OECD says Australia is 2nd dirtiest economy per capita, tells it to clean up

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The Organisation for Economic Co-operation and Development has told Australia it needs to address extremely high per capita greenhouse gas emissions through clear federally-coordinated energy and climate policy.

That would include decarbonising the grid using “market-based mechanisms” – a reference to carbon pricing – promoting the uptake of electric vehicles, and setting stronger emissions targets for 2030 that are in line with the Paris Agreement.

The assessment, published in the OECD’s latest annual “Going for Growth” report, found Australia’s share of renewables in electricity generation (around 20 per cent in 2019) was far below the OECD average of over 40 per cent.

That highlighted the fact that while renewables may be coming online at a rapid rate, and DFAT has been happy to boast about that using photos of a California wind farm, Australia’s coal-heavy grid still has a long way to go before it will catch up with comparable countries.

Source: OECD

It’s ironic, because Australia has been talking up its renewable energy installations, despite the government’s repeated attempts to stop it or slow it down, and boasts of its cutting emissions per capita.

But the report, which provides economic recommendations to all its 37 member countries plus a handful of other major economies including India, China and Brazil, once again reveals Australia’s emission per capita are among the highest in the developed world.

Among OECD countries, only Iceland, a nation of 350,000 people, has higher emissions per capita than Australia. Of all the major economies included in the study, only the United States comes close to Australia’s emissions of more than 20 tonnes per person.

Other developed Anglophone countries such as the UK, New Zealand and Canada have far lower emissions per capita than Australia, as do all EU countries apart from Iceland, and major emerging economies including India and China.

Source: OECD


The report comes two months before former Australian finance minister Matthias Cormann takes over as secretary-general of the OECD.

Cormann was a senior member of the Coalition government that repealed Labor’s short-lived but highly-effective carbon pricing mechanism and refused to implement any serious climate policies. When former prime minister Malcolm Turnbull attempted to introduce the National Energy Guarantee in 2018, the first attempt at a federally-coordinated energy and emissions policy since 2013, Cormann withdrew his support for Turnbull as PM, an act widely seen as the decisive moment in the latter’s downfall, heralding a new era of weak climate policy under Prime Minister Scott Morrison.

In recent weeks Morrison has tried to project a more climate-friendly image, reviving the previously largely-ignored Climate Change Authority and appointing a special climate tzar, ahead of the COP26 UN climate conference in Glasgow at the end of the year. However, his decision to make former gas industry executive and lobbyist Grant King head of the Climate Change Authority fed the narrative that the government is still refusing to get serious about phasing out fossil fuels.

Cormann’s role in Australia’s notoriously weak climate policy looks awkward next to many of the OECD’s recommendations, which include a call for market-based mechanisms – a policy that is strongly supported by economists and the business community, but that the Morrison government has categorically ruled out.

“Severe drought and catastrophic bushfires emphasised the need to act on climate mitigation polices,” the report says.

“Adopting and implementing an integrated national energy and climate policy framework for 2030 based on a low-emission development strategy for 2050 would help achieve the goals of the Paris Climate Agreement.

“There is ample room to boost the electrification of transport by improving the charging infrastructure and further increasing the share of renewable sources in electricity generation, partly through the use of market-based mechanisms.”

Cormann will become OECD secretary-general on June 1, and has already signalled he won’t support the European Union’s plan to introduce a carbon border tariff on imports from countries without a form price on carbon, such as Australia.

Overall, the OECD made many recommendations for countries to improve their climate policies, including a number of European nations, including France and the Czech Republic. It also called for China, the world’s biggest greenhouse gas emitter, to do more to tackle its emissions, and for Brazil to do much more to halt deforestation of the Amazon rainforest.

The very gentle easing of emissions per capita in the OECD demonstrated how grossly inadequate current emissions reduction efforts are in the world’s richest and most developed nations, let alone the developing ones.

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