Australia

Under the Morrison government, Australia made very little effort to increase its climate action in the crucial period to 2030, refusing to increase the 2030 target it submitted in 2015 ahead of the Paris Agreement’s adoption. While the Government adopted a net zero by 2050 target, the actions set out in its Long-Term Strategy will not achieve that target, falling short by a considerable margin. Meanwhile, the government continues to support new fossil fuel projects, which will drive emissions up, not down.

Australia updated its NDC and submitted a Long-Term Strategy in October 2021. In this update, Australia simply reiterates the targets from its first NDC without increasing them: a 26-28% reduction in GHG, including LULUCF, from 2005 by 2030. The CAT continues to rate this target as 'Highly insufficient' when compared to its fair-share emissions allocation and 'Insufficient' when compared to the emissions cuts that need to occur within Australia's borders.

The former Prime Minister Scott Morrison explicitly ruled out increasing Australia’s 2030 target, contrary to the agreement that Australia signed onto in the Glasgow Climate Pact for all countries to revisit and strengthen their NDCs this year to align with the Paris Agreement’s 1.5^oC goal.

On 21 May, the Morrison government lost the election to Labor, and new Prime Minister Anthony Albanese has taken office.

Labor has committed to strengthening the country’s NDC target to a 43% reduction in GHG, below 2005 levels by 2030, incl. LULUCF. While a significant improvement on the current target, it would still far short of a 1.5^oC compatible reduction. For that, domestic reductions by 2030 of at least 57%, and full fair share reductions taking into account climate finance commitments of at least 66%, are needed.

The Australian Greens and a group of so-called ‘Teal’ independents are proposing stronger 2030 targets for domestic emission reductions, which would be aligned with the 1.5^oC goal.

Under current policies and actions Australia’s emissions will decline by 30% by 2005 or excluding emissions from LULUCF only 15% by 2030 from 2005 levels.

Emission reductions in the latest policies & action projections are largely from renewable energy uptake in the electricity sector. The Australian government is also continuing support for many new coal and gas projects—with 114 projects in Australia’s investment pipeline. Among these is Woodside Energy’s Scarborough-Pluto gas and LNG expansion, which will add just under 1.4 GtCO₂e of GHGs into the atmosphere from gas production out to 2055. This is despite the International Energy Agency’s Net Zero scenario showing that globally, gas must be phased out by 2040.

Like previous years, the 2022-23 federal budget has increased public funding for LNG, gas, unproven carbon capture and storage, and so-called ‘clean’ but not necessarily ‘green’ hydrogen. At the same time, it provides minimum new support for renewable energy. The Government has committed AUD 1.3bn to energy and emissions reductions measures in the Federal budget, but a significant part of the spending flows to high-emitting energy projects.

While the Federal 2022-23 budget has increased allocation for disaster resilience, this effort will fall short unless the government addresses the root cause of the problem - climate change - by changing its resistance to renewable energy transformation.

The Long-Term Strategy (LTS) sets a net zero emissions target for 2050. However, the government's plan not ambitious enough, only reducing emissions by 66-85% from 2005 levels by 2050 (rather than the 100% that is explicit in a net zero target). The strategy relies on global technology trends, carbon offsets and further unknown technology “breakthroughs” rather than producing any new policies. The CAT evaluates the design of this net zero target as “Poor”.

On a positive note, effective climate policy is evident in most states and mainland territories, with the exception of Western Australia.

The CAT rates Australia’s climate targets, policies and climate finance as “Highly insufficient”. The “Highly insufficient” rating indicates that Australia’s climate policies and commitments are not Paris Agreement Compatible. Australia’s 2030 domestic emissions reduction target is consistent with warming of 4°C if all other countries followed a similar level of ambition. Under Australia’s current policies, emissions will continue to rise and are consistent with more than 3°C warming. To get a better rating, Australia needs to set a more ambitious 2030 target for emissions reductions, establish associated policies, and provide finance to support others.

GHG emissions in Australia have dipped due to a range of factors, but effective climate policy at the national level is not one of them. The government's 2021 baseline projections excluding LULUCF emissions show Australia’s current policies and action are on track to reaching 30% below 2005 levels by 2030 - excluding LULUCF emissions 15% below 2005 levels.

These projections show a decline in emissions in the electricity sector, whereas other sectors of the economy show a small increase over the next decade from 2021 levels. Declining power sector emissions are a result of an increasing uptake of rooftop solar and large-scale renewables pipeline. States continue to ramp up action, and renewable energy targets, whereas the national government has no renewable energy generation nor capacity target. The CAT rates Australia’s policies and action as “Insufficient”.

In line with its 2021-22 budget, which was based on a “gas-fired recovery”, the federal government’s 2022-23 budget continues to support the gas industry, with an AUD 50m subsidy for the gas industry to accelerate the development of priority gas infrastructure. It also provides AUD 247m to support increased private sector investment in technologies to increase use of hydrogen, without any clear indication of whether it will be “green” hydrogen which doesn’t rely on fossil fuels.

Additionally, this year’s federal budget implicitly provided another AUD 300m to the National Water Grid to support a “sustainable development” (industrial/ LNG) precinct “Middle Arm”, Northern Territory. Another AUD 200m is allocated for Middle Arm industries for the infrastructure development of the supply chain of LNG. According to the IEA, the world already has sufficient oil and gas supply and no new fields development is needed if the world is serious about reaching net zero emissions in 2050.

