Australia Emissions Reduction Policy

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Australia: The Emissions Reduction Fund

There is still debate in Australia over how much the government should be involved in developing environmental policy.

Under PM Julia Gillard, a Carbon Tax was introduced. The Carbon Tax was a mandatory tax applied to facilities that emit more than 25,000 MT CO2e scope I emissions annually with some industries such as agriculture being exempt. Gillard and her Labor party have argued that the tax was successful in reducing emissions and the Investor Group on Climate Change claims that companies subject to the tax saw a 7% reduction in emissions. However it was repealed by the succeeding PM, Tony Abbot, and replaced with the Emissions Reduction Fund which is currently in place.

“The Australian Government’s action to reduce greenhouse gas emissions includes the $2.55 billion Emissions Reduction Fund (ERF). The ERF provides incentives for businesses, farmers and land owners to reduce emissions through a range of activities covering Australia’s economy.”
Australian Department of the Environment, Climate Change Division

The Emissions Reduction Fund is a voluntary program in which companies can receive credits from the fund for lowering their emissions. These credits can then be sold back to the government or to other businesses. Companies participate in the program by proposing and implementing carbon reduction measures, which they can then be compensated for through the ERF. Companies can also use carbon credits from the fund’s safeguard mechanism to offset emissions below a baseline determined by the Clean Energy Regulator.

“Projects include storing carbon in native vegetation, increasing soil carbon stocks, reducing coal mine waste gas, waste management, and increasing energy efficiency through activities such as public lighting upgrades or building upgrades. The ERF also includes a safeguard mechanism, which came into effect on 1 July 2016 and limits the growth of emissions for Australia’s top emitting companies.”
Australian Department of the Environment, Climate Change Division

Both the Carbon Tax and Emissions Reduction Fund take a market approach to emission reduction by offering economic incentives-in the form of reward or punishment to lower emissions rather than mandating a set amount of emission reduction.

There have also been supporters of both plans who claim it has had success in reducing Australian GHG emissions, but neither has had a major impact.

While overall emissions and energy demand did show a decrease between 2012 and 2014, it appears to have picked up again, and some estimates project demand to grow by 5% overall by 2018.

Recently, 154 of Australia’s top climate scientists wrote an open letter to the sitting PM, Malcolm Turnbell, urging the government to take action on climate change and develop more effective policies.

At the UN General Assembly in New York, current PM Malcolm Turnbull showed an uncharacteristically moderate side when complimenting the UN’s work and emphasizing that more needs to be done to address current issues, citing ISIS and tension in the Korean peninsula as some of the most serious concerns. Turnbell said, “We need compassion – to assist those less fortunate than ourselves; and to help rebuild communities that have been devastated by war or natural disasters.”

In regards to the Paris Agreement, Turnbell said Australia will make its “best endeavours to ratify” the agreement by the end of 2016, but a specific date for ratification has not been announced.

Longer excerpt from Turnbell’s UN speech:

“The Paris Agreement last year was a shining example of global cooperation for the common good. In a historic display of commitment, over 170 nations signed the Paris Agreement in New York in April.  Even more have submitted plans for action. And Australia will play its part.

We are committed to ratifying the Paris Agreement, and we are confident that we will meet our ambitious 2030 target which will have the consequences of us cutting our per capita emissions by 52 per cent – just as we will meet and beat our Kyoto II commitments.

Australia has also increased the profile of climate change in our overseas aid program – including through our $200 million commitment to the Green Climate Fund—because we know climate change amplifies many development challenges.

We also know that our commitment to action creates new opportunities for innovation and growth, which means more jobs.

We are combining reduction in emissions with strong economic growth – running at 3.3 per cent over the last year, up from 2 per cent a year ago.

Our new Cities Policy too is focused on clean development, enhancing amenity, sustainability and liveability.

And, as the land of droughts and flooding rains, we have learned how to make every drop count and share our experience in water management with other nations, including earlier today here at the High Level Panel on Water.”

Turnbull UN Speech 22-9-2016

Learn More

Additional info on the Emissions Reduction Fund (ERF)

A more detailed look at Australian emission trends can be found here:

Letter from 154 top Australian climate scientists to PM Malcolm Turnbell:


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