Australia scrambles in Lima to prevent blowout in 2020 emissions target

LIMA: Australia faces a blow-out in its 2020 emission targets which will not only cause embarrassment around its domestic policies, but could compromise its continued involvement in the Kyoto Protocol.

Australian negotiators have been trying in Lima to clarify an amendment made two years ago in Doha which could add 90 million tonnes of abatement to Australia’s target by 2020.

The implications of such a blow-out are clear. Either it will be met by domestic cuts, adding up to 2 per cent to Australia’s 5 per cent reduction target, or the Abbott government will be forced to go to the international market to make up the difference, something it has insisted it would never do.

The alternative would be for Australia to refuse to ratify the second commitment period of the Kyoto Protocol, but that would be a highly inflammatory act in the lead up to the Paris climate talks, where a successor to that treaty is to be negotiated.

Australian negotiators had tried to resolve the problem in Lima, and were prepared to accept a compromise proposal from Brazil. It looked like it was headed to Julie Bishop’s list of things to do in Lima, and it still may – depending on the result of a plenary session on Monday – but it is more likely the issue will get punted to another meeting next June after smaller developing nations proposed a harder line.

The problem surrounds the definition of “emissions” that was included in an update to the treaty negotiated in Doha. The amendment was designed to ensure that “industrial” emissions from individual countries in the treaty did not increase from an average calculated over 2008-10, and excludes deforestation from the calculations.

It was essentially designed to stop eastern block countries being able to claim a massive free kick after the collapse of their economies, but Australia got caught in the web – the current intention is to exclude “deforestation”, which Australia has included, to define it as an average of industrial emissions in the years 2008-10.

There is varying forecasts about how this could impact Australia – ranging from 40 million tonnes to as much as 90 million tonnes. That would add around two per cent to 5 per cent emissions reduction target by 2020.

It would be unthinkable that that could be met domestically via the Emission Reduction Fund, because that will struggle anyway to meet the 2020 target. Some say it will fall short by several billion dollars.

A cheap option could be to buy credits on the international market. They are currently going for around $1 a tonne of abatement, but Abbott has rejected such scheme as ”money that shouldn’t be going offshore into dodgy carbon farms”. He has also described carbon trading as “a market in the non-delivery of an invisible substance to no one”, borrowing a favoured phrase of climate denier blogs.

Dropping out of the second commitment period would also be inflammatory, although given the Abbott government’s scatter gun approach to these negotiations – refusing climate finance, accusing China of doing no more than business as usual, cutting funding to key UN body, distancing itself from a group of progressive nations, claiming climate change is not impacting the Great Barrier Reef, “standing up for coal” and sending a climate skeptic minister (Andrew Robb) to the talks – it could not be ruled out.

Business, however, has urged Australia to remain in the KP, as have economists such as Ross Garnaut. Without KP, Australia would have no access to international carbon markets, which could leave the country, and business, badly exposed by having to source more expensive abatement at home – particularly if pressure grows for Australia to lift its targets.

“It is disappointing greater clarity on some outstanding questions around could not be finalized in Lima,” Erwin Jackson, Deputy CEO of The Climate Institute said. “Australia signed up to new Kyoto targets with bipartisan support.”

“To buffer criticism of backward steps on finance and weak emissions gargets, Australia could signal it intention to ratify KP next year. Ratification would also allow Australia to meet targets at lowest cost.”