Emissions increase for first time in 10 years

Emissions increase for first time in 10 years
  • Australia’s annual greenhouse gas (GHG) emissions have increased for the first time in 10 years, dating back to fiscal year (FY) 2005-06.
  • Government figures forecast emissions growth of 6 per cent to 2020, despite current policy such as the Emissions Reduction Fund.
  • Australia’s forecast emissions growth rate is now among the highest in the world.
  • Despite current policy, Australian emissions are projected to grow to a new record high after 2020, with no ‘peak’ in emissions expected prior to 2030.

The latest inventory of greenhouse gas emissions released by the government indicates that Australian emissions increased 1.3 per cent over the 2014-15 fiscal year – representing the first increase in annual emissions since 2005-06 – more than ten years ago, reports RepuTex.

The government’s latest National Greenhouse Gas Inventory (NGGI) figures, published over the Christmas holiday, show an increase in emissions for four straight quarters, driven by a 33 per cent jump in emissions from land clearing, along with an increase in brown-coal generation, and liquefied natural gas (LNG) production.

The increase in fiscal year emissions is the first since 2005-06, when Australian emissions reached their historic peak

The government’s figures also indicate that Australia’s emissions growth will continue, with a 6 per cent increase emissions forecast through to 2020 – despite the government’s Direct Action Plan policies.

The government’s latest emissions outlook is a significant downgrade from its earlier forecast, which predicted emissions growth of 17 per cent through to 2020. The downgrade was expected by market observers, with the new projections unwinding optimistic economic assumptions used by successive Labor and Coalition governments, to more accurately reflect flatter economic activity.

Despite the downgrade, the government’s new figures indicate that Australia’s forecast emissions growth rate is now among the highest in the world.

According to the latest United Nations Framework Convention on Climate Change (UNFCCC) submissions, Australia is one of only five developed economies currently expected to grow its emissions to 2020, behind only Finland, Sweden and Estonia.

Australian emissions will grow over the next five years as the majority of developed economies begin to cut their emissions. The United States is forecast to cut emissions by 17 per cent on 2000 levels by 2020 under ‘current policy’ settings, while the European Union (18 per cent), Russia (31 per cent) and the United Kingdom (37 per cent) have all begun to reduce their emissions.

Australian emissions on track for new record high, no ‘peak’ before 2030

The government’s outlook for emissions growth confirms estimates published in November by energy market analysts, RepuTex, which calculated that Australia’s emissions would grow 6 per cent through to 2020.

According to RepuTex, Australia’s emissions growth will force the government to use an ‘accounting credit’ to meet its international commitment, as ‘real emissions’ will fail to reach the minus 5 per cent target on 2000 levels by 2020.

The government’s updated figures confirm this analysis, with official projections indicating that Australian emissions will now grow to be 6 per cent above 2000 levels in 2020, short of the minus 5 per cent target.

The government will therefore use its ‘carry-over credit’ for past performance to meet its international commitment under the Kyoto Protocol.

According to RepuTex, this indicates a disconnect between Australia’s abatement task – an ‘accounting measure’ used to track Australia’s progress to its 2020 target – which has fallen to ‘below zero,’ and Australia’s real national emissions, which are growing.

“Meeting Australia’s abatement task is largely just a victory in accounting terms. We have met our target, but we used a credit to get there, so it’s not a sign of any progress to reduce emissions” said Hugh Grossman, executive director of RepuTex.

“Australia’s task has fallen despite an increase in emissions over FY15 and a growth trajectory ahead, so there is a substantial disconnect between our national abatement task and the emissions reality” he said.

According to RepuTex, Australia’s current policies are likely to result in emissions growing to historic levels, and beyond, with no peak expected prior to 2030.

“As major new LNG and coal mining facilities begin to ramp up, even under lower commodity prices, we will see their demand for electricity grow, which will increase emissions from coal-fired power generation,” said Mr Grossman.

“Under those conditions we are likely to see emissions grow close to the 2005-06 high just prior to 2020, before reaching a new record high after 2020”.

“We project this pathway will continue to grow under current policy, with no peak in emissions within sight for the Australian market prior to 2030” he said.

Following the Paris climate agreement, and with an election on the cards for 2016, Australia’s emissions growth is likely to place more pressure on the government to strengthen its climate policy credentials to counter increased international and local scrutiny.

The government has announced a review of its Direct Action Plan policy in June 2017, reporting by November 2017, however any new policy is unlikely to take effect until 2018-19, in around three years’ time.

According to RepuTex, while the policy review is a positive step, Australia’s growing emissions may become a liability for the government as it enters an election year.

“Australia’s growing emissions could become either an Achilles heel for the government, or a catalyst for action,” said Mr Grossman.

“As emissions grow towards a new high, and the ERF is exhausted, we are likely to see increased local and international scrutiny, which may prompt the government to give some more direction on the ‘how’, ‘what’ and ‘when’ of its climate policy”

“While the government won’t jump the gun on its 2017 policy review, without a new statement of intent it will be hard for the electorate to distinguish between the new PM’s ambition and the Abbott-era of climate policy” he said.

RepuTex is Australia’s largest provider energy and emissions market analysis, with customers at over 150 power, energy, metals, mining, land-use, waste, financials and government agencies.

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