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Appendix B Global action to reduce greenhouse gas emissions

Appendix B1 Countries’ climate action: targets and policies

Emissions goals are one measure of international action on climate change. Policies to support targets are another. This appendix describes countries’ national and international emissions reduction goals, and introduces the range of climate policy measures in place in key countries.

B1.1 2020 and post-2020 emissions reduction goals

Most countries have set climate goals out to 2020 (Table 4.2). Many countries have also set medium or long term goals beyond 2020, as set out in Table 4.4.

These goals take different forms and, as discussed in Chapter 4, the Authority has not discriminated based on the form of goals. Some are structured and legislated commitments. For example:

  • The United Kingdom has a series of binding carbon budgets under its Climate Change Act for the period 2008–2027. The carbon budgets are designed to work towards an emissions target of 80 per cent below 1990 levels by 2050.
  • Germany has also legislated possible pathways towards a 2050 goal, of 40 per cent reductions by 2020, 55 per cent in 2040, 70 per cent by 2040 and 80–95 per cent in 2050 (all compared with 1990 emissions levels).

Other countries, including Australia, have included a long term target in legislation, and are now planning possible trajectories towards this goal. These countries include New Zealand, with a target of 50 per cent below 1990 levels by 2050, and the European Union, with a target of 80–95 per cent below 1990 levels by 2050. Japan also has a 2050 target of 80 per cent below 1990 levels included in its Fourth Basic Environment Plan.

A final group of countries has pledged specific post-2020 targets, but not included these in legislation. These countries include Norway, which has committed to achieving carbon neutrality, reducing global greenhouse gas emissions by the equivalent of 100 per cent of its own emissions by 2050 at the latest (or 2030, conditional on increased global action).

Some countries have recently begun to consider post-2020 goals in the context of negotiations on the new global agreement on climate change. Notably, the European Union is evaluating its 2030 targets – a public consultation process on 2030 targets concluded in July 2013, and it plans to release a climate and energy strategy to 2030 in late 2013.

B1.2 Climate change policies and measures

To achieve their goals, countries are implementing a range of climate change measures. These policies include carbon pricing, energy supply and energy demand measures, vehicle standards and action to address land-based emissions. Table B.1 shows an illustrative sample of climate measures in different categories for key countries.

Table B.1: Sample climate change policies and measures in key countries

 

Policies and measures

Country

Carbon pricing
(tax, emissions trading scheme)

Energy supply

Energy demand

Mandatory vehicle standards

Land-based activities, including agriculture and forests

Australia

Carbon pricing mechanism under current legislation

Renewable energy target

State-based feed-in tariffs for renewable energy

Appliance and building standards

State-based energy efficiency schemes

None. Has effective carbon pricing through differences in fuel tax credits for some transport

Carbon Farming Initiative

 

China

Pilot emissions trading schemes planned for seven provinces and cities. The first began in 2013.

Plans to design a national emissions trading scheme or carbon tax

Renewable energy target

Feed-in tariff support for solar, wind and biomass power

Closure of inefficient small- and medium- sized coal plants and industrial facilities

Appliance and building standards

Energy efficiency target

Industrial energy efficiency retrofits

Vehicle fuel efficiency standards

Vehicle emissions standards planned

National reforestation efforts to meet forest coverage target

United States

Sub-national emissions trading schemes in California and nine north-eastern states (the Regional Greenhouse Gas Initiative)

 

Sub-national renewable energy targets

Financial incentives supporting renewable energy

Proposed national regulations limiting emissions from fossil fuel power plants

Appliance and building standards

Industrial energy efficiency assessments

Vehicle fuel efficiency standards

Vehicle emissions standards

Renewable fuel production incentives

Support for voluntary action to reduce emissions and increase carbon sequestration

European Union
28 member states

Emissions trading scheme

Renewable energy target and support for cogeneration – jointly generating heat and power

Feed-in tariffs for renewable energy

Appliance and building standards

Energy efficiency target

 

Vehicle emissions standards

Renewable fuel production incentives

 

EU strategy to improve soil management, including as a carbon sink

Land-sector management

Landfill emissions control

India

Small coal tax of about A$0.8 per tonne

Energy efficiency trading scheme for power sector

Renewable energy targets

 

