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Oct 30 2013

CCA Targets Review releases daft draft report

Today Australia’s independent Climate Change Authority (CCA) released the Targets and Progress Review Draft Report. (The word “Caps” has been removed from the Review’s name, presumably to dissociate it from the former government’s emissions trading scheme.)

The new Liberal government plans to abolish the CCA, and the legal requirement to set an emissions target, as part of legislation to repeal the former Labor government’s carbon price. Labor is now reportedly debating whether to negotiate on the bills, but at present Labor continues to defend the existence of the CCA and a cap on emissions. CCA is conducting the Review in accordance with existing law, but acknowledges the Government’s plans to replace the carbon price with an Emissions Reduction Fund, arguing that advice on selecting an emissions target remains relevant regardless of the chosen policy mechanism. It also notes Australia will be required to revisit the strength of its 2020 target at the COP20 climate talks in Peru in 2014, and agree post-2020 targets at COP21 in Paris in 2015.

In August, I said in relation to a leaked version of the Draft Report:

CCA is at a fork in the road. They could continue attempting to ingratiate themselves with Australia’s political class by spouting platitudes about moving up the conditional target range at minimal cost. This might make CCA and the government look good, but it won’t do much to address climate change. Or they could choose to wipe the slate clean and challenge the government’s beliefs about Australia’s role in climate action. The government may not listen, but they certainly won’t listen if CCA never makes the argument, and CCA’s report would at least help to reframe the climate debate. Therefore CCA should not shy away from making the strongest possible recommendations.

Unfortunately CCA has chosen the former route. CCA continues to essentially adhere to the beliefs of the former government by operating within the deeply flawed framework of the Garnaut Review commissioned by Labor, despite the Liberals having no affiliation with Garnaut.

The good

The report concludes all countries will need to do more to meet the globally agreed goal of limiting global warming to <2°C, and Australia’s present 5%-by-2020 emissions reduction target is “inadequate” and “not credible”. This is a statement of the bleeding obvious but nonetheless an advance on the position of the two major political parties. One of the reasons listed is that “it is inconsistent with action toward the 2 degree goal” because it implies “an implausibly rapid acceleration of effort” after 2020 (which seems to me important enough to make it unnecessary to mention other reasons).

CCA concludes the cost of emissions reductions is less than previously believed, because of the falling price of renewables and because emissions are tracking below 2012 business-as-usual projections (though something tells me that may have been because of the fixed carbon price). If Australia reduces its emissions by the same amount relative to business-as-usual as in the 2012 projections, we would reach 11% below 2000 in 2020. CCA also points out that more ambitious emissions targets would have a relatively small economic impact, and Australia risks becoming an economic “backwater” as the world moves away from fossil fuels.

Hopefully by declaring the 5% target “inadequate”, CCA will help shift the Australian climate debate toward more ambitious targets. However, from here on the report quickly goes off the rails.

The bad

The draft report buries the lead: at its current emissions rate Australia could exhaust its fair carbon budget in just 6 years. This conclusion is completely ignored in the Review’s recommendations.

CCA misguidedly focuses on the <2°C target, ignoring the evidence that the present level of atmospheric CO2 and global temperature are already dangerous and there is very little time to avoid large feedbacks that could send climate change spiralling out of control. This means we urgently need to phase out global greenhouse gas emissions, most importantly fossil fuel CO2 emissions, as quickly as possible. A pathway consistent with reducing atmospheric CO2 from 400 to 350 ppm would involve cutting global fossil fuel CO2 emissions by 6%/year beginning in 2013 (or even faster if the world delays).

CCA chooses a global budget of 1700 Gt CO2e for 2000-2050, which corresponds to a 67% chance of avoiding (or a 33% risk of exceeding) 2°C. Not only is the <2°C target unsafe, but 33% is an intolerably high risk of missing it. Also, CCA fails to spell out that a global carbon budget for any >50% probability of <2°C requires leaving most of the Earth’s fossil fuels in the ground.

