Reducing Australia’s Greenhouse Gas Emissions

This week the Climate Change Authority will release its review of Australia’s greenhouse gas reduction goals. The review is intended to recommend greenhouse gas emission reduction goals for the short, medium and long term that are in Australia’s ‘national interest’.

Currently, Australia has an international undertaking to reduce emissions by at least 5 per cent by 2020 compared with 2000 levels; however Australia has indicated it may amp up the reductions to 15 or even 25 per cent. In its draft report, released in November 2013, the Climate Change Authority’s view was that Australia should reduce emissions by more than 5 per cent. It had three main reasons for doing so:

·       other developed countries are trying harder;

·       so as to avoid dangerous climate change the global goal is to limit the increase in global average temperature compared with pre-industrial levels to below 2 degrees, and a 5 per cent reduction in Australia is considered inadequate if it is to ‘play its part’; and

·       it might be easier to achieve the more ambitious targets than previously thought, given that the costs of low emissions technologies have fallen significantly, and emissions are not growing as quickly as previously forecast.

Therefore, the CCA favoured a reduction target of 15 or 25 per cent over 5 per cent. But how will Australia do this? Well, it could purchase international emissions reductions to help it meet such a target. From an environmental perspective it does not really matter where emissions are reduced, and purchasing international emissions reductions would lower the cost of Australia’s emissions reduction task if the cost of emissions reduction is lower overseas. The CCA also reckoned that there are substantial low to medium cost emission reduction opportunities, particularly in the electricity sector through a mix of demand reduction and decreased generation emissions intensity. As the CCA noted though, neither of these paths come without their challenges.

Essentially, as is always the case with climate change, the trade-off is between ‘pain’ now and ‘pain’ later. In my view, the CCA has made a convincing case so far that a reduction target of 5 per cent below 2000 levels by 2020 is too low. Beyond that, it depends upon how much ‘pain’ we want to leave until the ‘20s, ‘30s and ‘40s.