Addressing the South Australian Liberal Party annual meeting yesterday, Tony Abbott repeated his claim that the emissions reduction target – 26-28 per cent below 2005 levels by 2030 – was the same as the US.
One would expect that some form of research and modelling had gone into arriving at this figure but that is not the case. What Abbott has done is just use the exact same figure of 26-28%, as pledged by the US, without any context whatsoever.
For starters, the US goal is to achieve that reduction by 2025, five years earlier than Australia. They have also pledged a 17% reduction below 2005 levels by 2020 compared to our 5%.
Originally our commitment was to reduce emissions based on 2000 levels. Abbott has changed this to 2005 which, unsurprisingly, was a very high year for emissions (the second highest since 1990 when the Kyoto Protocol was drawn up), so using it as a basis allows us to have higher total emissions in 2020 than if we used 2000 levels.
But the statistical shenanigans don’t stop there.
Under the Kyoto Protocol, Australia negotiated a lenient second sentence in Article 3.7 (sometimes referred to as the “Australia clause”) that allowed Australia to include 1990 or 2000 deforestation emissions in the base year.
For all other developed countries, large deforestation activities stopped a long time ago and therefore do not increase base year emissions. In contrast, in 1990 and 2000 Australia’s emissions from deforestation were significant, but are substantially lower today.
Thus, while Australia compares future climate targets against past emissions that include those deforestation emissions, other countries — such as the US — do not. Because emissions from deforestation have declined, Australia was able to substantially increase emissions in fossil fuels, industry, waste and agriculture, and still meet the 5% target.
If you exclude deforestation and forestry, the US target for 2020 will see them reduce emissions to 4% below 1990 levels. Australia’s target will see us increase emissions to 30% above 1990 levels.
Australia’s population by 2020 is projected to be almost 50% higher than in 1990, while the US population will likely increase by only a third so there is some reason for our total emissions to increase at a greater rate. Looking at per capita emissions helps eliminate this difference.
Australian and US emissions developed similarly after the Kyoto Protocol from 1990 to 1996. Thereafter, Australian emissions continued to increase, while US emissions levelled off and started to fall after 2007. While under its 5% target Australia will likely decrease its per-capita emissions to 2020 by 12% compared to 1990 levels, the US will do so by 28%.
The 2011 Garnaut Climate Change Review found that even discounting exports of energy, “Australia’s per capita emissions are nearly twice the OECD average and more than four times the world average.”
A 2013 OECD report concluded Australia was the highest carbon emitter per capita in the group of 34 countries from 2005-09 on a consumption as well as a production basis, with the latter excluding the carbon cost of imported goods.
Abbott’s claim that we will reduce per capita emissions by 50% relies on some very rubbery calculations and manipulations but even if it was true, if you weigh 240kg and halve your weight you are still overweight.
An apples-with-apples comparison done by the Conversation shows that, to match US efforts, Australia would have to increase its 2020 ambitions of 5% below 2000 to 21% or even 29%, depending on whether different population growth is taken into account, or not.
And then there is Greg Hunt’s ridiculous claim that Labor’s carbon tax “reduced emissions at over $1,300 per tonne [while] the Emissions Reduction Fund auction price averages $13.95 per tonne. That’s right, Labor’s failed carbon tax was more than 93 times more expensive.”
What the government has actually done is spend $660 million of taxpayers’ funds buying 47 million tonnes of carbon abatement. In contrast, Professor Jotzo’s Australian National University study on the emissions reductions directly attributable to the carbon price in the electricity sector alone found that it had achieved an abatement of between 11 and 17 million tonnes over its two year life, while raising around $6 billion in revenue.
The crux of it is that whereas the carbon tax brought in revenue, the Abbott government’s scheme forks out taxpayers’ cash to polluting companies.
