Prof. Syed Munir Khasru
Australian Institute of International Affairs
October 20, 2023
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In climate change, Australia’s targets have become least ambitious by a significant margin compared to the other countries in the OECD. Beyond a focus on supporting green technology companies, policies are necessary to initiate a gradual shift in the Australian economy and ensure its competitiveness in a low-emissions global future.
Last March Australia’s parliament approved a landmark emissions reduction legislation, marking the most significant legislative action taken in over a decade. The government secured support from Green party members and independent MPs to address pollution stemming from large-scale industrial facilities, forcing carbon emitters like coal mines and oil refineries to curb emissions by 5 percent each year, which is expected to reduce more than 100,000 tonnes of greenhouse gases each year. The long term emissions reduction plan aspires a carbon-neutral state by 2050. The plan has boosted Australia’s climate targets as reviewed by the International Energy Agency (IEA).
Ted O’Brien, spokesperson for Liberal Party, expressed concerns that if emissions were capped, it would lead to Australian industrial investment being shifted to China and India. Over the years, the climate policies of Australia’s two major political parties, Labor and Liberal, have displayed significant variations, encompassing both substantial measures as well as symbolic declarations. Starting from 2007, Australia’s approach to climate change has been a prominent topic in federal elections, calling for careful examination of party policies. The divisions within the political landscape are mirrored in opinions of the Australian public, as attitudes towards climate change align with demographic and political differences.
While Australia benefits from increased global action, it has its own share to help attain global goals. With growing global attention on climate change and pursuit of net zero targets, demand for climate technology is experiencing rapid growth. Australia has 171 climate tech companies valued at AUD$4.2 billion, having raised AUD$1.4 billion in funding over the past year, with half from international investors.
Australia holds the distinction of being the first country to repeal an emissions pricing mechanism in 2014 and, like other nations, has made commitments to reduce greenhouse gas emissions to address climate change. This entails adopting renewable energy sources, enhancing energy efficiency, establishing sustainable transportation systems, and transitioning to a low-carbon industrial sector. However, Australia’s focus on technology development has taken precedence over addressing the political divide that negatively affects dealing with climate concerns.
The current decrease in emissions is primarily attributed to the climate initiatives undertaken by state governments in the power sector and adoption of electric vehicles. It is also influenced by accelerated retirement of coal power plants, developments in the land sector, market forces affecting gas companies, and anticipated change in international coal and LNG markets driven by countries committed to the Paris Agreement.
In December 2020, the Australian government estimated that the country’s emissions would decrease by approximately 22 percent below the levels recorded in 2005 by 2030. However, results fall below the target set by the Paris Agreement, which aims for a reduction of 26-28 percent below 2005 levels. Furthermore, Australia’s 2030 climate target ranks second to last among eight similarly affluent OECD countries, including the EU27. Excluding uncertain emissions from the forestry and land sector, Australia’s target becomes the least ambitious by a significant margin compared to the other countries. For example, the EU27 aim to achieve a minimum of 55 percent reduction in net greenhouse gas emissions by 2030. Even the US has made a pledge to lower net greenhouse gas (GHG) emissions by 50-52 percent from the levels recorded in 2005 by 2030. When accounting for the coal exports, Australia, despite its relatively small population of 25 million, jumps from being the 15th-largest emitter of CO2 to the world’ fifth-largest. Australia also has aligned its lobbying efforts with other major energy players like Saudi Arabia to counter the UNs’ recommendations for phasing out fossil fuels.
The Abbott Government aimed to dismantle the climate policy structure of the former Labor government and introduced legislation to abolish the Climate Change Authority. Their initial abolition bill was rejected by the Senate as the subsequent bill lapsed without being enacted. However, in 2013 the Abbott Government abolished the Climate Commission responsible for providing public information on the effects of global warming and potential solutions. By contrast, the Albanese Government has presented the Climate Change Bill 2022 aiming to enhance accountability by requiring the Minister for Climate Change to provide an annual statement to Parliament. It empowers the Climate Change Authority to offer guidance on Australia’s advancements toward climate targets and recommend future targets. This is a shift in approach towards climate change compared to the previous government.
The Australian Climate Change Authority (CCA) recommends implementing focused and consistent policies for reducing emissions, which include market-based mechanisms and complementary measures. These policies are necessary to initiate a gradual shift in the Australian economy and ensure its competitiveness in a low-emissions global future. However, the relatively short length of Australian government, typically three years, can pose challenges to the continuity and stability of climate policies.
Political commitment to address climate change has been a contentious issue with differing views and priorities among Australia’s political parties and stakeholders resulting in policy uncertainty, inconsistent targets, and limited progress in reducing emissions. Strengthening political commitment also involves engaging with the international community, participating in global climate agreements, and learning from the experiences of other countries. It is crucial for Australia’s political leadership to prioritise climate change, enact supportive policies, and allocate necessary resources to facilitate transition to a low-carbon economy.
While recent legislation aimed at reducing Australia’s carbon emissions is a positive step, much more still needs to be done. Australia will eventually face challenges in maintaining its competitiveness as a high-emissions economy due to the global shift towards stronger climate action and a lower emissions global economy. To mitigate this risk, it is crucial to implement policies that drive domestic emissions reductions, facilitate a gradual transformation of the domestic economy, seize low-emissions growth opportunities, foster innovation, and stimulate new investments in low-emissions technologies. Equally important is bipartisan political leadership which is the sine qua non for fulfilling Australia’s global obligations and positively contributing to global climate action.
