Australia’s Kyoto 2 target: shaking up our thinking

30 November 2012

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Frank Jotzo is Director of The Centre for Climate Economics and Policy at Crawford School, and director of the School’s Resources, Environment and Development program. He currently teaches the graduate courses Domestic Climate Change Economics and Policy and Issues in Development and Environment.

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FRANK JOTZO  of the Centre for Climate Economics and Policy analyses Australia's emissions target at the Doha climate conference.

At the Doha climate conference, Australia has submitted a 99.5 per cent emissions target for a second commitment period of the Kyoto Protocol. Why is Australia doing it, and what does it mean?

The big picture is that by taking part in a new Kyoto round, Australia can help build trust with developing countries. It is not a big part of the puzzle, but it still matters. Developing countries insist on the continuation of Kyoto beyond its first commitment period.

Even if only the European Union and Australia are sure to be on board, it still sends the right signal. China in particular has been adamant on the need for a second Kyoto period, even though its effect is likely to be dwarfed by the impact of China’s own domestic climate change policies that are underway and in preparation.

Of course, moderate emissions reduction commitments from a few developed countries are a far cry from effective global climate mitigation action. But without them, it is all the more difficult to argue that developing countries should act, and support those that do.

What does that number mean?

The 99.5 per cent “Kyoto 2” target refers to the average annual amount of emissions that Australia commits to during the eight years from 2013 to 2020, relative to the level in 1990. The 99.5 target was derived by drawing a straight line from Australia’s 108 per cent target under the first Kyoto period at 2010, to the emissions level at 2020 implied by the 5 per cent reduction target at 2020 (which is framed relative to year 2000).

This is illustrated here: (Notes on Figure: CP1 and CP2: First and second commitment period to the Kyoto Protocol. QELRO: Quantified Emissions Limitations or Reduction Objective (the average annual Kyoto target). Australia’s QELRO submission to the UNFCCC, November 2012 - http://unfccc.int/files/meetings/ad_hoc_working_groups/kp/application/pdf/awgkp_australia_qelro_26112012.pdf)

So the proposed Kyoto 2 target is consistent with Australia’s 5 per cent unconditional reduction target at 2020. This is supported by both the government and the opposition. It therefore comes as no surprise.

The question was how exactly it was going to be derived. Some other methods might have yielded a number above 100 per cent of 1990 emissions. That would not have made a material difference, but it might have been a “bad look” because of the framing as a small increase rather than as a small reduction, relative to the 1990 base year.

At first glance, the 99.5 per cent Kyoto 2 target does not look like much of a reduction. But it is a significant cut relative to today’s emissions levels, because emissions have grown since 1990. This is in contrast to Europe, where emissions fell between 1990 and now, in part thanks to industrial restructuring in Eastern Europe in the early 1990s.

And the target implies a significant cut from business-as-usual emissions, which would likely keep growing substantially if it was not for the carbon price and other policies to cut emissions. Government projections imply that Australia would import a substantial amount of emissions reductions units from developing countries and potentially Europe to achieve it.

On the other hand, achieving the national target might be easy due to a substantial surplus of emissions units from undershooting Australia’s Kyoto 1 target, and from accounting for forest management activities – see Andrew Macintosh’s analysis.

Importantly, in its submission the government explicitly mentions the possibility of moving to a more ambitious Kyoto 2 target, in line with its previous target range of up to 15 per cent or even 25 per cent reduction at 2020 relative to 2000. The 15 percent reduction target would translate into approximately a 93 per cent Kyoto 2 target.

Among the conditions for shifting our target are commensurate commitments and actions by other countries and an international agreement. Australia’s Climate Change Authority is to make a recommendation to government in 2014 about whether the national target should be strengthened.

An alternative to wrapping everything into a single national target number would be a two-track target: in addition to the “headline” national target for emissions, Australia could make a separate pledge to reduce emissions from any land-based activities that may not be included under the headline national target. Many types of land-based emissions are difficult to estimate, and it can be highly uncertain whether efforts to reduce them will be successful.

For example, the national headline target could be a percentage reduction in emissions (say 5 or 15 per cent), achieved through domestic reductions in the relevant sectors including energy, coupled with international purchases of eligible emissions units to make up the balance. In addition, a pledge (not a legally binding commitment) would be made to reduce land-based emissions by a given amount, say equal to 10 or 20 per cent of Australia’s total emissions.

The additional pledge could also include efforts to reduce emissions from deforestation in Indonesia and other developing countries (REDD+), to the extent that Australia might pay for achieving them. Government purchases were already foreshadowed in the original announcement of Australia’s conditional 25 per cent reduction target, but as part of achieving the headline target, not separately.

With a two-track target, Australia would not run the risk of missing the headline target if the land-based emissions reductions did not work out as planned. But it would get international recognition if successful under the pledge. That could allow for much greater ambition on land-based emissions than if wrapping them in under the headline target.

A two-track target is currently not even in the discussion. One reason may be that government would like to see any emissions reductions accounted for under the single national emissions target, and is hoping that land-based emissions reductions will make it easy to achieve Australia’s Kyoto 2 commitment – just like under Kyoto 1. Another reason may be that it would be a new and unusual form of pledge, which does not fit the template for developed countries in the UN negotiations.

Neither of these are good reasons for dismissing the idea of a two-track target. The thinking around international climate commitments could do with a bit shaking up.

This piece was originally published on The Conversation: http://theconversation.edu.au/australias-kyoto-2-target-shaking-up-our-thinking-11014

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