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Australia emits 1.2% of the world’s greenhouse gases. So who must act to cut emissions?

Australia’s policies to address climate change have been among the most contentious political issues of the past quarter-century.

The standard refrain from the Morrison government is that Australia is performing well on a global stage when it comes to reducing the emissions of greenhouse gases that are cooking the planet.

And, the refrain continues, Australia’s emissions are just a fraction of the world’s total and if we didn’t export all that coal and gas, someone else would. In a global context, so this story goes, the main culprits are nations such as China, the United States and the fastest-growing emitter, India.

It’s true Australia is responsible for about 1.2 per cent of global emissions. It’s also true that we contribute a quarter of exports that make up the world’s coal trade and just became the biggest gas exporter.

So what effect does the action we take on climate change within Australia have on cutting emissions? What is our part in solving a problem that is, by its nature, global?

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First, is Australia on track with its emission cuts?

According to the Australian government’s latest data,annual emissions were little changed – down just 0.1 per cent – in the year to June 30, 2019.

As it happens, the choice of the base year comparison can alone alter the impression about how well Australia is doing. Compared with 2000, for instance, annual emissions in the latest year were down 0.8 per cent, suggesting the country has not done very much over the past two decades. But compared with a base year of 2005 – a neat shift the Abbott government made when it approved the Paris climate goal – the reduction suddenly swells to a more impressive 12.9 per cent.

Aside from recent reductions in emissions from the electricity sector as renewable energy’s share has increased, the only sector that has contributed a drop has been land use. Australia has consistently booked emissions reductions from reduced land clearing even during the years that governments in Queensland – the biggest deforesting state – and NSW have loosened restrictions on farmers.

Excluding the grandly named Land Use, Land Use Change and Forestry (LULUCF) change, Australia’s emissions have been rising since 2014, according to Climate Action Tracker. That’s also the year the Abbott government scrapped a price on carbon.

From the government’s own projections out to 2030, total emissions don’t look like falling much at all, with even LULUCF reductions not helping much.

Incidentally, emissions from bushfires don’t add to Australia’s ledger because – perhaps optimistically – the vegetation is expected to all grow back. For now, though, the UK Met Office is predicting the fires will make a sizeable contribution to what is expected to be a jump in atmospheric levels of CO2 in 2020.

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So where do Australian emissions cuts rank in the world?

While there are different ways to count emissions, Australia’s share amounts to about 1.2 per cent of global pollution.

According to The Australia Institute – using data from Germany’s Potsdam Institute for Climate Impact Research (PIK) – that tally ranks Australia as 14th-largest emitter.

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That doesn’t sound like a lot but, as the Australia Institute’s Tom Swann notes, if all the countries polluting less than Australia were taken together, they would account for 30 per cent of global emissions, or more than China’s 27 per cent share. China, the US, the EU and India emit about 60 per cent of the world’s total – and they all need to take action to cut back – but the emissions of the rest also matter.

“There is no solution to climate change without all countries taking strong action,” Swann adds.

When it comes to what’s a fair level of action for nations to be taking, things get murky quickly.

For instance, the Kyoto Protocol and Paris Accord largely avoid tallying historical emissions, even though rich countries got wealthy, in part, because their economies were powered by relatively cheap fossil fuels.

Instead, the wealthier nations were supposed to lead the way in reducing the pollution, with poorer nations expected to do less. Net-zero emissions is also the goal in the second half of this century if the world is to keep warming to less than 2 degrees. As it happens, all of Australia’s states and the ACT have at least nominal carbon neutrality targets by 2050.

But, of course, it is not just total emissions that count. Australia makes up just 0.3 per cent of the world’s population, so – on a per person basis – we pump out more greenhouse gases than most nations, according to the PIK.

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By another measure, Australia has also not been doing its fair share. The Abbott government choice of 2005 as the base for Australia’s Paris climate pledge gave it a relatively high-emissions year. The proposal to cut pollution 26-28 per cent by 2030 would have been more like 17-19 per cent if 2000 emissions were the starting point.

However, even since 2005, Australia has been a relative laggard among OECD nations.

What part do our coal exports play?

Global accounting rules focus on what is emitted within a particular country. China, the biggest emitter and the world’s manufacturing hub, has often pointed out a lot of its emissions are “embedded” in the steel, ships and other goods it exports.

Australia has an export role of its own that the government would rather not highlight.

The country is the world’s largest exporter of coking coal used to make steel, the second-largest exporter of thermal coal burnt in power stations and, since last year, the biggest gas exporter. These fuels are burned in other countries and the greenhouse gases from them counted against others’ ledgers – not that the atmosphere cares.

