This report is in the form of memos from Climate Scorecard Country Managers to Patricia Espinosa, Executive Secretary of the United Nations Framework to Combat Climate Change (UNFCCC). Below is a description of the progress the country has made made in mitigating greenhouse gas emissions since the Paris Agreement was signed in 2015 and the challenges they still face in order to comply with the IPCC goal of reducing emissions by 50% by 2030.
To: Patricia Espinosa
Subject: Climate Scorecard Progress Report for Australia
From: Riya Shukla
Climate Scorecard Australia Country Manager
I serve as Climate Scorecard Country Manager for Australia and would like to offer you the following climate mitigation progress report from the perspective of my organization.
Since its initial 2015 pledge to the Paris Agreement Australia has made insufficient progress in meeting the goal of reducing emissions by 50% by 2030. However, on the positive side Australia has implemented the several strategies, described below, to reduce its emissions.
The Emissions Reduction Fund and its Safeguard Mechanism
The Emissions Reduction Fund (ERF) is a voluntary scheme aimed at encouraging various organizations and individuals to adopt new methods and technologies to reduce emissions.
The scheme offers participants the opportunity to earn Australian carbon credit units (ACCUs) for emissions reductions through a variety of activities. One ACCU unit is awarded for every tonne of carbon dioxide equivalent (tCO2-e) a project prevents or stores. ACCUs can be sold to generate revenue to the government through a carbon abatement contract or to the secondary market.
A wide range of businesses across a broad range of industries are affected, including electricity, mining, oil and gas, manufacturing, transport, construction, and waste management. However, two-thirds of the ERF’s allocated $2.5 billion funding has now been spent. ERF now requires further funding to achieve Paris agreement’s target.
National Energy Productivity Plan (NEPP)
COAG Energy Council released a National Energy Productivity Plan (NEPP) in 2015 to accelerate a 40% increase in Australia’s energy productivity by 2030. Implementation of this plan is a joint venture between the Australian, state and territory governments.
NEPP comprises 34 measures for the energy efficiency of equipment, industry, transport, buildings and energy market reforms. These measures are to support productive consumer choices (by providing more efficient incentives, empowering consumers, and promoting business action) and promoting productive energy services (by driving greater innovation, competitive modern markets and updating consumer protections and standards).
Appropriate metrics are developed and reviewed on annual basis to determine the effectiveness of this plan. For example, one of the measures listed in the NEPP include improved light vehicle efficiency. The Australian Government subsequently implemented fuel consumption labeling standard. A model-specific fuel consumption label displays the fuel consumption of the car in litres/100km and the carbon dioxide emissions in g/km based on a standard test. For electric vehicles, the label shows energy consumption in Watt hours/km. This help consumers assess the relative efficiency of new vehicles and provide an incentive for consumers to consider the purchase of a more efficient vehicle.
The NEPP has also implemented Equipment Energy Efficiency (E3) program which includes energy rating labelling, setting minimum energy performance standards (MEPS) and education and training. In addition to Australian government, state governments and territories, New Zealand is also part of the E3 program under a bilateral agreement with Australia. The energy rating labelling is based on star system. A product with higher stars indicates that it consumes less electricity which ultimately results in lower running costs of an appliance. This supports consumers in making productive choice as it is cost effective and energy efficient. Minimum energy performance standards (MEPS) define the minimum level of energy performance that an appliance must comply before entering market. This drives manufacturers to increase energy efficiency of their products and also guides customers to choose from energy efficient products.
E3 program has saved more than AU$3.7 billion to the Australian economy in terms of energy costs between 2019-2021. This is an estimated 12.2 Mt of carbon emissions avoided, equivalent to taking 3.3 million cars off the road over the same period.
Australian Climate Service Initiative
Australian climate service was established by the Australian Government on 5th May 2021. The service was developed as a result of the recommendations from the Royal Commission on National Arrangements for Natural Disasters. This $210 million investment will provide local communities with advanced science, latest information and expert advice from the Bureau of Meteorology, Geoscience Australia, Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Australian Bureau of Statistics.
Bureau of Meteorology will provide climate advice, weather information, reliable and trusted systems. The Australian Bureau of Statistics will provide accurate social and economic information as per the geographical locations. Geoscience Australia will provide information regarding national geospatial and location services, hazard and exposure. Commonwealth Scientific and Industrial Research Organisation (CSIRO) will provide information regarding climate observations and modelling, resilience, adaptation, transformation science and practice. Australian Climate Service will provide this integral data on one platform which makes it easier to identify climate trends, future natural hazard threats, critical gaps, risk analysis and also provide national view of natural hazards.
