Extract from The Guardian
Analysis: The PM changed tone as soon as Joe Biden was projected likely next US president. Will a policy pivot follow?
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Scott Morrison’s language about Australia adopting an emissions reduction target of net zero by 2050, and about climate action more generally, is starting to warm up. The recent shift in the prime minister’s language invites two questions: is there a pivot under way, and is the shift real?
The story so far
We know the Coalition’s history on climate policy. The Abbott government repealed Labor’s climate price, attempted to gut the Renewable Energy Target and abolish agencies driving a transition to low emissions energy. Morrison while treasurer brandished a lump of coal in the parliament, telling his opponents not to be “scared”. For much of this year, the Coalition has ignored persistent entreaties from environmentalists and major business groups to adopt a target of net zero emissions by 2050 at the latest, and to use the economic recovery from Covid-19 to lock in the transition to low emissions. Morrison has never ruled out adopting a net zero target but has created the impression the government wasn’t interested – an impression reinforced by the government’s declaration that it would pursue a “gas-led recovery” after the pandemic.
When and why did the language change?
In the couple of weeks before the US presidential election on 3 November, Japan, China and South Korea adopted pledges taking them closer to net zero. Morrison also had a private conversation with the British prime minister, Boris Johnson, in which net zero was raised. Leaders were anticipating the likely election of Joe Biden. The Democrat had promised to end the backsliding of the Trump era and revitalise international climate negotiations, starting with bringing the US back into the Paris deal. Biden’s appointment of John Kerry as his climate envoy after winning the election is a further signal of seriousness. From the moment Biden was projected as the likely winner, Morrison’s language began to change. It became noticeably warmer. Morrison now says Australia wants to “reach net zero emissions as quickly as possible”.
What about 2030?
Before we get to 2050, Australia has an emissions reduction target for 2030, and the government will be under pressure to update that commitment with a higher level of ambition in the next round of international climate talks.
Australia’s current target is a 26%-28% cut below 2005 levels, and the government has been planning to meet that (not very ambitious) target using carryover credits from the Kyoto period. Official government emissions projections released in December last year found Australia was not on track to meet the 2030 target unless it used the credits. Australia’s use of the Kyoto-era concessions has been strongly opposed by a large number of nations in international climate discussions, and experts say there is no legal basis for their use under the Paris agreement.
After Biden’s victory, Morrison used a speech to business leaders to signal, hey presto, magic happens: Australia might not deploy the accounting trick to help meet the 2030 target after all. The prime minister said: “My ambition is that we will not need them and we are working to this as our goal, consistent with our record of over-delivering.” The hint from Morrison was that new projections, expected to be released in December, will show Australia is on track to meet the promised cut without carryovers.
How can that happen?
In part, because the Australian government has not been great at forecasting future emissions and tends to substantially change its estimates each year.
Estimating future emissions is difficult. Each year, officials make assumptions about what will happen in 50 areas of the economy and come up with projections of how much will be emitted. For more than a decade, they have significantly over-estimated how much CO2 the country will emit in the years ahead before revising down the projections, sometimes significantly.
The biggest miscalculation has been in electricity generation. Renewable energy has come into the grid much faster than the government expected – the national 2020 renewable energy target was met ahead of time, state targets in Victoria and Queensland have started to have an impact and the cost of solar and wind energy continues to drop, making investment more attractive. Officials also overestimated how much grid electricity the country would use – demand has fallen, in part due to nearly a third of homes now having solar panels.
For reasons that are not clear, the official projections have assumed there would be less renewable energy in the system than the models used by the Australian Energy Market Operator, which runs the power grid. Addressing this will bring future projections down.
There are other anomalies. The projections do not factor in drought, which in recent years has reduced emissions from agriculture as farmers have had to substantially reduce cattle and sheep numbers.
Officials last year revised down the emissions forecast for the next decade by 344m tonnes. If a similar readjustment were to happen this year, it could lead to the government saying it was now on track to meet its modest 2030 target without the carryover credits.
Has anything else changed that could affect the projections?
The only new policy of note from the Morrison government this year has been its low-emissions technology roadmap. Released in September, it claimed developing five new technologies could “avoid” 250m tonnes of emissions a year by 2040.