The government spent roughly a quarter of the $2.55 billion it has said it’s willing to spend on the ERF but, at 47 million tonnes, it’s only bought around 15 per cent of the abatement needed to meet the five per cent target. There’s also no guarantee the contracts companies won in the ‘reverse auction’ will be discharged before the 2020 deadline. Many of them extend for seven or 10 years, and the government has not provided information about when the abatements need to be achieved.
The types of projects contracted so far are largely land-fill and agriculture abatements, many of which may have been occurring already under ‘carbon farming’ initiatives, or would have occurred anyway. While the regulator will try, there’s also no guaranteeing baselines won’t be inflated to make abatements seem more significant than they actually are. Perhaps most importantly, the policy provides for only patchy, one-off cuts to emissions.
Also there is no cap on carbon production so there is nothing to stop businesses that choose not to take part in the reverse auction, or those who are unsuccessful, from increasing their emissions.
And then we have Greg Hunt’s assertion that “Labor’s climate policy” would impose a “$600bn carbon bill”. Abbott then used the same figure to claim Labor’s policy would “hit our economy with massive and unmanageable costs, massive increases in power prices, massive increase in the hit on families’ cost of living”.
Climate Change Authority chairman, Bernie Fraser rubbished the claim.
“This $600bn figure is not drawn from any logical process and it becomes weirder and weirder the more that you look at it. It compares a scenario where Australia has a 44% target by 2030 and the rest of the world is taking very strong action, with a scenario where Australia has no target and does nothing and the rest of the world does very little, almost nothing at all. It is the inferred cost difference between those two scenarios.
If you wanted a figure with some logical credibility or relevance you would model the cost of the government’s 26% target and a 40% target for 2030 and look at the difference between those two.”
Yet to be released modelling by leading economist Warwick McKibbin showed the 26% target would shave between 0.2% and 0.4% from Australian GDP in 2030, but the same modelling found that based on similar assumptions, a 35% target would cut only 0.3% to 0.5% and a 45% target would cut between 0.5% and 0.7%. The $600bn figure is based on a GDP cost in 2030 of over 2%. Coincidentally it was used in a story in the Daily Telegraph the day before Hunt trotted it out.
While Hunt’s newly released policy is supposed to cost $200 million a year from 2018 to 2030, with two thirds of the required reduction to come from “technology improvements and other sources of abatement” such as vehicle emissions standards, energy efficiency regulations and changes to the use of ozone and hydrofluorocarbons, none of these are actually outlined. They are just headings with numbers assigned to add up to…what did the US say…oh that’s right, 26 to 28%.
No-one agrees that this can be achieved at anywhere near Hunt’s figures.
The Australian Industry Group estimates that if Abbott’s target were delivered solely through Budget spending it would cost between $100 billion and $250 billion in unadjusted terms. The Climate Institute estimates that in the decade to 2030, relying solely on the Coalition’s Emissions Reduction Fund, taxpayers would fork out between $28 billion and $200 billion in nominal terms, depending on the carbon price per tonne.
Reputex project the government’s $2.55 billion Emissions Reduction Fund will be fully eroded by next year, while emissions baselines proposed to be set under the government’s Safeguard Mechanism are set too high to have any impact.
“We project covered companies are likely to grow their emissions by around 20 per cent over the next decade under the government’s safeguard scheme – so current policy will fail to even curb emissions growth – let alone reduce emissions to meet the new target.”
Kobad Bhavnagri, head of Australia for Bloomberg New Energy Finance, said “The reality is that if Australia desires a reduction in domestic emissions, the country must institute policies that reduce coal-fired power and boost renewables. If that doesn’t occur, Australia will have to consider a mechanism to purchase emissions reduction permits from other nations.”
It is time for Labor to take this fight on, to stop licking its wounds about the carbon tax and ‘Juliar’. The Coalition policy is rubbish, their figures are lies that can be so easily disproven.
With Paris coming up the spotlight will be on Australia so Labor should take the stage with not just aspirations but a credible detailed policy on how they intend achieving their goals.
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