Using Kyoto credits to meet Paris agreement 'misses the point': Garnaut
by Mike FoleyEconomist Ross Garnaut says Australia's reliance on 'carry-over credits' to meet its international emissions reduction pledge defies the spirit of the Paris agreement and will ultimately cost the economy more than taking decisive climate action.
Australia's commitment under the Paris climate agreement requires it to reduce greenhouse gas emissions by between 26 and 28 per cent by 2030.
The 185 signatory nations signed up to different individual targets by 2030, but share a longer term goal to hit net zero emissions by 2050.
Carryover credits refer to an accounting measure, where a country counts historical emissions reduction that exceeded old international goals against its current target.
Australia will include its carryover credits from its over-achievement on the Kyoto Protocol in its efforts to meet the Paris target. Most countries don't count their credits, with just Brazil, Russia and the Ukraine potentially following Australia's lead and arguing at the United Nations international climate talks in Madrid this week for their inclusion.
"Anything that keeps actual emissions in 2030 higher rather than lower will make achievement of the ultimate target more difficult and costly," Professor Garnaut said.
"That is a good reason why Australia should reduce emissions by much more than 26 per cent to 28 per cent, no matter what the rules are about the use of carryover of credits from earlier targets. The later you take action, the costlier it will be to reach zero emissions by 2050, as agreed at Paris."
"Within that framework, any technical point about using surpluses from earlier periods towards meeting our national target misses the point. The real point is whether we are on track for zero emissions by 2050."
Energy and Emissions Reduction Minister Angus Taylor last week released projections that for the first time forecast Australia was set to over-achieve on its Paris commitment by 16 million tonnes of carbon dioxide emissions (Mt CO2-e), with Kyoto carryover credits.
Australia's emissions need to fall a cumulative 695 Mt CO2-e by 2030 under the Paris target, including about 411 Mt CO2-e of carryover credits.
The Investor Group on Climate Change, representing institutional investors with over two trillion dollars of assets under management, including superannuation funds, is opposed to the use of carryover credits, which policy director Erwin Jackson said delay the "inevitable" transition to emissions-free industries.
Mr Jackson, who has observed international climate negotiations for 30 years, said the delay "just increases economic costs which come at a later date".
"Global markets are already shifting away from emissions-intensive goods and services. The government needs to make a choice, does it want a smooth transition to zero emissions, or does it want a path with delayed climate action and increased climate risk to the economy?"
Professor Garnaut's book Superpower argues Australia would be far better off if it pursued a swift transition to lower emissions and grow the renewable energy and low-emissions industries.
A spokesman for Mr Taylor said no country should be penalised for meeting its emissions targets, as they are a basis for greater ambition.
"Australia has an enviable record as a world leader in renewable energy investment; our projected 411 Mt CO2-e over-achievement of our Kyoto 2020 target; and our fully-costed plan to meet our Paris commitment," the spokesperson said.
The federal Energy Department attributed Australia's emissions progress to the growing contribution of large-scale renewable energy projects, growing use of rooftop solar panels and the government's $3.5 billion Climate Solutions Package. It forecast 51 per cent of the National Electricity Market will come from renewable energy by 2030.
"The government is developing a technology investment road map to identify the most efficient deployment pathways for new technologies, to ensure Australia can continue to capitalise on low-cost abatement opportunities," Mr Taylor said last week when the emissions data was released.
"Our commitment is achievable, balanced and responsible, and is part of coordinated global action to deliver a healthy environment for future generations while keeping our economy strong."