Australian Government, Department of Prime Minister and Cabinet; Issues Paper March 2015
Setting Australia’s post-2020 target for greenhouse gas emissions
The Government is to be commended for its stated commitment to the process of developing the new
global climate agreement, the objective presentation of the data and adoption of the international
reductions accounting benchmarks. It has also made clear that its commitment and action will be
framed within what it sees are Australia’s interests.
However, and while the government’s achievements are acknowledged, the current agreed science on
climate change finds that increased efforts are required if global warming is to be kept below 2 degrees1.
The performance benchmarks set by the Kyoto Protocol in 1997 have proven to be insufficient to
contain the growth in global warming to within the limits deemed acceptable.
In respect of the issues to be considered in setting Australia’s post 2020 goals, absent from the Paper is
discussion of the global context, of Australia as an active and constructive participant in global affairs
and decision making, and the potential commercial and social consequences arising for Australia and
Australian industry from climate change impacts occurring elsewhere. It also does not discuss the issues
that may arise for future generations of Australians and the market impact.
Oddly, the Paper at para 3 lists four criteria for the new global agreement, that it is strong and effective;
that it addresses carbon leakage; delivers environmental benefit; and is in Australia’s national interest. It
does not refer to the objectives of the Convention (UN Framework Convention on Climate Change), the
Kyoto Protocol, or the commitments made at the Rio + 20 Summit. Neither does it refer to the other
major global commitments to be made this year and are inter-related, the UN Financing Development
commitment to be finalized in June in Addis Ababa, and the UN Sustainable Development Goals to be
finalized in September. They all have an economy wide consequence and the Paper would have been
enhanced by sharing the government’s considerations on these matters.
In responding to the government’s request, it is considered necessary to also comment about Australia
as a responsible member of the international community, and prepared to accept the obligations that
brings, and the longer term impacts of climate change on the economy and society in Australia, and
their ability to manage further emissions reductions
Literature Review:
The literature relevant to the issue of emission reduction targets in the Australian context is quite
narrow. Of the Australian industry associations, the AIG and BCA do not have climate change policies,
nor do they participate in any public dialogue or publish any projections. The BCA has an energy policy
which also covers for its environmental policy. Regarding targets for emission reduction, the OECD,
UNFCCC, CSIRO do not offer any guidance. The WWF, Climate Institute and Oxfam have published
1
IPCC Fifth Assessment Report, 2014
1
targets for Australia which are generally consistent with but on the outer fringe of the recommendations
from the Governments Climate Change Authority published in its report Reducing Australia’s
Greenhouse Gas Emissions— Targets and Progress Review Final Report, February 20142.
Australia as a responsible member of the international community, and prepared to accept the
obligations that brings:
The Issues Paper acknowledges the global nature of the climate problem, the need for a global
agreement and that to date Australia has played a constructive role. Despite that, Australia’s effort is at
best not well understood. The criticisms by other governments reported in domestic and international
media reflect poorly on the Australian government, and also reflect poorly on Australian business.
Consider the criticisms directed to the Australian government at the G20; the criticism of the Australian
delegations interventions at the UNFCCC COP 20 December 2014 which were considered
unconstructive; and the awarding of a number of “Fossil Awards” to the Australian Government by the
2014 COP daily Newssheet ECO.
The Australian Government Climate Change Authority in its Final Report of February 20143 gave three
reasons to support its recommendations for increasing Australian emission reduction targets. Firstly,
that 5% reduction target was inconsistent with the 2% global warming limit and left an improbable task
for future Australian generations to make a fair contribution to the global effort; secondly, the scale and
pace of global action suggested Australia should move beyond 5%, and a level of 15% was more in line
with countries of similar development such as the UK, US, and Norway; and thirdly, that costs were
manageable at 15%, estimated at 0.02% of GDP.
The UK, France and Germany, as examples of developed economies have demonstrated that it is
possible to reduce emissions by changing behaviour, and without negatively impacting economic
performance4.
Australia as a credible and respected participant in global affairs is important to industry. Australia’s
commitment to the global climate change effort should be consistent with the effort of its peers, but
within the limits necessary to avoid carbon leakage.
