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Stronger targets proposed in Climate Change Authority draft report

Today the Climate Change Authority (CCA) released a draft version of its ‘Targets and Progress Review’. The review, which according to the Clean Energy Act 2011 must be finalised by 28 February 2014, is to be used by the Minister in determining Australia’s emissions reduction goals under the carbon price mechanism. The draft report proposes two sets of caps; each set of caps defines a different emissions trajectory between now and 2020, and then to 2030. The CCA is calling for stakeholder input until 29 November 2013.

The proposed targets
Two scenarios are put forward. The more ambitious scenario aims to reduce greenhouse gas emissions 25% below 2000 levels by 2020 and 40 to 50% by 2030. The less ambitious scenario aims to reduce greenhouse gas emissions 15% below 2000 levels by 2020 and by 35 to 50% by 2030.

Australia’s current (and bipartisan) 2020 target is 5% below 2000 levels by 2020. Both of the above options represent a strengthening of Australia’s national and international commitment. The CCA justifies this on a number of fronts:
  • The science: the recently released report from the Intergovernmental Panel on Climate Change confirms that anthropogenic warming is real and a genuine risk. See this recent FlagPost for what the IPCC report said about Australia.
  • International action: the world has agreed to try to maintain the global average temperature rise to below 2 degrees; and Australia has agreed to do its fair share in this. The CCA reviewed the scale and pace of climate action internationally and concluded that Australia’s 5% target was relatively low. For example, the EU’s target is to reduce emissions by 20% on 1990 levels.
  • Progress to date: history has shown that although the growth in Australian emissions has slowed, growth in the Australian economy has not halted. In essence GDP need not be directly coupled with greenhouse gas emissions. Also, in the 2008-12 period Australia bettered its agreed Kyoto Protocol target by 3%. This means that Australia already has 3% of its emissions reduction effort ‘in the pocket’, so to speak. Increasing a post-2012 target by the same margin would require no additional effort.
  • Updated projections: according to early modelling, Australia’s 5% reduction target called for a total abatement of 754 megatonnes of greenhouse gases by 2020. Under updated figures and assumptions, the CCA concludes that the same volume of abatement now results in an 11% reduction. This is important because merely by accepting the premise of the initial emissions reduction effort, the government could now pledge a target of 11% rather than 5%. This is without taking into account the 3% windfall gain mentioned in the previous point.
Interaction with legislation
According to the legislation that supports the carbon price mechanism:
(1) The Minister must take all reasonable steps to ensure that a set of regulations that:
(a) declares the carbon pollution cap, and the carbon pollution cap number, for the flexible charge year beginning on 1 July 2015; and
b) declares the carbon pollution cap, and the carbon pollution cap number, for each of the next 4 flexible charge years;
is tabled in each House of the Parliament under section 38 of the Legislative Instruments Act 2003 not later than 31 May 2014.
To this end, the CCA has provided a table of annual pollution caps that would satisfy the targets outlined above.

Annual pollution caps
(in megatonnes of greenhouse gases)
15% target
25% target

In proposing these caps, the CCA suggests including emissions abatement from international projects (as long as the abatement can be demonstrated to be genuine).

Should the Minister fail to introduce regulations by 31 May 2014, default caps apply. Market research group Reputex estimates that the default cap for 2015-16 might be around 300 megatonnes.

Implications for the future
The CCA has released this draft for consultation. Submissions will be accepted until 29 November 2013. The CCA then plans to release its final review by 28 February 2014. However, the newly-elected Coalition government has vowed to repeal both the carbon price mechanism and legislation supporting the CCA. On 15 October 2013, the government released eight exposure drafts of legislation to carry out these repeal actions. The final date for submissions to the exposure drafts is 4 November 2013. This would allow the Minister to introduce the Bills into Parliament on 12 November 2013.