Analysis
By national science, technology and environment reporter Michael Slezak
The Morrison Government is surrounded by state governments, foreign trading partners, local businesses and big investors who are moving ahead to transition the world to net zero emissions by 2050.
The past few weeks have shown that Australia has only two choices when it comes to our climate-heating greenhouse gas emissions: sink good money after bad in polluting industries, or invest in the clean industries of the future.
As much as it might look like Australia is seeking one, there is no viable third option.
As the world strides ahead to try to stop global warming at 1.5C, Australia could risk being isolated and missing out on the opportunities the transition poses. Five years after Australia signed up to the Paris Agreement, the Australian Government is now surrounded by leaders making progress towards its aims — a task most would say Scott Morrison is not enthusiastically embracing.
A new incumbent in the White House and a reversal of US policy is just the start: Morrison will be dealing with a very different playing field in 2021.
A series of dramatic events over the past month have shown that a transition to net zero emissions will occur around 2050. A transition of that nature can either be done in a coordinated way — one that exploits the potential benefits — or in an uncoordinated way, which is likely to see few of the benefits but still be hit with downsides.
Just look at what our main trading partners are doing.
There's no doubt where our economy will go
China has committed to net zero emissions by 2060. China is our biggest overall trading partner, the biggest buyer of Australian thermal coal (taking about 20 per cent of all our exports), and the second biggest buyer of Australian gas (taking about 17 per cent of our LNG exports).
At about the same time, Japan and South Korea committed to net zero emissions even earlier — by 2050. Together, those two countries buy 33 per cent of our exported gas and 21 per cent of our exported thermal coal.
And looking at our top trading partners together, there's no doubt where our economy will go — by choice or otherwise.
| Country | Exports from Australia | Net zero goal |
|---|---|---|
| China | $150.5 billion | Net zero by 2060 |
| Japan | $52.8 billion | Net zero by 2050 |
| EU | $33.4 billion | Net zero by 2050 |
| South Korea | $25.1 billion | Net zero by 2050 |
| USA | $17.5 billion | Net zero by 2050* |
| UK | $15.6 billion | Net zero by 2050 |
| India | $10.8 billion | No commitment |
| New Zealand | $10 billion | Net zero by 2050 |
*Commitment made by president-elect Joe Biden. Sources: ABS and DFAT.
These massive transformations by Australia's trading partners mean changes will be imposed on our economy from the outside. Fossil fuel exports will dry up, tariffs could be placed on carbon-intensive products, and demand for clean energy will skyrocket.
Without guiding our economy towards those clean industries, and helping dirty industries transition, we're likely to be disproportionately affected by the downsides of this transformation.
In Australia, we don't have any robust federal policy to guide this transition in a meaningful way.
The Morrison Government's key policy is the so-called Technology Investment Roadmap. That policy doesn't have an emissions goal for Australia, and the bureaucrats that worked on it told Parliament last week they didn't have analysis showing how the policy would impact Australia's emissions by 2030.
In fact, in documents obtained by The Australia Institute, the Government admits the abatement expected under the roadmap is just a guess — it wasn't really modelled at all.
The modelling Australia has released shows no significant cuts to emissions to 2030.
And to meet our promise to cut emissions to 26 per cent below 2005 levels by 2030, forecasts show we will only get there by claiming credits for beating targets from earlier climate agreements — the so-called "Kyoto carry-over credits", the validity of which is widely questioned.
The Federal Government is on its own
It's not just Australia's trading partners leaving our Federal Government's position isolated. It's also our own state and territory governments.
Every single state and territory in Australia has declared they will aim to reach net zero emissions by 2050. So Australia does actually plan on doing that — the only thing we're lacking is federal coordination for how it will happen.
Among those states, the Liberal-National NSW government this month announced some of the strongest policies to reach that target. It plans to build a massive 12 gigawatts of renewable energy in the next decade, supported by two gigawatts of storage.
Also this month, the Liberal Tasmanian government passed a 200 per cent renewables target through the lower house.
Meanwhile, the Federal Government is also being left behind by Australian investors and big business. Most of Australia's five biggest super funds have committed to reducing the emissions of their investments to net zero by 2050.
Within the last month ANZ has committed to align its business to support a transition to a net zero economy and Woolworths (Australia's sixth-largest electricity user) committed to go 100 per cent renewable within five years. Even business groups like the Business Council of Australia and the Australian Industry Group support net zero by 2050 targets.
In the end, a federal net zero target for 2050 would carry little meaning on its own, since every jurisdiction within the federation already has that target. But if it was formally acknowledged by the Federal Government, it could help what really matters: guiding policies to help achieve the goal.
Politics, politics, politics
Emissions reduction minister Angus Taylor says the Federal Government does want Australia to reach net zero emissions "as soon as possible" and that it will happen before 2100.
In launching the Technology Investment Roadmap, Taylor argued that "long term targets without a plan" would "penalise energy-intensive industries and reduce economic activity".
He argued that other countries, "particularly our largest trading partners, are reluctant to commit to policies and targets with material economic costs".
That seems completely true. But what was not said was that those trading partners see great economic benefit in their much stronger targets and the policies that enact them.
It is no secret that climate policy has been a poison chalice for the federal Coalition and Labor alike, having claimed the heads of many leaders and prime ministers.
So it could be politically convenient to leave climate policy to the states, where governments of both political persuasions are getting on with the job.
Politically, that might let be win-win for the federal Coalition. But it leaves the federation without a coordinated approach — and a united front to show the world it's taking the global problem seriously.
States can do a lot of the work, albeit less efficiently. But there are some things they can't do. They can't themselves do what the UK and other countries are doing and plan a transition towards electric vehicles, for example.
They can't introduce fuel efficiency standards, helping Australia catch up to the rest of the world, while simultaneously reducing emissions and costs to consumers.
And they can't easily drive a shift away from a reliance on fossil fuel exports towards commodities that will still have a significant market in a decade or two.
When asked if he was worried about our fossil fuel exports, Taylor seemed relaxed, telling Sky News this week he was confident those commodities will have a market "for years to come" and that the mix of commodities "will change" but that "was natural".
But one can't help wondering if addressing that transition — and planning for it to happen — might be a better strategy than letting it happen to us.
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