Australia is at risk of blowing its own carbon budget within 15 years – even with its current bipartisan climate change policies – and might need to cut its emissions by more than half by 2030 in a world that acts to avoid the worst impacts of climate change.
These are the broad conclusions of a new study by The Climate Institute, which is urging Australian policy makers to make a long term “budget” approach to climate action, rather than just a series of short term target. It says this is essential to properly recognise the “risks, responsibilities and realities in doing its fair share in helping achieve climate change goals.”
The concept of carbon budgets has been around for nearly two decades, but is only now beginning to gain traction as the world hurtles towards what many scientists and international bodies such as the UN, the International Monetary Fund, and the International Energy Agency say is a tipping point.
The IEA, for instance, suggested last year that the fossil fuel industry would need to leave more than two thirds of its defined reserves in the ground if global carbon budgets were to be met, and investors are becoming increasingly focused on carbon budgets because of the risk of stranded assets and a huge impact on investments.
HSBC last week issued a further warning about the tight carbon budget, saying it could be exhausted on a global level by 2030, and credit ratings agency S&P has also issued a warning about the implications of such budgets.
However, the study by The Climate Institute is the first attempt to ascribe a carbon budget to Australia, attempting to judge what its fair share of a global effort would be – a problem about individual and collective country responsibilities that has bedevilled progress in international climate change negotiations for the past decade.
The conclusions have major implications for Australia – or at least for those who would have the country continue on a business as usual basis. The TCI report does not go into the details of how more ambitious targets should be achieved, but the implications for a country heavily reliant on coal-fired generation, and determined to increase its thermal coal and LNG, should be clear.
TCI deputy managing director Erwin Jackson says that even on the Australian government’s current target of a 5 per cent reduction in greenhouse emissions by 2020, Australians would use four times as much of the global budget as the average global citizen.
The 5 per cent reduction suggests a carbon budget of 15 billion tonnes of greenhouse gas emissions for Australia over the next 40 years, while even the 25 per cent target (the current upper range of the government policy options) would assume a 13 billion tonnes budget.
But, says Jackson, “if the average Australian consumes no more of the global budget than the average person in other advanced economies then over the next 40 years we can only release 8 billion tonnes (of) carbon pollution. At current emission levels this budget would be consumed in around 15 years.”
“Like any budget, the more you spend early the less you have for later,” Jackson says. “If targets are set without reference to a long-term and fair national carbon budget, more draconian emissions reductions will be required after 2020 to meet national goals and international commitments.”
But what should be budget be?
Over the last 50 years, the average Australian has emitted around 15 tonnes of carbon dioxide (only), Jackson says. This compares around 11 tonnes for an average OECD citizen and 4 tonnes for an average global citizen. Australia’s per capita contribution to climate change has also been growing (on average) around twice the rate of world and the OECD nations over the last 50 years.
This table below gives an indication of what the Australian budget could be on a per capita basis over the next 50 years. The 5 per cent target and 25 per cent reduction targets suggest only a modest reduction, and would set the world on a target of 4C to 6C temperature rise if adopted by other countries.
Adopting similar targets to other developed countries would require a carbon budget of just 8t/Co2 per capita. But the budget could be even more challenging: The “cumulative per capita model” developed by the German Advisory Group on Global Change, and adopted by the ANU Centre for Climate Law and Policy, and similar to the model suggested by China in international climate talks, suggests a per capita budget of just 4t/Co2.
Jackson says that how a carbon budget is defined can have an impact on short-term decision making and implications for a long-term emissions reduction pathway.
The Australian Climate Change Authority is about to consider Australia’s short and mid term reduction targets, and Jackson says that if a long- term budget is not taken into account it increases the risk that more dramatic and draconian emissions reductions will be required post 2020.
Jackson provides some scenarios about how this would look like, in the table below. The current policy of a 5 per cent reduction is simply not credible in scientific terms, so is not modelled. But even a 25 per cent reduction by 2020 pre-supposes a much tougher budget in the 2020-2030 decade.
“Under all scenarios, the emission reductions in 2030 are similar, around a 60 per cent reduction on 2000 levels,” Jackson writes.
“However, the difference in the rates of emission reductions in the two decades is very different. For example, in the delayed scenarios average rates of emission reduction between now and 2020 is around 1 per cent per year. This jumps to between 8-10 per cent in the following decade. The more credible pathway delivers a more steady reduction in emissions, while deferring credible action sees much more rapid emission reductions post-2020.
“Like any budget, the more you spend early the less you have for later.”
This graph illustrates what that steady reduction would look like in terms of Australia’s overall budget from 2010-2050.