Climate change

Dr Emily Hanna, Kate Loynes and Sophie Power
Science, Technology, Environment and Resources

Key issues
Changes to the climate are continuing and intensifying in Australia, with effects on many sectors including tourism, agriculture and biodiversity.
Australia has committed to an emission reduction target of 26–28% below 2005 levels by 2030. However, parties to the Paris Agreement have been asked to submit a revised, more ambitious reduction target by 2020.
The Government has announced its Climate Solution Package, the main policy of which is a rebadged version of the Emissions Reduction Fund.

Climate change risk and related policy continued to get attention during the 45th parliament. Numerous emissions reductions policies were discussed, including the abandoned legislated emissions guarantee in the energy sector as part of the National Energy Guarantee. The Senate Foreign Affairs, Defence and Trade References Committee held an inquiry into Implications of climate change for Australia's national security. The Department of Defence included climate change as a factor that could affect Australia’s security through instability in our region in its 2016 Defence White Paper. The Department of Agriculture continues to recognise that climate change is a challenge ‘for all sectors of the Australian economy but particularly for those sectors dependent on natural resources, like agriculture, forestry and fisheries’. The RBA deputy governor warned that climate change poses a risk to Australia’s financial stability while ASIC released a report with recommendations relating to listed companies’ disclosure and consideration of climate risk.

Climate change effects

In Australia, there has been an average warming in the climate of just over one degree Celsius since 1910. Eight of the hottest ten years recorded have occurred since 2005 and extreme heat events are becoming more frequent. Although weather extremes have always occurred, the number of extreme periods and new heat and drought records are increasing with climate change.

The global sea level has risen more than 20 cm, on average, since 1880. Since 1993, sea levels around the north, northwest and southeast of Australia have risen at a greater rate than the global average, while rates of sea level rise around the south and northeast have been approximately the same as or slightly below the global average.

Some low-lying Pacific Nations are suffering from rising sea levels and erosion, as are inhabitants of some Torres Strait Islands. In May 2019, it was reported both nationally and internationally that a group of Torres Strait Islanders was lodging a complaint with the United Nations Human Rights Committee about climate inaction by the Australian Government. The lead lawyer for the case stated ‘the predicted future impacts of climate change …, including the total submergence of ancestral homelands, is a sufficiently severe impact as to constitute a violation of the rights to culture, family and life’.

Experts have suggested that Australia is one of the world’s most vulnerable developed countries in terms of climate change. One reason for this is the increased risk of bushfires (through more days where there is extreme fire weather and a longer fire weather season). Climate change also brings implications for the insurance industry. These include possible ‘large, unanticipated payouts because of climate change-related property damage and business losses’. These events also lead to costs for individuals and communities as well as disaster recovery costs for government.

Agriculture

While moderate warming and increased carbon dioxide levels can help some plants grow, changes in the amount and timing of rainfall, heatwaves, droughts, flooding and storms/cyclones can have a less desirable effect on crops.

Australia’s rainfall has always been highly variable. However, some long-term trends have recently changed. Rainfall across southeastern and southwestern Australia has declined in recent decades during April to October, an important time for rain agriculturally, while northern Australia rainfall has increased, especially in the wet season in the northwest. Heavy rain periods have also become responsible for a larger percentage of annual rain in recent decades. The Australian Bureau of Agricultural and Resource Economics and Sciences recently reported that climate change has had a ‘significant negative effect on the productivity of Australian cropping farms, particularly in south-western Australia and south-eastern Australia’, with similar patterns seen in the wheat yield. Although the overall average effect was negative, some regions (high rainfall coastal areas in southern Australia as well as parts of Queensland and northern NSW) had similar or slightly improved total factor productivity since 2000–01. Research has also found that the Australian ‘cropping belt’ (the area appropriate for growing broadacre crops, such as cereals) appears to be moving south.