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Australia’s fossil fuel exports accounted for 3.6 per cent of global emissions in 2017, with the country’s coal exports alone accounting for more than a quarter of total coal trade, according to a report last year for the Australian Conservation Foundation by Climate Analytics. By exports, only Russia and Saudia Arabia contributed more.

A common line from both the Coalition and Laboris that Australia must support its $70-billion-a-year coal export industry as importers elsewhere would merely buy the coal or gas from other suppliers if we stopped. In fact, emissions would rise because Australian coal is “cleaner” than coal from other sources, so the argument goes.

“If you stopped exporting coal [from Australia] immediately then that would not reduce global emissions,” Anthony Albanese, Labor’s leader, told reporters in January. “There is enough displacement from other coal-exporting countries to take up that position, and that coal will produce higher emissions rather than less.”

That latter point is debatable. Major customers for Australia, such as Japan and South Korea, are cutting back on new coal plants. As such, future coal demand may be on the skids, so substitution won’t be the issue.

And opponents of Adani’s proposal to open up the giant Galilee coal province in Queensland argue that region’s coal will likely have a higher “dirty” ash and lower energy content than major alternative sources. Burning that coal won’t push down emissions, they say.

How business behaves, rather than governments, will be key. If recent indications are any guide, such as $10-trillion asset manager BlackRock’s move to ditch thermal coal, fossil-fuel exporting nations had better start diversifying their economies.

US-based BlackRock made news because of its monster clout in markets but Tim Buckley, a director of the Institute for Energy Economics and Financial Analysis, says the firm was actually a laggard. All but one of the main Japanese trading houses, for instance, has signalled they are getting out of coal, and major US banks will likely come under greater pressure to follow BlackRock.

“If Chase, Citi and Wells Fargo [match BlackRock], that’s virtually game over” for thermal coal, he says.

True, India’s fast-rising demand for energy will give coal exporters some hope but even there it will depend on state subsidies to keep the coal-fired power plants expanding. Wind and solar are already cheaper than new coal plants in India, Buckley says.

The Reserve Bank of Australia takes a cautious approach.

“In the long run, there is considerable uncertainty around the outlook for coal consumption. Demand will depend on many factors that are difficult to forecast, including the pace of economic growth in developing economies, changes in the cost and capabilities of different technologies (particularly for renewable energy and steel production) and changes to government policies,” the RBA said in a September 2019 outlook report on Australian coal.

Credit:Fairfax Media

How do our efforts count on the world stage?

Australia’s climate policies are not just assessed by the home audience of voters but the country’s international trading partners too.

Australia was one of only three nations – along with Norway and Iceland – to win concessions allowing it to increase emissions under the Kyoto Protocol period that ran from 2008 to 2020. It is this relatively weak goal that the Morrison government (and its predecessors) hails as “meeting and beating”.

By the agreed formulas of carbon budgets, Australia claims to have “over-achieved” its Kyoto goal, allowing it to claim a 411-million tonne “credit” it hopes to “carry over” into the Paris period, from 2021 to 2030.

As Stephen Howes, an Australian National University professor who worked on the Garnaut report into Australia’s emissions, notes in a recent report, taking 2020’s expected emissions total, the record is not one of “overachievement” at all.

Angus Taylor, the Energy and Emissions Reduction Minister, defends Australia’s stance, saying all targets under the Kyoto Protocol are assessed using so-called emissions budgets. It’s from these budgets that Australia is planning to count Kyoto “carryover” credits against its Paris goals.

Such credits effectively cut Australia’s emissions effort for the 2021-30 Paris period by about half – an accounting shortcut that has not gone unnoticed among Australia’s counterparts.

In the Madrid climate summit in late 2019, Australia’s Kyoto credit scheme drew special attention, including an effort to ban the use of such credits.

The fact that much of eastern Australia was starting to burn even as the meeting took place only served to reinforce interest in how one of the most exposed nations to climate change would be tackling the issue.

Germany, Britain, Sweden and New Zealand have all ruled out using such credits as against the spirit of the Paris accord, and the issue is not going to go away.

With pressure likely to mount on all nations to lift their Paris goals by the next climate summit – scheduled for late this year in Glasgow – the Morrison government has begun to signal that its international stance might also be starting to “evolve”.

“Australia will use its over-achievement from previous targets only to the extent necessary to reach the 2030 emissions reduction target,” Mr Taylor said in mid-January.

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