The irony of Australia saying that it will be difficult to meet its proposed Kyoto target because companies are building lots of coal and gas projects has not been lost on delegates. From a climate change point of view, this is clearly an argument that is on a hiding to nowhere. The entire point of these talks is to provide incentives for countries to do the opposite.
At times, Australia bases its entire justification for its target on projections that suggest emissions in 2020 would be 22 per cent above where they would have been if the nation had not committed to, as a minimum, reduce emissions by 5 per cent below 2000 levels. Using projected emissions – which no one here really believes anyway – is unnecessary and puts the government in a defensive position.
Let us look for example at the 22 per cent below business as usual (BAU) figure. South Korea committed to reduce emissions by 30 per cent reductions below BAU by 2020. Much poorer South Africa has committed to a 34 per cent below BAU and Brazil a 36-39 per cent reduction? I could go on. (For details on national targets and actions, see our Global Climate Action Map.)
Perhaps a better approach by Australia would be to focus on the fact that from 2015 the nation will have a hard pollution limit on major emitting industries and this will allow Australia to meet any 2020 commitment it makes when it finalises its 2020 targets in 2014.
If Australia moves to a stronger and more equitable target, the emission cap under the domestic scheme can just be strengthened to reflect this new commitment.
The figure below illustrates this point. It compares Australia’s proposed Kyoto target with what Australia’s domestic policies will achieve by default. (If the Parliament disallows the government’s proposed domestic emission limit in 2014, a ‘default’ cap is triggered. This achieves at least a 12 million tonne per year reduction).
The figure also includes the effect of Australia’s Kyoto bonus generated from overachieving its first Kyoto target and the benefits Australia can receive from reducing emissions from managed forests. This bonus inflates the total amount of emissions the government can release to 2020.
Yesterday, the government said it would use the bonus to offset the projected increase in emissions over the next few years of the next commitment period and until the emission limit kicks in from 2015.
Figure 1: Australia’s 2013-2020 Kyoto target and Australia’s current policy settings.
Note: This graph does not use the most recent AR4 global warming potentials to be used in the Kyoto second commitment period as Australia’s emission projections do not currently include these values. As such Australia Kyoto targets and Kyoto bonus has been adjusted to reflect pre-AR4 values.
While Australia should have used this bonus to increase its global ambition, it is important to note that the existence of this bonus is unlikely to materially affect domestic emission reductions. This largely will be determined by the level of the carbon price and other policies like the Renewable Energy Target. The Kyoto bonus is – based on current forecasts – unlikely to materially impact these incentives. It is more likely to impact the total amount of emission units Australia imports from the European Union and elsewhere to meet its national target.
What this figure shows is that, under current policy settings, Australia is on track to meet its proposed Kyoto commitment without any additional policy intervention. In fact, if emissions remain depressed due to ongoing low electricity demand, Australia may even over achieve its proposed target (illustrated by the dash line, Policy – recent). This is consistent with the behaviour of other countries at these meetings where many commit to less than they feel their domestic policies will achieve to avoid international embarrassment around failing to meet a promised target.
Australia has been through a bitter political battle and implemented a set of flexible limits on pollution that can achieve any international commitment we commit to at least cost. Use of projections to justify a position is counterproductive and not really credible in the negotiations. Better to focus on what Australia can and will achieve over the coming years in driving clean energy and low carbon investment. Perhaps we could even celebrate the chance to reduce our economic dependence on fossil fuels.
Erwin Jackson is the Deputy CEO of The Climate Institute.