Australia will reduce its greenhouse gas emissions by 26-28% from 2005 levels by 2030, Prime Minister Tony Abbott said Tuesday, leaving the nation trailing most other developed countries in efforts to combat climate change.

The government plans to meet the target through its Direct Action policy, which relies on the Emissions Reduction Fund to pay polluters to cut their emissions.

Australia does not plan to make use of the international carbon market, but will reconsider allowing emitters buying foreign offsets in a climate policy review in 2017-2018. It will carry over its surplus AAUs from the first Kyoto commitment period and use those towards the target, Environment Minister Greg Hunt said.

“Our emissions reduction per person is the highest in the world,” Abbott said.

But numbers from the Climate Institute showed the target would make Australia a laggard in climate efforts compared to other developed countries.

It would require Australia to cut its emissions at an annual rate of 1.6-1.9% throughout the 2020s, compared to an average 2.5% for other developed countries, and in 2030 Australia’s per capita emissions would be 14-15 tonnes of CO2e, higher than any other western nation and twice as much as Germany and Japan.

The government has argued that its target will equal the efforts undertaken by other countries due to Australia’s population growth.

The target equals a cut of 19-22% below 2000 levels, which is below the high-end of Australia’s own 2020 target, which is a 5-25% emission cut below 2000, depending on international action.

It is also significantly lower than the 45-63% cut on 2005 levels recommended by the Climate Change Authority, the independent climate policy advisory body that the government tried to shut down last year.

CRITICISM

Observers slammed the target as unambitious and inadequate.

“The key question for investors is whether Australia’s target will deliver a credible signal for capital in managing the transition to a low-carbon economy. We are concerned that a target of 26% … will not deliver the certainty that investors are looking for,” said Emma Herd, CEO of the Investor Group on Climate Change.

“The initial target offer ahead of the Paris climate negotiations in December is a core test of the government’s climate and economic credibility,” said John Connor, CEO of The Climate Institute.

“This target fails tests both of scientific credibility and economic responsibility in a world increasingly focused on modernising and cleaning up energy as well as economic systems,” he said.

“If every country matched Australia’s effort the world would be on track for 3-4 degrees of warming,” said Kellie Caught at WWF Australia. “It’s in Australia’s interest that the world acts to cut carbon pollution, but we can’t urge others to do more if we sit at the back of the pack. We can get a better outcome at the front.”

The Energy Supply Association of Australia, meanwhile, said the target was a “credible starting point” but that the government must back it up with a credible policy platform.

“We won’t be able to buy our way to 26-28 per cent and beyond. We will need a credible, durable and bipartisan carbon policy to achieve this target. We have shared the frustration of the stop-start approach to climate policy over the past decade, but at the same time we have learnt a lot, both here in Australia and globally, about what works and what doesn’t,” said ESAA chief executive Matthew Warren.

NEW POLICIES?

Analysts Bloomberg New Energy Finance said Australia’s target was “right in the middle of the pack with its trading partners” but noted that “Australia, like most countries, is still not doing enough to keep the projected rise in global temperature below 2 degrees”.

BNEF estimated the target would require Australia to reduce its emissions to 7% below what was likely to be its business-as-usual level in 2030, and warned the government that it would need strong new policies to get there.

“At present, Australia’s Renewable Energy Target only supports an increase in clean capacity out to 2020, and it’s doubtful whether the Direct Action policy can get Australia to its 2020 goal, let alone the more challenging 2030 pledge,” said Kobad Bhavnagri, head of BNEF Australia.

Analysts at Reputex, meanwhile said Australia’s emissions were likely to increase around 12% over the next ten years due to increased deforestation, and LNG and coal export growth.

“The government will therefore need to take strong policy action even just to curb that growth, let alone reduce emissions towards the target. We currently project that the government’s $2.55bn Emissions Reduction Fund will be fully eroded by next year, while emissions baselines proposed to be set under the government’s Safeguard Mechanism are set too high to have any impact,” said managing director Hugh Grossman.

“The government has a significant policy gap to fill in terms of how it will address forecast emissions growth.”

The government made no indication it is planning new policies but said it would re-examine the situation in two years.

“Australia’s 2030 target is achievable with Direct Action. Australia is meeting our 2020 target through Direct Action policies that reduce emissions, increase energy productivity and improve the health of soils and the environment. These policies will also enable us to meet our 2030 target,” the government said in a fact sheet outlining Australia’s path to meeting the target.

“At the core is the $2.55 billion Emissions Reduction Fund and its Safeguard Mechanism. This is complemented by the Renewable Energy Target, energy efficiency improvements, phasing out very potent synthetic greenhouse gases, and direct support for investment in low emissions technologies and practices,” it said.

It added it plans to “consider Australia’s emissions reduction policies in detail in 2017–2018, in close consultation with businesses and the community.”

LUKEWARM INTERNATIONAL RESPONSE

The international response to the announcement was lukewarm.

“Australia’s weak target is another serious blow to its international reputation. As with Prime Minister Abbott’s attempt to ignore climate change when hosting the G20 last year, this will send a serious shudder through the Pacific and raise concern amongst its closest allies, including the United States and Europe,” said Tony de Brum, foreign minister of the Marshall Islands.

Meena Raman, a UN climate negotiations expert with green group Third World Network also condemned Australia’s goal.

“Australia’s target puts it at the bottom of the barrel. Given how weak the US and European targets are to begin with this suggests the outcome of the Paris Summit will be miles away from what we need to seriously reduce the risk of catastrophic climate change,” she said.

By Stian Reklev – stian@carbon-pulse.com

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