Energy efficiency trading scheme for power sector

 

Vehicle fuel efficiency standards

Vehicle emissions standards pending

Energy efficiency initiatives extend to the land sector; for example, providing subsidised or free pumps

Japan

Carbon tax on fossil fuels

Sub-national emissions trading schemes in Tokyo and Saitama, voluntary federal scheme

Renewable energy target

Feed-in tariffs for renewable energy

Energy efficiency standards and measures in residential, commercial and building sectors

Vehicle fuel efficiency standards

Tax incentives for purchase of lower emission intensive vehicles

 

Covered under Japan’s domestic offsets scheme

Indonesia

Considering market-based mechanisms for emissions reduction in selected sectors

Renewable energy target

Tax exemptions for energy-efficient technologies

Energy intensity target

Vehicle emissions standards

Measures to reduce forest deforestation and degradation through regulations and market-based offsets

Canada

Sub-national cap-and-trade in Quebec

Sub-national taxes and duties on fossil fuels

Standards for coal-fired electricity generation from 2015

Renewable energy incentives

Remote renewable energy generation incentives

Appliance and building standards

Industry energy efficiency incentives

 

Vehicle emissions and standards and efficiency programs

Renewable fuel production incentives

 

Sub-national offset mechanism in Alberta and Quebec

Republic of Korea

Emissions trading scheme to start in 2015

Renewable energy target

Appliance and building standards

Vehicle fuel efficiency and carbon emission standards

 

South Africa

Carbon tax to start in 2015

Renewable energy target

Tax incentives and feed-in tariffs for renewables

Energy efficiency demand-side management programs for residential, commercial and buildings

Tax incentive for energy efficiency

Vehicle emissions standards

Greenhouse gas emission tax for new vehicles

Focus on adaptation in agriculture

New Zealand

Emissions trading scheme

Stationary energy covered under the New Zealand emissions trading scheme

Appliance and building standards

Commercial and residential energy efficiency schemes

None. Liquid fuels covered under the New Zealand emissions trading scheme

Sustainable Land Management and Climate Work Program covers land management sectors

Norway

Part of European Union emissions trading system

Broad-based domestic carbon tax

Renewable energy target

Support for cogeneration

Appliance and building standards

Energy efficiency target

Renewable fuel production incentives

Vehicle emissions standards

 

Note: Table B.1 is not comprehensive. The existence of a policy or measure does not reveal its effect on emissions; the same type of policies have varying degrees of ambition and effectiveness across countries.
Germany and the United Kingdom are covered by all European Union Policies and measures and also have additional nation-specific policies.
Sources: All information sourced from countries’ National Communications to the UNFCCC; submissions to Partnership for Market Readiness; national government websites; Globe International; World Bank and International Energy Agency policies and measures database

Appendix B2 Data and assumptions for comparing 2020 targets

How Australia’s 2020 targets compare with that of other countries is an important and difficult question. This appendix considers some of the assumptions and limitations involved in comparing Australia’s targets to those of other countries that underpin the analysis in Chapter 5.

In choosing data and a method to compare emissions targets, considerations include:

  • limitations on comparing targets expressed in different ways; and
  • assumptions around the ‘base year’ or defined common reference year for targets.

The measures used in Chapter 5 provide guidance on the relative ambition of countries’ targets; however, these are not comprehensive or conclusive, either singularly or together. Many factors influence how ambitious a target is, including the level of development, population growth, access to technology, and industrial base and natural resource endowments.

Each measure requires different data and assumptions to be made. Table B.2 provides a summary. Any of these assumptions can alter the results for each measure. The absolute change requires data on historical emissions. Per person emissions require these figures and also assumptions on population growth. Emissions intensity requires data on historical GDP and assumptions on future GDP. Business as usual (BAU) is the most complex and requires a range of assumptions, all of which are contestable.

