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Is Australia Failing to Meet the 2030 Paris Agreement Goal?

October 17, 2020
Editor(s): Dahye Koo
Writer(s): Sarah Tu, Matthew William, Neharika Rastogi

Addressing today’s greatest threat, climate change is the fundamental purpose of the Paris Agreement. Accorded in 2015, the Paris Agreement aims to substantially decrease global gas emissions in an effort to limit the global temperature increase to 2 degrees Celsius above the pre-industrial levels. The agreement includes commitments from all major emitting countries, including Australia. However, Australia’s overly ambitious proposition in the global forum may not be feasible. Can Australia reach its goal to reduce 26-28% emission below 2005 levels by 2030?

What Paris Agreement meant for Australia

While Australia has ratified the Agreement and agreed to pursue the goals and respect the obligations referred to above, we have also lodged a specific and initial NDC under Paris. This is to reduce Australia’s economy-wide emissions to 26-28% below 2005 levels by 2030, with this commitment to be further developed into an emissions budget for 2021-30. Australia also intends to develop a long-term emissions strategy by the end of 2020. We would expect to articulate a post-2030 NDC around 2024.

Ironically, Australia’s current initial NDC (Nationally Determined Contributions) is inconsistent with the goals of the Paris Agreement. Australia will be under high pressure to revise our emission target out given its position as the world’s highest capita emitters. Moreover, Australia’s target has been rated insufficient by the Climate Tracker. In order to reach our current goal, Australia has to find a way to reduce industrial carbon pollution as well as to retire coal-fired generators. The Emission Reduction Fund (ERF) is deemed to be the most effective answer to the fossil-fuel problem. However, many argue that the ERF is not a good primary policy to drive down greenhouse emissions. That being said, Australia’s effort to meet its 2030 target is rather futile.

Australia’s position as one of the highest carbon emitters makes it even harder to meet its goal

From devastating bushfires to historic heatwaves, Australia’s climate changes as frequently as you can guess. However, the fact that Australia is one of the worlds’ top most greenhouse gas emitters and currently ranked the worst among the 57 countries, it is time the vibrant and viable Australian economy gets to work to reduce its emissions and contribute to a healthy environment. 

Even though Australia with the Paris climate agreement has promised to reduce its emissions by 26-28% by 2030, but with being the worst greenhouse gas emitter, it would be hard to follow up on the promise when there is lack of plans. Similarly, the same was criticised by the United Nations this year wherein their report stated that Australia is not on track. 

As the 8th highest fossil fuel producers, Australia rather than using it generously has so far failed to acknowledge that when all of the countries are working towards net zero emissions of matching carbon emission with removal, Australia rather is doubling the emission and doing nothing to reduce or remove the same. 

Other than this, with being the largest exporter of coal, iron ore, uranium, and natural gas, the mining is at par and so are the industrial emissions. So to reduce its emissions and be on track with the 2030 target of reducing it by 28%, the coal industry has to be phased out to limit global warming, but for that, the government has to understand how important global warming is and what effects it has. 

Denying global warming will not do any benefit, and a proper action plan has to be generated to make sure the climate remains in check. 

Are we doing the best we can to reach the goal?

There has been a limited effort in adapting or adding climate policies to reduce emissions compared to the urgent revival of Australia’s declining economy. The most prominent policy is known as the Emissions Reduction Fund (ERF). This scheme is administered by the Clean Energy Regulator where businesses, landlords, and communities can obtain Australian Carbon Credit Units (ACCU’s) for a set unit amount of emissions reduced. Through an auctioning process, the government purchases these greenhouse abatements quantified with ACCU’s. This scheme ultimately thrives on financially incentivised polluters and carbon farming businesses. However, there has been criticism on the feasibility and efficiency of the method. The fund essentially is fuelled on taxpayers’ money which consists of $2.55 billion allocated by the Abbott government in 2014, and an additional $2 billion by the Morrison government, renamed as the Climate Solutions Fund. Despite the large investment, the total avoided emissions collected by the Clean Energy Regulator depicts a flat line. The flat line mainly contributes to revoked contracts from companies unable to reduce the promised amount of carbon emission. Although the contracts are only paid after emission reductions occur, overall, the process to reduce emission is stagnant and slow. Moreover, the “average price paid per tonne of avoided emissions” has risen which heavily impacts on the going concern of the fund’s account balance and likely to be exhausted before Australia’s NDCs to the Paris Agreement by 2030.

The Australian government is also vested in energy productivity as a way of reaching its 2030 emissions target, namely relying on the National Energy Productivity Plan (NEPP). It aims to reduce pollution through fragments of savings from productive energy services and encourage more productive consumer choices such as vehicle efficiency and efficient home appliances. In May 2020 the government released its plan to follow the King Review which highlights the importance of carbon capture utilisation and storage. Hence, the government intends to amend ERF legislation and strengthen technology-driven industries to reduce carbon emissions whilst creating more jobs.

The right policies that are being constructed by the Australian government today will set the trajectory of the Australian climate position. Therefore, creating effective policies is pivotal in realising our 2030 goal.

Bibliography

https://climateactiontracker.org/countries/australia/current-policy-projections/

https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook45p/EmissionsReduction

https://blog.aigroup.com.au/what-did-australia-commit-to-in-the-paris-agreement/

https://www.theguardian.com/australia-news/2015/dec/12/what-does-paris-climate-agreement-mean-for-australia

https://www.nrdc.org/stories/paris-climate-agreement-everything-you-need-know

The CAINZ Digest is published by CAINZ, a student society affiliated with the Faculty of Business at the University of Melbourne. Opinions published are not necessarily those of the publishers, printers or editors. CAINZ, our Partners and the University of Melbourne do not accept any responsibility for the accuracy of information contained in the publication.

Meet our authors:

Dahye Koo
Editor
Sarah Tu
Writer

Hello! My name is Sarah Tu and I am a third year B.Com student majoring in Finance and Management. I am a bright, inquisitive and straightforward Melbourne girl, always looking for opportunities to learn, communicate and share.

Matthew William
Writer
Neharika Rastogi
Writer

Neharika is a MoM accounts and finance student with a flair for writing, numbers, and research all coming under one roof. She is interested in global trends, and believes in joining the qualitative, quantitative aspects with her researching skills.