Viticulture is particularly sensitive to temperature change. Vineyards on the Australian mainland are already reporting effects from climate change, including earlier ripening. As a consequence, mainland winemakers are reportedly buying vineyards in Tasmania to prepare for the future. To help prepare for climate change in natural resource management (NRM), including agriculture, the Government funded ‘the development of regional climate change information, national climate impacts and adaptation information, and guidance on integrating the information into land-use planning tailored for NRM planners’, with the final evaluation report delivered in October 2016. State governments, including Queensland, have also released adaptation plans for sectors including agriculture.

Biodiversity

The UN-convened Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) reported in May 2019 that human actions are threatening approximately one million species with extinction. The IPBES found, in decreasing order of impact, that changes in land and sea use, direct exploitation of the species and climate change were the top three direct drivers of global changes in nature. These factors do not just work individually—they interact to result in an impact on the species greater than the addition of the individual risk drivers, further increasing their extinction risk.

Effects driven by climate change, including changes in species distribution, are recorded as accelerating. These changes are affecting many areas on which humans are reliant for their survival, including for agriculture, aquaculture and fisheries. Loss of wild biodiversity is not just important due its intrinsic value—wild relatives of domesticated species provide genetic variety that could help against future climate change impacts in agroecosystems.

In Australia, the Bramble Cay melomys (Melomys rubicola) was a type of native rat which lived on Bramble Cay in the Torres Strait. It was listed as extinct by the Government under the EPBC Act in 2019, and is believed to be the first mammal species globally driven to extinction specifically by anthropogenic climate change.

The Great Barrier Reef and tropical reefs

More than a decade of modelling and scientific work has been predicting increased problems for tropical coral reefs under climate change. In addition to increased water temperatures, marine species need to cope with increasing acidification from carbon dioxide (the increasing acidity can slow growth and calcification of corals, weakening their skeletons) and lower levels of oxygen in the water (due to warming). Cyclones and severe storms can also damage reefs.

Climate change is already causing bleaching, mass mortality and loss of diversity in coral reefs, with global bleaching events occurring more often. ‘As the water warms … most corals struggle to survive, and can ultimately die if the thermal stress is too severe or prolonged’.

Earlier predictions of declining coral abundance, based on scientific modelling, have now been borne out. In the Great Barrier Reef, in the summers of 2016–17, ‘predictions of back-to-back bleaching events … became the reality’. Even if global warming is limited to 1.5 °C, the Intergovernmental Panel on Climate Change (IPCC) says ‘multiple lines of evidence indicate that the majority (70–90%) of warm water (tropical) coral reefs that exist today will disappear’. Under two degrees of warming, it appears likely that 99% of corals globally will be lost. It is not just climate change threatening the Great Barrier Reef; crown-of-thorn starfish outbreaks, coastal land-use change and land-based run-off are also key risks.

A lot of Australia’s tourism is based on natural tourist attractions—the top five of which (beaches, wildlife, the Great Barrier Reef, wilderness and national parks) are all affected by climate change in various ways. In 2017–18, the tourism industry was responsible for 5.2% of total employed persons. In the same year, the direct value of tourism was equal to 3.1% of Australia’s GDP. The Great Barrier Reef is estimated to support 64,000 full-time jobs and bring $6.4 billion to Australia’s economy each year. The Reef is an iconic tourist attraction that attracts tourists not just to Queensland but to all of Australia. Given that, damage to the reef will affect operators in and adjacent to the Reef as well as Australia’s tourism industry up to the national level.

The 2018 review of the Australian and Queensland Governments’ Reef 2050 Long-Term Sustainability Plan had a ‘stronger focus on climate change as a key pressure’ than the original 2015 version. The 2018 version ‘cites linkages to international efforts and domestic plans and strategies to mitigate and adapt to climate change, such as the Paris Agreement and the Queensland Climate Transition Strategy’. The Queensland Climate Adaptation Strategy also includes a tourism sector plan that discusses expected changes to climate, effect on tourism and potential adaptation and mitigation.

International policy

Australia has been a participant in international climate change negotiations since the 1980s. It is a party to both the almost-completed Kyoto Protocol and the new Paris Agreement and has committed to international agreements on climate change since 1992.