Table B.2: Assumptions required for comparing countries’ emissions targets

Form of target

Absolute emissions target

Emissions intensity target

Target relative to BAU

Metric for comparison

 

 

 

 

Absolute change in emissions

(No assumptions needed, as target framed in this metric –only conversion to common base year necessary)

Assume GDP growth rate

Assume BAU emissions trajectory

Change in per capita emissions

Assume population growth rate, apply to absolute change in emissions

Change in emissions intensity

Assume GDP growth rate

(No assumptions needed, as target framed in this metric)

Assume BAU emissions trajectory and GDP growth rate

Reduction in emissions relative to BAU

Assume BAU emissions trajectory

Assume BAU emissions trajectory and GDP growth rate

(No assumptions needed, as target framed in this metric)

 

Source: Adapted from Jotzo 2010

The Authority has used high quality and consistent information for as many as countries as possible. An obvious limitation with using a large number of countries to compare Australia’s targets is the difficulty in finding accurate and comprehensive data for all countries.

Australian data is generally sourced from Australian government sources including the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education (DIICCSRTE) and Treasury. Data for other countries is from a range of sources. For instance, emissions are from the United Nations emissions inventory database (for Annex I Parties) and the Climate Analysis Indicators Tool (CAIT) database (other remaining countries). The risk of using multiple sources is minimised by using data from credible sources that cover most of the countries and any assumptions made are clearly identified in the analysis.

B2.1 The challenge of business as usual

A change from BAU emissions is one measure for comparing countries’ targets in Chapter 5 (Figure 5.3). BAU assumptions are also required to translate targets defined in terms of BAU to other measures (Table B.2).

Defining BAU emissions is controversial and different definitions can lead to substantially different quantitative estimates. Previous work considering targets against BAU scenarios has attempted to grapple with the contestability of using BAU (see Jotzo 2010 and Pew Center 2011). Jotzo (2010) notes the International Energy Agency and Energy Information Administration reflect the continuation of existing policies into the future and exclude potential future policies. This means countries’ BAU emissions levels will be significantly lower than a BAU scenario that removes the effect of existing climate change policies irrespective of whether the existing policies were maintained.

The Treasury and DIICCSRTE 2013 modelling is used for figures 5.1–5.4 in Chapter 5 to compare countries’ 2020 targets with their projected BAU levels as estimated from the GTEM reference case, and the domestic no price scenario from MRRF is used for Australia. This allows for greater confidence, as each country’s BAU projections are based on the same set of assumptions. This analysis is limited to only those countries included in the modelling, which means a smaller set of countries than used in the rest of Chapter 5.

The Republic of Korea’s national BAU projections are used to estimate its 2020 target because it is not separately identified in the modelling and it has a target relative to BAU.

In some cases, differences in national BAU projections can arise from countries proposing higher BAU levels. This would then help to make it easier for the country to meet its target. Den Elzen et al. (2013) show that most national BAU projections of developing countries are higher than those estimated by external sources.

B2.2 Choice of base year

A common base year or starting point must be chosen, as countries have framed their targets against different base years. Australia has used 2000 levels (converted to 1990 for the second commitment period of the Kyoto Protocol); 1990 is used by many of the European countries; while China, India and the United States have chosen 2005. The Authority has chosen 2005 as a base year for the analysis in Chapter 5.

Depending on their circumstances, the perceived strength of different countries’ targets will look different depending on the base year. This is because different base years affect the weight given to past effort versus future effort. Earlier base years capture changes that have occurred in the past. This might be emissions growth (for example, due to rapid economic growth) or contraction (possibly due to economic collapse or climate change policies). Taking these factors into account may be particularly justified for countries that, like Australia, have taken on previous commitments from 1990, as they have already accepted the need for action from this point. On the other hand, later base years give a better indication of the future level of effort necessary to achieve the target.

For example, if Australia was to match the US 2020 target of 17 per cent reduction on 2005 levels, the equivalent level depends on whether a base year of 2000 or 2005 is used. For a 2000 base year, the equivalent Australian target is about 20 per cent; whereas for a 2005 base year, the target is about 10 per cent. This is because Australia’s emissions grew between 2000 and 2005, while US’s emissions remained relatively flat. Therefore, Australia’s target requires a higher percentage change from 2000 levels than the US’s but less of a change from 2005 levels.