2
Australian Govt Climate Change Authority 2014 “Reducing Australia’s Greenhouse Gas Emissions— Targets and
Progress Review, Final Report February 2014”
3
Australian Govt Climate Change Authority 2014 “Reducing Australia’s Greenhouse Gas Emissions— Targets and
Progress Review, Final Report February 2014”
4
Syndex. (2011). Initiatives involving social partners in Europe on climate change policies and employment:
Summary report for the conference on 1 and 2 March 2011. Brussels: European Commission.
2
The longer term impacts of climate change on the economy and society in Australia, and their ability
to manage further emissions reductions:
The current science on climate change finds that increased efforts are required if global warming is to be
kept below 2 degrees5. The performance benchmarks set by the Kyoto Protocol in 1997 have proven to
be insufficient to contain the growth in global warming to within the limits deemed acceptable. As is
noted by the government, climate change poses major risks for the Australian people, the economy and
the environment and it is also accepted that we will better adapt if global warming is kept below 2
degrees6, and more will be increasingly costly7. Accordingly, and while Australia has met its obligations
under Kyoto, Australia stands to benefit from stronger global action, and it is suggested must be
prepared to do its part.
The CSIRO has projected that naturally occurring fluctuations in rainfall patterns will dominate trends
due to climate change until 2030, after which the trends associated with climate change will begin to
emerge. By 2090, winter rainfall is expected to decrease in eastern Australia, and in Southern and
Eastern Australia are projected to experience harsher fire weather, while tropical cyclones may occur
less often, but become more intense8. Taking this into account, it is considered appropriate action would
be to put in place targets that spread the emission reduction obligation reasonably over time, noting
that weaker action now imposes a greater emission reduction task on future generations. Using market
based and other measures, the transition can be managed and steady, allowing Australian business to
remain competitive and the actions coordinated with trade and other objectives, and international
emissions can provide a cost effective complement to domestic actions
The Direct Action Approach:
The Australian Government proposes to reach its emissions reduction target through its Direct Action
Plan (the Plan) to efficiently and effectively source low cost emissions reductions. This will be done
primarily through the Emissions Reduction Fund (ERF). The ERF is the centrepiece of the Government’s
climate action policy. It will work with other incentives under the Direct Action Plan to help meet
Australia’s target of reducing emissions by five per cent below 2000 levels by 20209.
The Direct Action Plan relies essentially on market mechanisms to engage industry in the development
and delivery of the emission reductions strategies. This an approach preferred by industry and, as
reported by the government is on track to achieve the target. However, revised assessment of the
5
IPCC Fifth Assessment Report, 2014
; UNFCCC 2014
7
Australian Government Climate Change Authority 2014 “Reducing Australia’s Greenhouse Gas Emissions—
Targets and Progress Review, Final Report February 2014”
8 CSIRO Jan 2015: New climate change projections for Australia
9
www.environment.gov.au/clean-air
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targets would require a review of the Plan. The recommendations below suggest consideration of an
increase in the range to 15%.
The government climate change and energy strategy, of which Direct Action Pan is a key
implementation component, must be developed in an economy wide framework and so must reflect the
economic, environmental and social impacts. From an economic perspective, it must deliver open and
competitive markets; address the metrics, accounting and reporting requirements, and the finance and
investment requirements. The environmental considerations involve resource efficiency and decoupling
of growth from the environment. Socially, awareness, education and skills, and employment must be
addressed.10 As it stands, the Plan is not an economy wide framework, rather it relies on market forces,
and a range of discrete programmes.
Industry seeks the opportunity to discuss with the government a climate change and energy policy
framework that:
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Is built on the principles above
Is staged to coincide with emission reduction targets of 2020, 2030 and 2050
Takes account of the international norms to which Australian industry will be required to
conform, and remain competitive
Includes strategic partnerships with industry in its governance structure
Develops industry sector targets be in consultation with industry
Benchmarks technical, commercial and other regulation affecting industry and its competitive
position to international standards
Industry would agree that that the Department of Foreign Affairs and Trade should have responsibility
for international climate change agreements. To that extent, engagement with industry, and policy
coherence across those agencies responsible for climate, energy and the environment must be a priority
for the government, and core in its governance arrangements.