This is beneficial for Australian Government as it can help in determining which strategies to implement in order to support local communities through each phase of the national disaster continuum (Prevention, Preparedness, Response, Recovery, Relief and Resilience) before the encounter.
Climate Compass is a climate risk management framework created for commonwealth agencies in managing the risks and opportunities which may arise due to changes in climate change policies and programs. It includes three key climate risk management cycles called scan, strategy, and project with a set of instructions for each cycle.
Scan cycle refers to identifying areas of your organization’s policies, assets and programs that will be impacted due to climate change. Strategy cycle refers to planning a strategic approach for the identified higher priority climate risk areas of your responsibility. The project cycle refers to developing and implementing a detailed plan to operationally manage the risks. Climate compass is produced by CSIRO (Commonwealth Scientific and Industrial Research Organisation) and developed for the Australian Government Disaster and Climate Resilience Reference Group.
Australia’s National Hydrogen Strategy
National Hydrogen Strategy’s objective is to create innovative, clean, safe, and competitive hydrogen industry which is beneficial to Australians. The strategy is adopted by all federal, state and territory governments and aims to position the hydrogen industry as a major global player by 2030.
Australia’s National Hydrogen Strategy was released in November 2019 and hydrogen project team was formed in March 2020 by the COAG Council for its successful implementation. This $1.2 billion hydrogen investment is beneficial for Australians as it can create new work opportunities in regional areas leading to economic growth.
The Australian Government has committed over $146 million to hydrogen projects along the supply chain since 2015. Hydrogen can be extracted from natural substances like water, natural gas, coal, and biomass. Australia has an abundance of the natural resources needed to create clean hydrogen. Australia can lead the global shift to hydrogen by providing abundant renewable energy potential at low cost, strengthening trade links with international markets and industrializing commodity production.
Australia’s Long-Term Emissions Reduction Plan
Mr Scott Morrison has recently announced Australia’s long-term emissions reduction plan at a press conference on 26th October 2021. This plan is subject to modification, but it is a step in correct direction. It is suggested that Australia is on track to cut emissions by 30 to 35% by 2030. Australia’s long-term emissions reduction plan (also referred as “whole-of-economy plan”) is technology-driven plan aimed to achieve net zero emissions by 2050 while preserving the existing industries. This plan is based on following 5 core principles which will ensure that Australia’s transition to net zero economy will be effective, fair, equitable, and that no sector of the economy will carry a disproportionate burden:
- Technology not taxes – Rather than taxing existing industries, Australia’s technology-led approach will lower the cost of new and emerging technologies by investing in research, development, and demonstration. There will be no new costs for households or businesses.
- Expand choices, not mandates – The Australian Government will expand the choices available in global market for Australian consumers and international partners. Private sectors will lead technology deployment.
- Drive down the cost of a range of new energy technologies – Australia will prioritise technologies that benefits Australia’s net zero future. Australia’s Technology Investment roadmap will manage portfolio of technologies. New emerging technologies will be monitored in the early stage of development like small modular nuclear reactors.
- Keep energy prices down with affordable and reliable power – Australia will continue to supply energy exports. Currently, without affordable low emissions technologies, Australia’s existing energy exports will continue to be in global demand. This approach includes developing technologies like hydrogen, carbon capture and storage so our economy is prepared if global demand changes. Thus, the country can take advantage of new economic opportunities in a way that also builds on our existing strengths.
- Be accountable for progress – Australia will continue to set efficient and achievable goals to meet Kyoto and Paris Agreement targets. They will also demonstrate transparency and accountability in the emissions reporting and performance.
Australia’s long-term emissions reduction plan will be implemented by 4 strategies which are driving down costs of low emission technologies, enabling deployment at scale, seizing opportunities in new and traditional markets, fostering global collaboration.
In terms of driving down costs of low emission technologies, Australia’s Government is in process of partnering and co-investing with other nations and working with businesses and researchers regarding cost-reduction. Australia’s Technology Investment Roadmap has identified 6 priority technologies which can contribute around half the emissions reductions needed to achieve net zero. These include clean hydrogen, ultra low-cost solar, energy storage, low emissions steel and aluminium, carbon capture and storage, soil carbon. The roadmap also supports the development of other emerging technologies like livestock feed to reduce methane emissions. The Australian Government will invest more than $20 billion in low emissions technologies by 2030, helping to secure over $80 billion in total investment from the private sector and state governments.
In terms of enabling deployment at scale, the Australian Government is implementing cross-cutting measures and incentives to support business in leading technology deployment. They will also build voluntary carbon markets, provide clear and concise information regarding low emission technologies to consumers, invest in building infrastructure such as Snowy EV charging networks and expanded electricity transmission networks, and ensure that correct resources and infrastructure is in place as sectors decarbonise. This approach will be aligned with the states and territories through bilateral agreements, energy market reform and energy efficiency.