The Paris Agreement

The Paris Agreement, which came into force in 2016, is the successor to the Kyoto Protocol, which will cease in 2020. The Paris Agreement aims to keep global temperature rise to below 2°C, and to ‘pursue efforts’ to limit the global temperature increase to 1.5°C. In order to achieve this, the aim is to peak global greenhouse gas emissions ‘as soon as possible’. Under the Agreement, parties are required to submit climate plans, known as Nationally Determined Contributions (NDCs).

Australia’s NDC outlines an economy-wide emissions reduction target of 26–28% below 2005 levels by 2030. The target is ‘to be developed into an emissions budget covering the period 2021–2030’. Comparisons of NDCs are complicated for a number of reasons, including the fact that parties use different baseline years. Some experts consider Australia’s 2030 target less ambitious than that of most developed nations. For example, other NDCs include:

NDCs are not static; parties to the Paris Agreement are requested to submit new or updated NDCs by 2020, and then every five years. Each new or updated NDC should represent a progression on the previous and ‘reflect the highest possible ambition’. Parties must also report regularly on their emissions and on their implementation efforts.

Many of the detailed rules for reporting and reviewing progress towards targets under the Paris Agreement were agreed at the last international climate meeting at Katowice in 2018. However, a key unresolved issue was how any international carbon credit market will operate, which remains contentious. This will be discussed at the next conference of the parties in Chile in December 2019. The Paris ‘rulebook’ does not explicitly address the use of ‘overachievement credits’ that countries accumulated during the Kyoto Protocol. The use of these ‘Kyoto credits’ to meet Australia’s 2030 Paris Agreement target has been a point of debate. Critics suggest that if Australia uses these credits towards its 2030 target, its current abatement task would be approximately halved without greatly reducing Australia’s actual emissions.

In May 2019, the UN Secretary-General stated that the world is ‘not on track’ to limit global warming to 1.5°C. The recent IPCC report, Global Warming of 1.5°C, found that climate-related risks, such as heat waves, drought and floods, were higher and more widespread in a +2°C world compared to a +1.5°C world. Long-lasting or irreversible risks, like ecosystem destruction, were more likely in a +2°C world. The UN will host a Climate Action Summit in September 2019 to ‘boost ambition and accelerate actions to implement the Paris Agreement’.

Growing international action

Mitigating climate change has become a cross-cutting issue for groups around the world. Calls for action have come from such disparate groups as the World Bank’s Coalition of Finance Ministers for Climate Action, the Catholic Pope and hundreds of thousands of protesting school children. Public pressure to act has been driven in part by the Paris Agreement’s report Global Warming of 1.5°C, which stated that to limit global warming to 1.5°C the world must reach net zero emissions by around 2050.

Last year, climate change was announced as one of the four priorities for the 2019 Asia-Pacific Economic Cooperation (APEC) forum. Many other countries are taking long-term action on climate change, for example:

Australia’s domestic policies

The country’s federal domestic emission reduction policies are based on implementing Australia’s Paris Agreement target of 26–28% below 2005 levels by 2030. Australia’s NDC is ‘absolute economy-wide’, covering all emissions from the energy, industrial processes and product use, agriculture, land-use, land-use change and forestry and waste sectors. The target is also described as ‘unconditional’, with the higher 28% reduction to come into effect ‘should circumstances allow, taking into account opportunities to reduce emissions and factors such as the costs of technology’.

In the Government’s latest emissions projections, Australia’s ‘abatement task’ was predicted to be 695 million tonnes of carbon dioxide equivalent (CO2-e) over the period 2021 to 2030 to meet the 26% reduction target (excluding the use of ‘overachievement’ credits). Emissions in a number of sectors are increasing, including the gas industry. Increases from agriculture are predicted over the next decade.