Other issues to be considered:
Industry is concerned to ensure that some features of the current international climate agreements are
not carried forward to the next generation agreements. To that end, it is recommended the government
note:
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10
Part of the accounting requirements under the Kyoto Protocol include the biological process of
plants, animals and landscapes. This disadvantages Australia. There is a need under a new
agreement to separate the accounting for natural biological processes from those of industrial
processes. The former also impacts on global food supply and so the new agreement also needs
to ensure that it doesn't exacerbate food insecurity.
International Chamber of Commerce green economy roadmap 2015
4

Trade unions have successfully advocated the inclusion of decent work and a just transition in
the formal texts (for example. UNFCCC 2010; UNCSD 2012). Industry is concerned that current
international climate change commitments provide for the protection of workers’ rights through
the requirements for decent work and a just transition. A just transition is defined as the
recognition of workers’ rights, decent work, social protection and social dialogue11. The four
tenets of decent work as articulated by the International Labour Organization (ILO) are creating
good jobs, guaranteeing respect of workers and recognition of their rights, extending social
protection and promoting social dialogue12. These tenets are called the decent work concept.
They are also being addressed by specialised international agencies and in many countries are
already principles of national labour law and practice, creating a potential jurisdictional conflict,
and an encumbrance on the already difficult climate agreement.
Recommendations regarding the post 2020 emission reduction targets, and its international efforts to
address climate change:
1. Industry would support the encouragement of business to find the solutions rather than via
legislative approaches and seeks the opportunity to discuss with the government a climate
change and energy policy framework. Industry will find a way if it is given commercial incentives
to do so. But not subsidies.
2. Australian industry requires government to implement policies that deliver stability in policy and
regulation over the short to medium term. It also requires a seamless interface with
international markets, and the removal of artificial impediments to the efficient conduct of
business in the supply chain. That framework is facilitated by mutual respect between Australia
and its trading partners, business regulation that is consistent with international norms, and
where interventions are based on market mechanisms.
3. The government advocate against the perpetuation into the new agreement, the issues that
mitigate against the achievement of the ecological objective, and as mentioned above.
4. It is noted that industry has previously advocated in pre-budget submissions that climate change
financing efforts for developing countries should be part of the overall aid budget and not
further encouragement for rent seeking from developing countries.
5. In the context of the international climate agreement, industry organisations are not in a
position at this time to advocate for and defend the case for specific targets. We reiterate that
the view that Australia’s commitment to the global climate change effort should be consistent
with the effort of its peers, but within the limits necessary to avoid carbon leakage. We note the
targets recommended by the Climate Change Authority in its 2014 report and, adjusted to
reflect the post 2020 timeline suggest they may provide a suitable basis for further discussion on
this matter. The Authority’s recommended targets were:
11
12
Worldwatch Institute 2008
ILO 2011
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The target to 2020 be 15 per cent below 2000 levels – using Australia’s carryover under the
Kyoto Protocol to raise the 2020 target by 4 percentage points, giving an effective target of
19 per cent, and an emissions budget of 4,193 Mt CO2-e for the period 2013–202013
Beyond 2020, guidance for longer term planning and investment, subject to frequent review
in light of new information, a trajectory range for emissions reductions of between 40 and
60 per cent below 2000 levels by 2030, a national emissions budget for 2013–2050 of
10,100 Mt CO2-e, based on what might be considered Australia’s fair share of a global
emissions budget.
Peter J Glynn PhD
Melbourne, April 2015
13
In 2012, Australia’s greenhouse gas emissions totaled 600 Mt CO2 -e, 2.5 per cent above 2000 levels. In the
absence of a carbon price or other effective policies, emissions are projected to grow to 685 Mt CO2 -e in 2020,
17 per cent above 2000 levels (Australian Government Climate Change Authority 2014 “Reducing Australia’s
Greenhouse Gas Emissions— Targets and Progress Review, Final Report February 2014”)
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