Australia proposes quota system to phase down HFC emissions

Published 03:25 on October 7, 2015  /  Last updated at 03:25 on October 7, 2015  /  Asia Pacific, Australia  /  No Comments

Australia on Wednesday released an options paper on measures that could cut emissions from ozone-depleting substances and synthetic GHGs by up to 80 million tonnes of CO2e by 2030, including a quota system for the controlled phase down of HFCs.

Australia on Wednesday released an options paper on measures that could cut emissions from ozone-depleting substances and synthetic GHGs by up to 80 million tonnes of CO2e by 2030, including a quota system for the controlled phase down of HFCs.

The paper, a result of an 18-month public consultation process, included four options for actions to be taken, ranging from being cost-free to taking actions costing an estimated A$482 million ($346m).

“A number of options have been put forward by business that support the Government’s commitment to reduce greenhouse gas emissions by 26-28 per cent below 2005 levels by 2030. They would also contribute to Australia’s current target to reduce emissions to five per cent below 2000 levels by 2020,” Environment Minister Greg Hunt said.

Measures included phasing down import, use and manufacturing of hydrofluorocarbon (HFCs) – most of the cuts achieved so far have been through phasing out HCFCs – as well as increased energy efficiency and administrative effectiveness.

INTERNATIONAL PROPOSAL

“To do this we are fast tracking work to reduce our domestic HFC emissions by 85 per cent by 2036. This is in line with the most ambitious HFC phase-down proposals under the Montreal Protocol,” Hunt said in a statement.

Canada, Mexico and the United States have submitted a proposal to cut HFC emissions by 85% in developed nations by 2036 and in developing countries by 2046, a measure they say would save a cumulative 90 billion tonnes of CO2e in emission cuts by mid-century.

Globally, HFCs account for about 500 million tonnes of CO2e per year currently, nearly equal to Australia’s annual GHG emissions, but are estimated to grow to 8.8 billion tonnes per year by 2050 if left unchecked.

“Australia could either adopt the 2015 North American Amendment proposal or design an accelerated phase down,” the paper said.

A quicker phase down would reduce domestic emissions by 23 million tonnes of CO2e between 2017-2030, while the American proposal would see 12 mt reduced.

CAP BUT NO TRADE

To manage the phase down, the government proposed a scheme that has all the elements of a cap-and-trade scheme with the exception of the trade element.

HFC emissions would be capped each year, and emitters would be allocated a certain amount of quotas each year to ensure total emissions did not surpass the cap.

The government’s analysis foresaw giving 80% of quotas each year to existing facilities and set aside 20% in a pool for new entrants, with unused new entrant quotas distributed to current emitters.

But the paper said quotas could also be sold in regular auctions, or allocated based on import date.

“It will be necessary to establish a baseline for quota allocations, should quota be distributed on the basis of past market share,” the paper said. “For the Australian accelerated phase-down, the baseline is based on the average consumption of HFCs between 2011 and 2013.”

The options paper will be out for public consultation until Nov. 16, and the new policy is expected to be finalised early next year.

By Stian Reklev – stian@carbon-pulse.com

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