In selecting its carbon budget, CCA has chosen to lump different greenhouse gases together using the flawed measure “CO2-equivalent” (CO2e). The report acknowledges that different gases behave differently in the atmosphere, but ignores this because: “Multi-gas approaches are consistent with Australia’s international commitments and with the approach adopted by other nations.” The report does not even use the latest scientific information on global warming potentials in its CO2e calculations prior to FY2017-18. Similarly, the report does not acknowledge that fossil carbon and land carbon play different roles in the carbon cycle. Consequently CCA fails to recognize that it is most important and urgent to cut fossil fuel CO2 emissions.

CCA considers a number of options for Australia’s share of the 1700 Gt global carbon budget, the smallest being less than 4 Gt CO2e (based on a per-capita share of the global budget). This is the budget that would run out in a few years. But CCA dismisses this arguably fair approach because it implies an Australian emissions target of 70% below 2000 by 2020, claiming it is “probably infeasible” to make such reductions within Australia (but citing no evidence for this claim). Instead, CCA recommends Australia adopt a carbon budget of 10.1 Gt CO2e for 2013-2050, about a 1% share of the global budget. This choice is based on Garnaut’s “modified contraction and convergence” framework, which unfairly favors Australia by allowing Australia to maintain its high per-capita emissions for decades, rewarding Australia for its past failure to cut emissions, and rewarding Australia for policies promoting rapid population growth.

Unfortunately, however, CCA’s main argument for raising the emissions target is not the carbon budget but that “the Government’s conditions and the pace of international action justifies us going further”. CCA clearly sees Australia’s role in climate action as a mere follower, rather than the leader which our wealth and high emissions oblige us to be. Despite the fact that CCA’s mandate puts no limit on the ambition of the targets it can recommend, the report stubbornly stays within the Government’s present constrictive range of conditional targets (5%, 15%, or 25% below 2000). This is an implicit statement that Australia should sit around and wait for other countries to take adequate action before we strengthen our own target. Thus the argument becomes about whether the actions of other countries live up to Australia’s conditions to raise its own ambition, despite the report having earlier acknowledged the present targets of other countries are nowhere near what is required.

CCA argues the Government’s stated conditions for moving beyond 5% to 15% have been met. The report talks up the actions of other countries, for example describing the policies of the US as “ambitious”, when in reality their 2020 target is 17% below 2005, a mere 4% below 1990. And it uses various comparisons to show Australia is “at the lower end of effort compared with other developed countries”, whereas the 15% and 25% options are roughly in line with the actions of other countries. But all the Government has to say to counter CCA’s argument is that the conditions have not been met to the Government’s satisfaction.

Instead, CCA should admit it is unfair, undiplomatic, and counterproductive for Australia to make any of its actions conditional on the actions of other countries, particularly developing countries. The UNFCCC principle of “common but differentiated responsibilities” obligates the world’s richest and highest per-capita emitters to show leadership, so poor countries are unlikely to ever be impressed by conditional emissions targets from Australia. If a given target is justified, then Australia should adopt that target regardless of international action. Unconditional unilateral ambition is required to break the international deadlock, and by “ambition” I mean zero emissions ASAP.

Some of the arguments CCA makes about low costs are problematic too. For example, the conclusion that a 25% target would cost little more than 15% relies partly on the assumption that international offsets will be allowed (see “The ugly”).

Another example is CCA’s recommendation that the Government use the 91 Mt CO2e of surplus credits from Australia’s Kyoto Protocol first commitment period target to grant itself a free three-percentage-point emissions “reduction” relative to 2000 by 2020. Not only would this displace future emissions cuts, it would unfairly reward Australia for having demanded an emissions increase target in Kyoto, and “achieved” that target with creative accounting in LULUCF (land use, land use change, and forestry) without meaningfully reducing its contribution to climate change. Instead, surplus permits should be voluntarily cancelled so they do not dilute future targets.

