 1.5°C compatible domestic emissions pathway is 47% below 2005 levels by 2030 excluding LULUCF. To improve its rating, Australia could resubmit its NDC with a more ambitious target compatible with the 1.5°C temperature limit.

We rate Australia’s 2030 emissions reduction target as “Highly insufficient” when compared with its fair-share emissions allocation. The “Highly insufficient” rating indicates that Australia’s fair share target in 2030 is not at all consistent with the Paris Agreement’s 1.5°C temperature limit. Australia’s target is not in line with any interpretation of a fair approach to meeting the Paris Agreement’s 1.5°C limit and need substantial improvements. Some of these improvements should be made to the domestic emissions target itself, others could come in the form of additional financial support for emissions reductions in developing countries. If all countries were to follow Australia’s approach, warming could reach over 3°C and up to 4°C.

Australia’s international climate finance is rated “Critically insufficient” (see below) and is not enough to improve Australia’s fair share rating.

Australia’s international public climate finance contributions are rated "Critically insufficient". Australia has committed to increase its climate finance but contributions to date have been very low compared to its fair share. To improve its rating, Australia needs to stop funding fossil fuels overseas and increase the level of its international climate finance.

Australia has committed AUD 1bn to climate finance (both mitigation and adaptation) over the period of 2015-2020 (Gayfer et al., 2018). Most of the finance is disbursed through multilateral finance, particularly compared with other OECD countries, and focuses on adaptation projects (Gayfer et al., 2018). Overall yearly contributions have slightly decreased since before Paris. The trend is more significant when only projects where climate is a principal component are considered (OECD, 2018). A clear and sustained increase in international climate mitigation finance is fundamental in the period post-2020.

Australia remains committed to the USD 100bn a year goal in climate finance for developing countries through 2025. However, the USD 100bn goal, in itself, is insufficient in the period post-2020. Australia has committed to increase its international climate finance post-2020 by 50% from contributions until 2020, amounting to a commitment of AUD 1.5bn over five years (2021-2025), for both mitigation and adaptation projects. This level of financial contributions would remain insufficient to improve Australia’s CAT climate finance rating.

The biggest four Australian private banks have committed to stop funding coal thermal projects abroad. The government has not made such commitments. Instead, a parliamentary inquiry has been launched into banking practices that choke finance related to Australia’s major exports. Concerns remain about continued support for fossil fuel projects in the Pacific region by Export Finance Australia, a commonwealth company. Australia has been described as “out of step” as the G7 stops international coal finance and calls for a phase out of fossil fuel support while Australia hedges its future on a gas-fired recovery.

Last NDC update

Australia recommunicated its NDC with a submission to the UNFCCC in December 2020, without an improvement in ambition.

Australia’s recommunicated NDC claims that Australia will “overachieve” the target based on government emissions projections. This claim is not, however, supported by Australia’s own recent government projections (based on current policies), which only achieve a reduction of 22% below 2005 by 2030 (incl. LULUCF) (Australian Government, 2020g). In the absence of published quantitative analysis that supports the government’s claim, the argument of overachievement has little or no basis in fact.

So with current policies, Australia would still need to rely on Kyoto carryover units to achieve its target, an approach rejected by other countries with such carryovers. The Australian government claims in its NDC submission that it would not need them, but doesn’t rule out their use.

Only a so-called “Technology sensitivity scenario” (not described in detail in the government projection report but which the government claims, without any published quantitative justification, is aligned with the Technology Investment Roadmap) reaches a reduction of 29% below 2005 levels by 2030 (incl. LULUCF). The communication outlines elements of the Technology Investment Roadmap and some recently-announced measures without quantifying how these measures support achieving the 2030 target.

See the CAT Climate Target Update Tracker for details.

Australia does not have a net-zero target. The recommunicated NDC states Australia will achieve net-zero emissions “as soon as possible” (Australian Government, 2020h). During the Leader’s Summit in April 2021, the Prime Minister had vague messaging on reaching net zero emissions by mid-century. In contrast, the reality on the ground at the state level, in public opinion, across the business sectors and research organisations is very different.

All states (and in addition, the Northern Territory and ACT) now have either aspirational or legislated zero-emissions targets, and some have strong renewable energy targets as well as green/renewable energy hydrogen strategies in place. The government plans to produce a Long Term Strategy (LTS) before COP26 (Australian Government, 2020h) that will require a 1.5°C compatible target. Limiting temperature to 1.5°C is still possible with effective political action in place (Hare et al., 2021).

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 excluding LULUCF to 8% above 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 excluding 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 100 MtCO^₂e 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 had 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:

1. Article 3.7—a special provision of the Kyoto Protocol that applies to Australia, allowing it to include deforestation emissions in 1990 its base year,¹
2. the CAT assessment of likely aggregate credits due to Kyoto LULUCF accounting rules, and
3. surplus units resulting from the first commitment period

Australia was allowed to increase GHG emissions in 2020 to 23–48% above 1990 levels of GHG emissions excluding LULUCF (further details on this analysis in our Australia report). Similar to the first commitment period target for the Kyoto Protocol, Australia claims to have met its target (Taylor, 2020). Meeting the target had less to do with policy action and more to do with specific accounting provisions, which enable emissions in the second commitment period to exceed real emissions.

Based on the latest data and without considering any loopholes, the CAT calculates Australia’s average annual emissions from 2013 to 2020 increased 27% from 1990 levels excluding LULUCF.

Copenhagen 2020 Pledge

Australia almost met its unconditional 2020 pledge (excluding LULUCF), but did not meet its conditional pledge, despite conditions being fulfilled. The CAT calculated the 2020 unconditional pledge to be 528.5 MtCO₂e whereas historical emissions were 529.1 MtCO₂e in 2020 (excluding LULUCF), resulting in a 0.6 MtCO₂e or 0.1% difference. The conditional pledges ranged from 417 MtCO₂e to 473 MtCO₂e, 11% to 21% below 2020 emission levels.

Australia was not expected to meet the Copenhagen pledge before the COVID-19 pandemic. Emissions declined in 2020, but not it was not a result of effective climate policy. Emissions dipped due to renewable energy displacing coal generation, lower LNG venting and flaring, COVID-19 restrictions on transport, and the lasting effects of drought on the agricultural sector (DISER, 2021a).

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 was Australia’s unconditional pledge. In its Copenhagen Accord Australia pledged “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 CO₂eq 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)².

The CAT estimates Australia’s unconditional Copenhagen pledge to reduce emissions by 5% below 2000 emissions by 2020 is equivalent to an approximately 8% increase above 2000 levels excluding LULUCF (or to a 11% increase above 1990 levels of GHG emissions excluding LULUCF³) after 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 as New Zealand, indicate that they would use the Kyoto Protocol rules to increase their allowed GHG emissions as illustrated above. The Australian government applies such a Kyoto accounting system to generate a large carbon budget for the period 2013 to 2020 and allowing emissions to increase under their tracking of the 2020 target under the Copenhagen pledge (Department of the Environment and Energy, 2018).

1 | 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)

2 | 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.

3 | CRF 2014 data.