In October 2021, the Australian Government released the second iteration of its Low Emissions Technology Statement (LETS). Building on its 2020 LETS that predominately discussed options, the 2021 LETS contains detail on programmes, investments and actions without any additional commitment to achieving net zero emissions in 2050. The only addition in the 2021 LETS is the introduction of ultra low-cost solar electricity generation as another priority technology.

In another regressive step, the government is continuing its attempt to change the remit of the Australian Renewable Energy Agency (ARENA), a government organisation that facilitates research and the flow of finance into the renewables sector, to include CCS. The move to change ARENA’s mandate has been twice rejected by the Senate, but after Parliament rose ahead of the election, Energy Minister Angus Taylor introduced a new set of regulations with these rules, which will apply unless specifically rejected by the Senate, post-election. Despite huge government funding for CCS, there is only one CCS project operational in Australia: the Gorgon project, which has fallen well short of the carbon capture rate contractually agreed and has experienced issues and delays since start-up.

The government is considering paying coal generators to stay operational despite the need for an immediate coal phase-out. A government-funded programme is offering grants to build the capacity of diesel reserves. The Future Fuels Strategy demonstrates the government has no intention of introducing any legislation to support a switch to electric vehicles, neither through subsidies nor a phase-out date for fossil fuel new car sales.

The federal Climate Solutions Fund and the Safeguard Mechanism provide no incentives for large industrial emitters to reduce emissions; it even allows for increasing baseline emissions. Australia ranks eighth highest in the world for its emissions per capita.

While the federal government continues to rely on ineffective policies, state level action shows some climate leadership. Most states and territories, with the exception of Western Australia, have a higher level of ambition to reduce emissions and the implementation of renewable energy targets.

See the policies and action section for more details.

Australia submitted an updated NDC in October 2021 without raising its 2030 target – still aiming to reduce emissions by 26% to 28% below 2005 levels by 2030 including LULUCF. Using AR5 GWP, this translates to 11% to 13% below 2005 levels by 2030 excluding LULUCF, or an absolute emissions level of 465 to 478 MtCO₂e excluding LULUCF, while AR4 GWPs values are 457 to 469 MtCO₂e.

The updated NDC includes a commitment to net zero by 2050, reiterated in its new Long-Term Strategy (LTS); however, both targets rely heavily on technology development and offsets with no plans to phase out coal or curb fossil fuel exports.

Australia’s failure to increase its 2030 climate action contravenes the Paris Agreement’s requirement that each successive NDC should present a progression in mitigation ambition. The CAT rates the NDC as “Insufficient” as it would lead to over 2°C and up to 3°C of warming when compared to modelled domestic emissions pathways.

The CAT rates Australia’s fair share target “Highly insufficient”. The “Highly insufficient” rating indicates that Australia’s climate commitment 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. If all countries were to follow Australia’s approach, warming could reach over 3°C and up to 4°C. Given that its domestic target is not Paris compatible, improvements in Australia’s fair share contribution would need to come in the form of both strengthened domestic emissions reductions and additional emissions reductions achieved in developing countries through finance.

The “Critically insufficient” rating indicates that Australia’s climate finance contributions have been low and are not in line with any interpretation of a fair approach to meeting the Paris Agreement’s 1.5°C limit. To receive a better rating, Australia needs to stop funding fossil fuel overseas and increase the level of its international climate finance. The Federal Government withdrew from the Green Climate Fund in 2019, and declined to put funds into its replenishment, and the situation has not changed.

Australia’s climate finance is not sufficient to improve the fair share target rating, and the CAT rates Australia’s overall fair share contribution as “Highly Insufficient”.

Australia is flagged under this rating because its maximum land use, land use change and forestry (LULUCF) net emissions in the last 30 years are greater than 30% of total emissions. Since 1990, deforestation emissions have decreased with a periodical rise during 1998 and 2007, but this previous peak indicates the high potential for deforestation emissions if policies are reversed and impacts its targets and accounting.

Australia is the world’s only developed country that is classified as a deforestation hotspot. Despite this, the government intends to meet its NDC and net zero target by relying on LULUCF as a carbon sink. Government projections (from 2021) indicate LULUCF accounts for -16 MtCO₂ in 2030. Government data regularly recalculates LULUCF for historical and projected emissions. The recalculations highlight the uncertainty of this sector: data changes have significant repercussions on Australia’s progress in meeting emissions targets. Effective climate policy, particularly in the emissions-intensive energy and industry sectors, would reduce the need to rely on uncertain LULUCF carbon sinks.

We evaluate the net zero target as “Poor”. Australia has recently released a long-term emissions reduction plan for achieving net zero emissions by 2050, also submitted as a Long-Term Strategy. The LTS sets a net zero emissions target for 2050. Yet the strategy presents scenarios which only reduces emissions by 66% - 85% below 2005, rather than 100%. The strategy does not come up with new any new policies, and relies on global technology trends, carbon offsets and further unknown technology “breakthroughs” (DISER, 2021e). There are also no plans to phase out coal, curb fossil fuel exports, nor to hold heavy polluters accountable. The Emissions Reduction Fund (ERF) and Australian Carbon Credit Units (ACCUs) system has also been heavily criticised by one of its own former regulators as “fraudulent” because of its ineffectiveness in regulating polluting companies.

The government states in this planning document that its net zero by 2050 commitment, as with the 2030 NDC target, will not be legislated into law (DISER, 2021e). Despite this, all states (and 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. It is still possible for Australia to get emissions onto a pathway to limit global warming to 1.5℃ this century, but urgent action is required. To be 1.5℃ compatible, Australia would need to reverse its current federal policy direction. A 1.5˚C pathway was developed in the CAT’s “Scaling up Climate Action Australia” report.

The full net zero target analysis can be found here.