The report claims Australia’s emissions have been level since 1990. The reality is emissions excluding LULUCF rose 32% between 1990 and 2011. CCA even has the audacity to claim “over the past two decades Australia has achieved solid economic growth while halving its emissions intensity (emissions per unit of GDP).” In reality, emissions intensity reduces automatically over time so this statistic is meaningless.

CCA’s recommended targets are relative to a baseline of emissions levels in the year 2000 and include LULUCF. But it would be much fairer to make 1990 the base year and exclude LULUCF from the main target, because Australia should not be rewarded for the failure of the Hawke, Keating, and Howard governments to cut emissions.

CCA’s final report will recommend an emissions target for 2020, a target range for 2030, and an emissions budget and trajectory out to 2050, with the post-2020 recommendations to be periodically reviewed. However, the draft report does not make a final recommendation on what the 2020 target should be, instead canvassing two alternate pathways:

  • 15% below 2000 by 2020 (using up 4.3 Gt CO2e of Australia’s budget during 2013-2020), and 35-50% by 2030.
  • 25% below 2000 by 2020 (using up 4 Gt CO2e of Australia’s budget during 2013-2020), and 40-50% by 2030.

As Tim Hollo notes, these scenarios link weak 2020 targets with weak 2030 targets, at odds with CCA’s conclusion that 15% would use up more of the budget than 25% and therefore require faster emissions cuts later. CCA rules out a 40%-by-2020 target based on an arbitrary principle that “anything more than a 35 percentage point jump between targets 10 years apart is too large”.

The focus on targets as far off as 2020, 2030, and 2050 ignores the urgency of rapid global emissions cuts and Australia’s responsibility to lead the world. Moreover, such distant targets are easily undermined. CCA should instead recommend an emissions trajectory that reduces rapidly toward zero, and requires large and systemic progress within a single electoral term in transitioning from the fossil fuel economy to a zero-carbon one.

The ugly

The report ignores Australia’s largest contribution to climate change, its fossil fuel exports. But in a world where national emissions targets do not add up to a safe global target, Australia shares ethical responsibility for its exports. Demand for Australia’s planned fossil fuel export growth depends on an emissions scenario leading to an unimaginable catastrophic >4°C global warming. Australia must stop expanding and start phasing out its fossil fuel exports.

CCA’s decision to recommend a single target for 2020 and a range for 2030 is supposedly intended to balance short-term certainty for investors with long-term flexibility to respond to changing circumstances. But investment certainty is unachievable because of the sabotaging influence of the fossil fuel lobby, and flexibility cannot wait until after 2020. The world’s governments are scheduled to agree ambitious 2020 targets in 2014, and post-2020 targets in 2015. If Australia continues to insist on a weak target for itself, it will contribute to the global institutionalization of inadequate action until 2020 or beyond. Thus a bad decision may be difficult to correct for years even if CCA continues to exist. Therefore the CCA must get it right now.

The report endorses gas-fired electricity generation and says it is dependent on coal seam gas extraction (as well as climate policies), a conclusion which The Australian is already using to bash the Greens. In reality, investment in gas would lock in fossil fuel infrastructure for decades we don’t have.

Despite the fact that policies determine whether targets are met in a meaningful way, the Review continues to refuse to comment on mechanisms, except for one issue on which its recommendation is to go in the wrong direction: it says international offsets should be allowed. This is a backwards step from the Issues Paper, which implied the Review would not comment on the issue of offsets. One of the few things which the new Government has got right is that international offsets will cause Australia’s emissions to go up not down, and that this is unacceptable. CCA should reaffirm the Government’s decision to take a strong stand on this issue, instead of seeking to weaken it.

