CLIMATE CHANGE PART 3: What is Being Done About Climate Change?
1. The 2015 Paris Agreement
This built on an earlier arrangement called the Kyoto Protocol and set out to get individual countries to define what they would do to achieve a target of less than 2 degrees average temperature rise over pre-industrial times and make efforts to achieve a target of 1.5 degrees. Furthermore, there was an aim to reduce net emissions to zero in the second half of this century. Countries who signed up had to determine, and report on, their Nationally Determined Contributions (NDCs). There is no enforcement mechanism.
It is all about stabilising and reducing those greenhouse gases which are causing global warming. Future temperature rises will depend on the amount of CO2 in the atmosphere.
The next diagram covers the time from the Paris Agreement (2015) until 2100. On the right expected temperatures in 2100 are shown; on the left the amount of CO2 (gigatons per year) put into the earth’s atmosphere. The top red line shows what could happen if no action is taken; the next orange line current government policies (that is, they don’t match the commitments made); the blue line current Paris Agreement NDCs; finally, a 2 degrees path which means that all countries need to peak their emissions by 2030 and then reduce CO2 steadily. These temperature rises are being revised constantly with new evidence.
Source: Climate Action Tracker (derived)
2. How does Australia’s Paris commitment, and our performance, compare to other countries?
Assessments by the group Climate Action Tracker has rated our NDCs (Nationally Determined Contributions, i.e., what we have pledged under the Paris Agreement (a 26 to 28% reduction on 2005 levels by 2030) as “Insufficient”. The group Germanwatch, at the end of 2018, put us at 55th out of 60 on a performance index. Our per-capita greenhouse gas emissions (25 Tonnes of CO2 equivalent per year) and our national climate policies were both ranked second worst. Even the Secretary General of the UN called Australia a “holdout”.
The Federal Government says that its target will be met but this has been questioned. The achievements made so far have not come from Federal Government policies but from the State governments (NSW and QLD) restricting land clearing (about half of all our emissions savings), and households installing solar panels.
Electricity generation emissions are going down (because of renewables). Transport and fugitive (from gas extraction) emissions are going up.
To be fair, our targets and policies are not a lot worse than some other OECD countries. It is just that in total not enough is being done. Generally, the Paris pledges are not enough, and current governments’ policies are even worse which is driving us towards serious warming by the end of the century and beyond. As of October 2021, estimates are that NDCs will get us to 2.7 degrees rise, and actual policies will get us over 3 degrees C.
3. What is Australia doing to reduce emissions? (Skip this if not interested in politics)
To encourage this change governments have proposed different incentives:
An Emissions Trading Scheme (ETS) such as the Cap-and-Trade scheme used in Europe. Basically, there is a cap on allowable emissions. The permits created are tradeable and this sets up a market whereby industries who find ways to do more using less energy can sell permits to those who emit more carbon when they expand their business. This was proposed in Australia under Rudd, supported by Turnbull in Opposition but rejected for political reasons.
A Carbon Pricing Scheme (the “Carbon Tax”). Under this, large emitters had to purchase carbon units from the Government. The incentive was for businesses to do more using less energy, and for a while it seemed to work as more energy was produced from renewables. This was implemented in Australia by the Gillard Government but repealed under Abbott.
Emissions Reductions Fund (Direct Action). When Abbott, a climate sceptic, became prime minister he sacked the advisory Climate Commission but set up this fund, still current. Money is allocated for carbon abatement projects. For example, carbon sequestration projects such as de-stocking, not removing or increasing native vegetation; producing usable methane from piggeries; or more efficient savannah burning in the NT. It is not affecting the electricity sector, which produces about 35% of total emissions.
Renewable Energy Target. This scheme is currently working in Australia. It was set up under Gillard and an attempt to remove it was made under Abbott. There was a target to produce 23.5% of electrical energy from renewables by 2020. This creates a market subsidy whereby certificates for renewable energy are issued to power suppliers who sell them to electricity retailers and large users. The more renewable energy they sell the more they benefit. As more renewable energy is stimulated by this system the subsidy will reduce in value because it is traded in a market. The body regulating this scheme say we are on course to reach the target. Expires 2030.
A Clean Energy Target (CET). This was proposed by the 2016 Finkel review. This would replace the Renewable Energy Target. It proposes setting a target for “clean” energy which would be technology neutral, ie it could come from renewables, or “clean” coal, or gas. Not implemented.
National Energy Guarantee (NEG). Proposed in October 2017 by the Turnbull Government, this emphasises reliability and cost of electricity. Retailers would have to buy a certain amount of power from “dispatchable sources” (coal; gas; batteries; pumped hydro). This was abandoned by the Morrison government.
Climate Solutions Package. This is the current 2019 policy of the Morrison Government which continues the Emissions Reduction Fund.
Technology Investment Roadmap. Introduced by the Morrison government in 2020. This will put funding into research — hydrogen from renewable energy (RE); batteries; low carbon steel and aluminium; carbon capture and storage (CCS); and using soils as a carbon sink. Unfortunately, there seems to be no inclusion of funding to improve transmission lines from renewable energy projects to manufacturing centres.
The announcement to reduce net emissions to zero by 2050. On the eve of COP26 in Glasgow (held November 2021) the Federal Government announced it would introduce a plan to reduce emissions to net zero by 2050. Details are scarce and there is no increase in the 2030 NDC made to the Paris agreement which is what COP26 is about.
4. Is this enough, and if not, what should governments do?
Emissions reduction is a complex problem which involves politics, denial, and vested interests. Experts are almost unanimous that we need to achieve large reductions (more like 70% from 2005 levels) by 2030 to avoid catastrophic consequences.
The world is already close to the level of CO2 in the atmosphere for a safe long-term climate, with current levels over 410ppm. A temperature rise of above 2 degrees could create tipping points where mitigation action is not effective.
There is a consensus among economists, including the Productivity Commission, that market driven schemes such as an emissions trading scheme would work best in a market economy like Australia’s. These schemes put a price on CO2 emissions and favour those companies which become more energy efficient. It gives a monetary incentive for businesses to come up with ways to use less fossil fuels. For political reasons the current Federal Government shows no interest in such a scheme. This may change when international pressure is applied in the form of carbon tariffs on our fossil fuel exports, however we have delayed action so long that this approach may no longer be appropriate and new ways to reduce emissions are becoming possible.
Many large energy corporations recognise that renewables are going to provide the great majority of primary energy and are calling for a carbon pricing mechanism which will lead consumers into lower carbon choices. Fortescue is working on massive hydrogen production. The Business Council of Australia now committed to doing its part in reducing emissions. Business likes to have policy certainty and responds to incentives.