Since 2014, Australia’s primary emission reduction policy has been the Emissions Reduction Fund (ERF) and its safeguard mechanism. The ERF offered $2.55 billion to carbon abatement projects in eligible activities, such as agriculture, fugitive gas emissions, forestry and waste management. Projects are funded through a reverse auction system, with the aim of purchasing emissions abatement at the lowest cost.

The goal of the ERF’s safeguard mechanism is to ensure that emissions reductions purchased through the ERF are not displaced by increases in emissions elsewhere in the economy. The safeguard mechanism covers facilities where the total direct annual greenhouse gas emissions exceed 100,000 tonnes. The safeguard mechanism mostly affects mining, oil and gas extractors, manufacturers, electricity generators and the waste industry. (The electricity sector is treated differently, having a sectoral baseline for the relevant grid-connected generators.) The safeguard mechanism covers about half of Australia’s emissions.

As of April 2019, the ERF had contracted 193 million tonnes of carbon abatement. Questions have been raised about the efficacy of the ERF. Since it started, the amount of abatement purchased at each reverse auction has declined. The ERF has been criticised for funding small-scale emissions abatement that would likely already occur, while allowing large facilities to increase emissions via the safeguard mechanism. The administrative complexity of the scheme has also been noted as a factor deterring some companies from participating.

In February 2019, the Australian government rebadged the Emissions Reduction Fund as the Climate Solutions Fund, as part of the recently announced Climate Solutions Package. The Fund offers $2 billion over 15 years for carbon abatement programs using the same process as the ERF. It is expected to deliver a further 100 million tonnes of greenhouse gas abatement.

The safeguard mechanism remains in place but was amended in March 2019. Among other changes, the amendments simplify the process for allowing facilities to increase emissions in line with production. Reputex, an independent energy market modeller, stated in April 2019 that:

With no hard cap on emissions, modelling indicates that the flexible design of safeguard mechanism has led to large-scale increases in industrial emissions – particularly from the Oil & Gas, Mining and Transport sectors. In cumulative terms, this growth is projected to be greater than the sum of abatement purchased by the ERF – resulting in a net increase in emissions under the government’s climate policy ...

The Australian Government has other programs that support emissions reductions, such as the Renewable Energy Target (which is likely to be met soon). The Government relies on legislated state renewable energy targets in the ACT and Victoria for its projected greenhouse gas emissions to 2030. The Clean Energy Finance Corporation (CEFC), which operates as a ‘green bank’, is continuing to invest Government money in clean energy projects. As of February 2019, it had ‘invested over $6.4 billion to more than 110 projects [worth] … more than $21 billion’.

The other policies under the Climate Solutions Package, and their expected greenhouse gas abatements by 2030, are:

  • energy efficiency measures, such as for buildings, are expected to provide 63 million tonnes CO2-e emissions reduction
  • Battery of the Nation (an initiative to provide extra pumped hydro storage in Tasmania) and its associated electricity interconnector to the mainlandĀ­—25 million tonnes CO2-e
  • an electric vehicles strategy to smooth the transition to different vehicle technology— up to 10 million tonnes CO2-e
  • a refrigeration and air conditioning equipment information program to educate owners of the benefits of regular maintenance—35 million tonnes CO2-e
  •  ‘technology changes, improved economic efficiency and other sources of abatement’—100 million tonnes CO2-e.

Questions have been raised about the lack of detail behind the expected emissions reduction from the unexplained ‘technology changes…and other sources of abatement’ as well as the current lack of an electric vehicles policy.

 Climate solutions package

Source: Department of the Environment and Energy, Climate Solutions Package, 2019, p. 8.

As shown in the figure above, the Government maintains that the described measures, in conjunction with the use of Kyoto carryover credits (included under the 2018 projections bar in the figure) and Snowy 2.0, will allow Australia to meet its Paris Agreement commitment of 26% emissions reduction on 2005 levels by 2030.

Further reading

Intergovernmental Panel on Climate Change, Summary for Policymakers. In: Global Warming of 1.5°C,World Meteorological Organization, Geneva, 2019.

S Power, Paris climate agreement: a quick guide, Parliamentary Library, 10 November 2017.

 

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