Appendix B3 Climate action within and outside the United Nations Framework Convention on Climate Change

The United Nations Framework Convention on Climate Change (UNFCCC) is a major component of international action on climate change. This appendix contains a list of its achievements. Increasingly, a range of international climate initiatives are driving climate action around the world. This appendix also examines some of these initiatives.

The Kyoto Protocol, under the UNFCCC, allows countries to meet their targets through the use of market-based mechanisms, including the Clean Development Mechanism (CDM) and Joint Implementation (JI). The CDM allows emission reduction projects in developing countries to earn certified emission reduction (CER) credits, which can be used by countries to meet their Kyoto Protocol targets. For example, Australian firms could purchase CERs from projects in a country that does not have a Kyoto Protocol target, such as China. JI is similar to the CDM but the units – known as emission reduction units (ERUs) – are generated from countries with Kyoto Protocol targets. For example, JI units generated from Australian Carbon Farming Initiative (CFI) projects can be sold to other countries to meet their Kyoto targets. For both market mechanisms, projects to reduce emissions from a BAU baseline are proposed by developers, and then reviewed independently by an international body. If the project is approved, credits are granted equal to the amount of emissions avoided because of the project. Countries have agreed to continue CDM and JI in the context of the Kyoto Protocol second commitment period, which runs from 2013–2020.

The UNFCCC is also exploring new market mechanisms to encourage the development of carbon markets globally for the post-2020 climate agreement.

Australia has a particular influence in the UNFCCC through its role chairing the Umbrella Group – one of the major negotiating blocs including the US, Russia, Canada, Japan and Norway. Australia is also a founding member of the Cartagena Dialogue for Progressive Action, a group of developed and developing countries committed to working together to resolve negotiating deadlocks and drive progress in the UNFCCC.

There are many layers of climate action outside the UNFCCC, and the number of climate initiatives has grown rapidly in the past few years. International cooperation on climate change now includes broad-based international initiatives, as well as partnerships that target sectors, gases, activities or subnational areas. Countries negotiate on climate issues in several multinational forums, including the Major Economies Forum and the Group of 20.

Examples of different activities, complementary to the UNFCCC, are set out in Table B.3. Australia is part of all of these initiatives (Table B.4).

Box B.1: UNFCCC achievements

  • All countries have agreed in the UNFCCC to work together to prevent dangerous climate change. A global goal has been agreed of holding the increase in average global temperatures to below 2 degrees above pre-industrial levels. A review of this goal in 2013–2015 will consider strengthening this goal to 1.5 degrees.
  • There have been two commitment periods of the Kyoto Protocol, an instrument set up under the UNFCCC to set emissions reduction targets for developed countries. In parallel, 99 countries have made pledges under the UNFCCC to reduce or limit their emissions.
  • At the Conference of the Parties (COP) in Durban in 2011, Parties agreed to work towards a new ‘protocol, another legal instrument or an agreed outcome with legal force under the Convention’ (UNFCCC Dec 1/CP.17). This will be applicable to all countries and is intended to be negotiated by 2015, with effect from 2020. The details of the new agreement, including its legal form, what it will contain and how it will differentiate between countries, remain to be negotiated.
  • The UNFCCC has encouraged better data collection, reporting and transparency of countries’ emissions. All countries have measurement, reporting and verification requirements, and most are up to date with their reports. Annex I countries, including Australia, have more stringent requirements than other countries. The least developed countries receive financial and technical support to help them meet their requirements and build their capacity.
  • At the UNFCCC Doha Conference in 2012, Parties agreed to limit the use of ‘carryover’ – surplus emissions credits from the first commitment period of the Kyoto Protocol. The non-governmental organisation Germanwatch has estimated that this decision reduced global emissions by about 300 Mt of carbon dioxide equivalent (CO2-e), more than half Australia’s annual emissions.
  • The UNFCCC has created a global market for emissions offsets, the Clean Development Mechanism (CDM). This began in 2006, has registered more than 1,650 projects and is anticipated to produce offsets amounting to more than 2.9 billion tonnes of CO2-e to the end of 2012 (United Nations Framework Convention on Climate Change 2013). Participation in the CDM has allowed some countries to build their domestic capacity to take climate action.
  • The UNFCCC has created a mechanism to reduce emissions from forestry activities in developing countries. The REDD+ mechanism (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries) aims to address the approximately 17 per cent of global emissions from forest activities (United Nations 2009).
  • Through the UNFCCC, many developing countries have been given support for their mitigation and adaptation activities. From 2010–2012, developed countries agreed to provide US$30 billion in ‘fast-start’ climate finance. Australia pledged $599 million as its share of this global effort and has delivered on this commitment. There is also agreement to long term financing for developing countries’ climate actions, with Annex I countries collectively agreeing to provide US$100 billion by 2020 from public and private sources in the context of mitigation action from developing countries.