There was been no explanation of how that number was reached, and with the arguable exception of “clean” hydrogen, the government has not yet committed significant new funding to develop the technologies. It is unclear how this policy could reasonably change the projections in a meaningful way.
More noteworthy is that, while the federal government has tried to slow the influx of solar and wind by neither continuing nor replacing the renewable energy target, the states keep stepping in to fill the gap.
The big one is the NSW plan to underwrite 12 gigawatts of new wind and solar over the next decade – a development that will be banked by Canberra as “progress” in terms of projected national emissions reductions, but also criticised by the federal energy minister, Angus Taylor, because it might bring forward the closure of coal plants, which is of course a necessary development if you are a government now wanting to trumpet a downward trend in emissions. You know it makes sense.
Would a lower emissions forecast be good news?
Lower emissions would, of course, be great. But if it happens it isn’t something we should get too excited about, for two reasons.
The first should be pretty obvious – the government will not have actually done anything yet. These are projections, not actual emissions.
Before Covid-19 hit, Australia’s national emissions remained stubbornly flat under the Coalition, having dipped only about 2% in the more than six years since it was elected. They will be lower this year due to the pandemic, but that is not something the government can claim credit for, and it may not continue.
The second reason is, as mentioned above, Australia’s target is nothing to crow about. It was a fudge from the beginning. The size of the cut – 26%-28% – was just a lift of the US commitment under the Paris agreement, with one notable difference – the Obama administration promised that target for 2025, while the Australian government pushed it back to 2030.
Getting to net zero emissions, as scientists say is necessary, isn’t just about the end goal. It’s about how much you emit as you get there. To play its fair part in meeting the goals of the Paris agreement, Australia can only emit so much over the next three decades.
Advice to the government in 2015 suggested playing its part would require a cut equivalent to between 45% and 65% by 2030. A recent analysis by analysts at the Climate Action Tracker found Australia’s fair share over that timeframe was 66%. The current target does not get the job done.
So will the government do more on climate?
It is not impossible, but it is far from guaranteed.
There will be pressure on Australia over the next year not only to set a target of net zero by 2050, but to go further by 2030 than promised. The US under Biden will be required to set a new target for that date and other major countries are expected to do the same. Dropping the plan to use carryover credits will not be enough to satisfy their expectations.
Apart from saying we can meet our (lowball) 2030 target without a Kyoto-era accounting trick (cue applause) there’s no sign at the moment the government is working up a higher 2030 target. It is working on a long-term climate strategy, which was a commitment under the Paris agreement. It was due this year, but has been pushed back to before the next major climate summit in Glasgow late next year. It is expected, but not guaranteed, to include modelling of what future action on climate will mean for Australia.
There are a couple of other policies in the works. The government has dumped a long-promised electric vehicle strategy and replaced it with the promise of a “future fuels” plan on hydrogen, electric and bio-fuelled vehicles, but it is not expected to deliver significant new commitments to accelerate an emissions cut.
Potentially more significantly, it has also said it will look at the safeguard mechanism, a Tony Abbott-era policy that was supposed to limit emissions from big industrial sites. So far, the scheme has barely justified its existence. Companies have mostly just been allowed to increase their CO2 limit, known as a baseline, and pollute more.
Presumably recognising this is not sustainable, the government earlier this year said it accepted a recommendation from a review headed by former Business Council of Australia president Grant King that the mechanism should be changed so that companies would be rewarded for cutting emissions below their baseline if they were undertaking “transformative” projects and not just producing less or shutting down. It sounds like a step back towards carbon pricing – rewarding cuts and, if the Coalition can stomach it, finally penalising increases in emissions.
Would the government go back to carbon pricing?
Morrison should use his political capital and his internal authority to drive a substantive change – but he won’t want to lose his job over it. Part of what’s going on with Morrison’s shift in language is the prime minister testing how much he can get away with: how positive can he sound about emissions reduction before the right of the Liberal party starts having a tantrum, or before the National party has a public meltdown because someone has whispered coal is not good for humanity after all? Think of Morrison as inching along a dimly lit ledge several stories above the ground.
But the rest of the world isn’t waiting for the Coalition to get its act together. Action on emissions is picking up elsewhere and at some point Australia will have to deal with rising CO2 from big industry and transport.
In the meantime, as the Bureau of Meteorology and CSIRO recently reported, climate change is already here and extreme weather events are getting worse.
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