The third strategy is for Australia to seize opportunities in new and traditional markets. Australia’s regional industries are the valuable assets which has made Australia the world’s fourth largest energy exporter. Therefore, Australia’s coal and gas export industries will continue through to 2050 to support jobs for regional communities. However, Australia is looking forward to growing low emission new and existing industries for critical minerals and metals, clean hydrogen, low emissions fuels like LNG and uranium, low emissions manufacturing (such as steel), agriculture and innovative clean technologies.
Australia will invest in building our current workforce by providing training to strengthen skills. Australia’s Long-Term Emissions Reduction Plan analysis suggests hydrogen, minerals like lithium, renewable energy could create more than 100,000 new direct jobs by 2050 including Australia’s regions. An Australian hydrogen industry could be worth more than $50 billion in 2050. Expanding production and processing of metals like lithium, nickel, copper, and uranium could together be worth around $85 billion in exports in 2050.
In terms of fostering a global collaboration strategy, Australia has started making progress in establishing new bilateral partnerships with trading and strategic partners. Australia is currently working with Indo-Pacific to establish a high-integrity carbon offset scheme. This scheme will increase private sector investment in low emissions technologies and provide access to an established market for offset credits. The Government has allocated $565.8 million to support international partnerships that help accelerate development of low emissions technologies and advance and support the goals of Australia’s Technology Investment Roadmap. The Government aims to attract at least $3 of funding from partners and other private sources for every $1 it invests. The Government has already announced partnerships with Germany, Japan, Singapore, and the United Kingdom.
Thus, Australia has the resources and plan to achieve net zero emissions by 2050. However, this outcome will depend on our success in reducing the costs of low emissions technologies and accelerating their deployment at scale across all sectors.
However, the following conditions remain in Australia that threaten its ability to make further progress and reach the important goal of reducing emissions by 50% by 2030.
The National Gas Infrastructure Plan (NGIP)
The National Gas Infrastructure Plan (NGIP) was included in the federal government’s October 2020 Budget, which put aside $10.9 million to develop it in early 2021. This Interim Plan addresses the most immediate challenge of energy supply shortfalls and short-term strategies that can be used to overcome these challenges. The Morrison government has confirmed that a federal government-funded gas plant will replace coal power plant in New south Wales. Extracting gas is a highly polluting activity as gas is primarily composed of methane which is up to 84 times more potent than carbon dioxide. Investment in gas infrastructure projects will consequently lead to Australia being more dependent rather than transitioning towards Australia’s renewable future.
No Green Recovery Plan
Due to the current COVID pandemic, the federal government has prioritized income protection for public and businesses while ignoring the substantial potential benefit of a green economic stimulus. As per the Global Recovery Observatory’s statistics, Australia has spent US$130 billion on COVID recovery efforts but less than 2% of this budget has been spent on solutions to reduce emissions. The government has instead backed a gas fired recovery despite recommendations by the International Energy Agency that there can be no new oil and gas fields in a Paris-aligned global pathway.
Australian Coal Industry
Australia has an export-oriented economy and coal is one of the highest exported fossil fuels. Coal exports totaled A$55bn (£29bn; $40bn) in 2020. However, larger portion of profit went to mining companies and only 1% national revenue went directly to Australia.
Australian Bureau of Statistics data suggests that 256,000 highly skilled workers are hired in the mining industry across Australia. Median weekly earnings for mining workers were $2325 in 2020, double the median for all industries ($1150). 84% of mining workers are permanently employed. In terms of climate change management, coal is responsible for 46% of carbon dioxide emissions worldwide. This has seen climate action framed as a choice between jobs and the environment, hampering commitment at the national level.
There are currently over 80 proposed projects for approval including plant upgrades. Australia approved three mine extensions in September 2021. Instead of working on strategies to reduce emissions, Australia is still focused on maximising coal industry. In response to the approvals, Environment Minister Sussan Ley stated that mine itself will contribute approximately 0.00073% of global emissions per annum. This approval secures employment for the mine’s 400 workers and 100 more jobs will be added during the construction.
In my perspective, this seems to be an economic decision. It is high time for Australia to take firm actions to support climate change.
Climate Scorecard is committed to working with other like-minded organizations to support efforts by Australia to make further progress in its effort to reduce emissions by 50% by 2030 and help the Paris Agreement reach its important goals.
Please don’t hesitate to contact Climate Scorecard if you have any questions about this report or need further information.