Nov 14, 2014 - 12:30pm
This article first appeared in Crikey on 14 November, 2014.
Deputy CEO, The Climate Institute
If Australia is to match the efforts of other nations, let alone play its fair part on climate change, our government needs to find a way to crab-walk towards a credible climate policy. The Emissions Reduction Fund in its current form can’t even come within cooee of the kind of emission cuts we need.
The recent announcements from the United States, China and the European Union (and more to come soon) create an opening to do just that. Since 2010, the government’s constant caveat for inaction or low action has been that Australia would review its climate stance when major trading partners like the US and China took action.
That has been the case for some time, but Wednesday’s joint statement by the US and China put it in the spotlight. The US said that it would cut emissions by 26% to 28% below 2005 levels by 2025, while China pledged to peak emissions around 2030, possibly sooner.
If Australia were to try and match the US it would mean about a 30% reduction by 2025.
Our current policy doesn’t allow us to even get close of that kind of reduction. Indeed, our calculations show that using the Emission Reduction Fund (ERF) to achieve a US-equivalent target would cost taxpayers $9 billion a year (if you believe that the ERF can achieve 5% within its allocated $2.55 billion budget) or up to $30 billion a year (if you consider Treasury’s low end projections of future international carbon prices).
The US and Chinese pledges come on the heels of the European Union’s commitment earlier this month to reduce carbon pollution by at least 40% by 2030 and boost renewable energy to 27% of total energy use, including transport. The latter works out to more than 40% of European electricity coming from renewables.
Meanwhile, from China to Chile and South Korea to South Africa, carbon pricing mechanisms are getting off the ground.
Wednesday’s announcement should be a cue to acknowledge that Australia’s minimum 5% by 2020 emission reduction target is inadequate, as independent bodies like the Climate Change Authority (CCA) have pointed out.
Some have responded by attacking the credibility of these new targets. There’s plenty of policy behind them.
At a federal level, the US has passed a series of rules, from emission limits on cars and existing fossil fuel power plants, to emission limits on new coal and gas plants. The country is developing emission standards for heavy trucks — responsible for 20% of American transport emissions. It is boosting energy efficiency standards for equipment and buildings.
More than half of US states now have mandatory renewable energy targets, while another eight have voluntary targets. Nearly as many states have binding energy efficiency targets. These, combined with private-sector investment in new areas like solar panel leasing, electric vehicles, smart grids and electricity storage, are driving growth in renewable electricity production, clean technologies and energy efficiency.
True, the Republican Congress could make some of the new rules harder to implement. But winding back executive action from the President can be vetoed by the White House.
China’s action shouldn’t be scoffed at either. China’s need to fix its toxic air is a key driver of efforts to cap carbon pollution and invest in clean energy alternatives. It is now the world’s biggest investor in clean energy, and the scale of Chinese investment in clean energy is transforming the energy economics of every other country.
The agreement also indicated a range of joint actions in energy efficiency, refrigerants, carbon capture and storage and cities. This builds on a strengthening lattice work of bilateral initiatives across a range of countries.
Judging by some news headlines, the US-China announcement came as a surprise. But last year Australia and other countries agreed to advance their initial post-2020 targets by early 2015. It is a mark of their serious intent that the US, China, and Europe are signalling early.
The new targets countries put forth will now be reviewed and scrutinised internationally before they are attached to the post-2020 framework to be agreed in Paris at the end of 2015. The new framework is also likely to create an ongoing cycle of ever-increasing emission reduction ambitions, and embed the principle of not backsliding on previous targets.
Just this week The Climate Institute called for the Australian government to begin an independent, transparent domestic process to define our own post-2020 targets. Our analysis found that for a serious climate effort Australia needs a net 2025 emissions reduction target of 40% below 2000 levels and decarbonisation of the economy from 2040 if there are further delays.
Ultimately, Australia needs a domestic policy framework that can survive international investment, scientific and diplomatic realities. Burying your heads in the sand on global action on climate change is dangerous. At some point you will suffocate.
Erwin is Deputy CEO of The Climate Institute. With nearly 20 years practical experience in climate change policy
and research, Erwin has developed and led many national and
international programs aimed at reducing greenhouse pollution. This work
has been undertaken in Australia, Europe, North and South America, the
Pacific and Antarctica. He has represented non-governmental groups and
advised government and business in national, regional and international
fora, including being a non-governmental expert reviewer of the reports
of the UN’s Intergovernmental Panel on Climate Change. Erwin has written, researched and produced many
publications on climate change and energy policy including a number of
review papers in scientific journals such as the Medical Journal of