CCA claims there is “no special merit in confining emissions reductions to domestic actions, so long as the international emissions reductions purchased are credible”. In reality, even credible offsets would delay systemic economic decarbonization in Australia and unfairly shift the burden of Australia’s target onto other countries (making a mockery of dividing up a global carbon budget into fair shares). The report also claims emissions cuts will be more expensive without international offsets. In reality, the supposed cost reduction is actually a reduction in the effectiveness of the policy, while the “cost” is mainly paid by polluting companies and pales in comparison to the avoided long-term costs of climate change.

CCA recommends: “The Government should consider allowing the use of international emissions reductions”, albeit “paying careful attention to the environmental integrity of the emissions reductions allowed”. But does CCA really believe the Government, once the door to offsets is opened, will pay any attention to their environmental integrity? The historical record in Australia and around the world shows governments will do anything to get out of making meaningful emissions cuts, so independent bodies like CCA need to hold them to account.

CCA’s focus on minimizing costs represents a failure to understand climate change is an urgent crisis, and policies that mitigate enormous costs from climate change are preferable to policies that are cheap and ineffective. Australia’s true national interest is not in low-cost climate policy, but in preventing dangerous climate change. Moreover, governments have a long history of overestimating the costs of climate action and underestimating the costs of climate change. Perhaps most fundamentally, the discount rates used in cost-benefit analysis of climate policy effectively devalue the lives of future generations.

Responses

Environment Minister Greg Hunt said he appreciates CCA’s contribution but Australia will not raise its ambition, instead waiting until 2015 to see what happens.

Unfortunately, the response of the Greens and environmental groups focused on praising CCA for the good, glossing over all the bad and the ugly. However, Greens leader Christine Milne did say Australia’s 5% target is holding back global action and repeated the Greens’ long-standing support for a target range of 25-40% by 2020.

Meanwhile, a recent WWF analysis recommended Australia adopt an emissions target of 27-34% by 2020 and roughly carbon-neutral by 2030, based on its own carbon budget approach. WWF also released a poll showing 80% of Australians support a deeper target than 5% and 52% support a minimum target of 25% or more.

Conclusion

CCA was supposed to take the politics out of emissions targets. Instead we are seeing the same evasion of action and rationalization of inaction that we saw from Garnaut. Now I find myself asking: is this it?

CCA must get out of the echo chamber of the political elites and recommend a carbon budget, target, and trajectory that truly meets Australia’s obligations to help prevent dangerous global warming. The WWF poll shows CCA is lagging behind public opinion. CCA itself admits that a fair estimate of Australia’s carbon budget runs out in just a few years, so why don’t they heed their own advice? I reiterate my recommendation that the 80% target be brought forward from 2050 to 2020.

CCA has called for public submissions on the Draft Report. The submission process closes on 29 November, and if CCA still exists it will release its final report on 28 February 2014. Let’s tell CCA to step up its game.

1 comment

  1. aubreymeyer

    Aubrey Meyer at 01:31 AM on 2 November, 2013
    The Australian Government’s Climate Change Authority made a lot of reference to Contraction and Convergence in Chapter 9 of the draft report: – http://www.gci.org.uk/Documents/CCA_TargetsAndProgressReport_WEB_FA.PDF

    While in principle there is now other way to go, the draft report’s overall effort was somewhat unguided by the overall carbon-budget that is consistent with avoiding 2C, if IPCC AR5 is anything to go by: – http://www.gci.org.uk/CBAT1_i-5a.html

    Moreover, stating [still] that their preferred ‘convergence-date’ is 2050, simply augurs a repeat of the row we all had at COP-15 in 2009 over this matter.

    To get a better sense of these two key numbers: –

    [1] The overall contraction-integral and
    [2] The convergence rate within that

    . . . as they develop the draft now out for public consultation, this ‘Carbon Budget Analysis Tool’ [CBAT] may be helpful to authors of the CCA draft: –
    http://www.gci.org.uk/cbat-domains/Domains.swf

    . . . particularly on *negotiating* rather than *preferring* [or even *prescribing* – as the UK Government did in the UK Climate Act] the rate of convergence: – http://www.gci.org.uk/CBAT1_i-6a.html

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