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86 Parliamentary Library Briefing Book: Key Issues for the 44th Parliament
Australia’s part in global climate action Anita Talberg, Science, Technology, Environment and Resources
KEY ISSUE Climate change is a global issue. As Australia is responsible for less than 2% of annual global greenhouse gas emissions, it is important to look at what actions China, the United States and Europe are undertaking.
The status of international negotiations The first phase of the Kyoto Protocol, which set legally binding greenhouse gas emissions reduction targets on participating countries, ended in 2012. A second phase started in 2013 with a targeted reduction in emissions of 18% below 1990 levels by 2020. Only 36 countries - 28 of which are European Union (EU) member states - signed on to this second phase. Australia is one of those 36 countries; its target is consistent with a pre-existing and bipartisan commitment to reduce emissions so that by 2020 it produces 5% less than it did in 2000.
Negotiations on a new deal to take effect post - 2020 have been underway since 2011. This new deal, which is expected to be finalised in 2015, is to be legally binding and fully inclusive of all nations, both developed and developing. It seems likely that the design of the agreement will allow pledges of various sizes and types so as to accommodate the needs of poorer nations. Australia has indicated its readiness to be part of such an agreement and has been actively participating in the process.
Australia’s international commitment Australia’s pledge to reduce emissions by 5% on 2000 levels by 2020 is flexible. Should there be a global agreement under which major developing economies commit to substantially restraining their emissions and advanced economies take on comparable commitments, then Australia will increase its pledge to:
â¢ 25%, if a global pact can stabilise emissions levels at 450 parts per million (ppm) or less; or
â¢ 15% if the agreement cannot meet that condition.
These commitments have had bipartisan support, but whether they represent a fair and adequate contribution is an issue of contention. For comparison, the European Union (EU) targets a 20% reduction on 1990 levels by 2020; the United States (US) targets ‘in the range’ of 17% on 2005 levels; and China aims to cut the emissions intensity of its economy by 40% to 45% on 2005 levels. Because it is still a developing country, China prefers to measure emissions per unit of gross domestic product, referred to as emissions intensity, rather than absolute volumes of gas.
The EU, US and China together account for more than 50% of world emissions. The actions being taken to meet emissions reduction targets in these countries is of global import. The EU, a pioneer in terms of climate policy, has had an emissions trading scheme (ETS) in operation since 2005. However, climate policies in the US and China are still evolving.
Climate policy in the United States All attempts to establish climate policies and pass legislation have been met with resistance from Congress. In June 2013, President Obama announced a new Climate Action Plan. The plan has three parts: cutting greenhouse gas emissions, adapting to the unavoidable impacts of climate change and participating in global discussions. The emissions reduction efforts have five elements: deploying clean energy; building a 21st century transportation sector; cutting energy waste in homes, businesses and factories; reducing other greenhouse gas emissions; and leading at the federal level.
Each element is achieved through policy instruments, primarily investment into research and development, grants, loans, targeted government funding and more stringent standards.
Climate policy in China China’s social and economic development
initiatives are outlined in five -year blocks in the Five Year Plans (FYPs). The 11th FYP defined reforms to be instigated from 2006 to 2010. The 12th started in 2011 and shows a strong move towards market-based mechanisms. It establishes carbon trading pilot schemes across seven provinces and cities. These pilot schemes are expected to provide invaluable information and testing grounds for a national ETS to be ready by 2016. And, according to Chinese reports, the ETS does not rule out the potential for a carbon tax. In July 2013, China’s Ministry of Finance drafted regulations to put a RMB20 to RMB25 (A$3.50 to A$4.40) tax on fossil fuels used by Chinese firms.
Which countries have an ETS?
A total of 39 countries have some form of mandatory legislated ETS either at the national or subnational level: the 28 EU member state, and Norway, Iceland, Liechtenstein, Australia, New Zealand, Switzerland, South Korea, Kazakhstan, Canada (but only in Alberta and Quebec), US (in ten states only), and Japan (only in Tokyo and Saitama).
China is rolling out pilot ETSs in seven regions. Each is at a different stage of legislation or implementation.
What does all this mean for Australia?
In the context of Australia’s international pledge, there does not appear to be a global agreement that meets the requirements for a target increase to 15%. However, Australia agreed at international climate negotiations in Copenhagen: ‘that deep cuts in global emissions are required … so as to hold the increase in global temperature below 2 degrees Celsius’. Research suggests that the world is actually heading for an increase of at least four degrees by the end of the century.
Reviewing Australia’s commitment In April 2013, Australia’s Climate Change Authority began a review of the national 2020 target and progress towards it. A final report is scheduled for February 2014. The ABC news reported that a leaked draft report advocates a 15% cut in emissions on 2000 levels by 2020, moving to 40% by 2030 and 90% by 2050.
Scientists suggest that to have more than a 60% chance of limiting the temperature increase to within two degrees, global greenhouse gas emissions must be stabilised at 450 ppm. According to the 2007 report of the Intergovernmental Panel on Climate Change (IPCC), meeting this 450 ppm target would require developed countries to reduce emissions by up to 40% below 1990 levels by 2020 and then by 80% to 95% below 1990 levels by 2050. Developing countries would also need to make ‘substantial reductions’.
On 27 September 2013, the IPCC released the first part of its latest report. This provides the scientific evidence upon which the next round of international negotiations can draw, but it does not delve into the mitigation of climate change (expected in a report due in 2014). Poland will host the next set of climate change negotiations in November 2013. However, no major announcements are expected before scheduled negotiations in December 2015 in Paris, when a new post-2020 agreement is due to be finalised.
Further reading A Talberg & K Swoboda, Emissions trading schemes around the world, Background note, Parliamentary Library, Canberra, 6 June 2013.
Climate Change Authority, Caps and targets issues paper, April 2013.
A Talberg, ‘Introducing the Doha Climate Gateway’ and ‘What happened to Kyoto at Doha’, FlagPost weblog, 11 December 2012.