Table B.3: Significant international initiatives for climate change complementary to the UNFCCC

Organisation

Started

Number of members

Activities

International Civil Aviation Organization

1944

191 member states

A specialised United Nations Agency, regulates air transport, potentially including emissions from international air transport.

International Maritime Organization

1948

177 member states

A specialised United Nations Agency, regulates international maritime transport, including setting maritime pollution standards.

Montreal Protocol on Substances that Deplete the Ozone Layer

1987

196 member states

An international treaty to protect the ozone layer by phasing out ‘ozone- depleting substances’, many of which also cause climate change. There are also ongoing negotiations to cover further greenhouse gases (hydrofluorocarbons) under this treaty.

Global Methane Initiative

2004

41 partner states and private sector partners

An international public–private initiative to promote methane reduction and recovery and use of methane as a clean energy source in agriculture, coal mines, municipal solid waste, oil and gas systems, and wastewater.

C40 Cities Climate Leadership Group

2005

58 affiliated cities, including Sydney and Melbourne

An international group focused on sharing knowledge and technical expertise between cities. It promotes climate best practices in areas such as waste management, emissions accounting and procurement policy.

Group of 20 (G20)

2008

19 countries and the European Union, plus invitees

The G20 is focused on dialogue on financial and economic issues, but discussed climate change in advance of the 2009 COP, and could do so again in the lead-up to the UNFCCC new agreement.

Major Economies Forum on Energy and Climate

2009

17 countries, all large emitters

Forum promotes candid dialogue among major developed and developing economies to support the UNFCCC negotiations, explore initiatives and joint ventures to lower emissions, including building energy efficiency.

Global Green Growth Institute

2010

18 founding members

An initiative led by the Republic of Korea to promote green growth in developing countries, including by improving national economic planning to better incorporate environmental and climate objectives.

Climate and Clean Air Coalition

2012

33 countries plus 36 non-State Partners including the World Bank and the United Nations Environment Programme

Scaling up rapid action to reduce ‘short-lived climate pollutants’ – substances such as soot, methane and some refrigerants (hydrofluorocarbons). The Coalition focuses its efforts across a range of sectors including the global oil and gas industry, waste sectors, heavy-duty diesel vehicles and engines, and brick production.

The World Bank Partnership for Market Readiness

2012

29 developed and developing countries

Builds countries’ capacity to develop domestic carbon market instruments including carbon taxes and emissions trading.

Supports countries through technical workshops, policy dialogues and virtual knowledge platforms on essentials such as data management, measurement, reporting and verification systems, and policy and regulatory frameworks, as well as financial support.

Helps countries create effective enabling environments for private sector action on climate change.

Sources: All information sourced from each initiative’s website

Table B.4: Membership of selected international climate initiatives

Country

ICAO, IMO, Montreal Protocol*

Global Methane Initiative

Global Green Growth Institute

Climate and Clean Air Coalition

C40 (Cities)

G20

Major Economies Forum

Partnership for Market Readiness

Australia

China

 

 

United States

 

 

European Union

Some states

India

 

 

Japan

 

Indonesia

 

 

Canada

 

Republic of Korea

 

South Africa

 

 

New Zealand

 

 

 

 

 

 

Norway

 

 

*International Civil Aviation Organization; International Maritime Organization. Germany and the United Kingdom are represented in most international bodies through the European Commission.
Sources: All information sourced from each initiative’s website

These initiatives have different success rates. For instance, the Montreal Protocol on Substances that Deplete the Ozone Layer has been one of the most successful international initiatives to reduce greenhouse gas emissions. The Protocol was designed to reduce the production and consumption of ozone depleting substances in order to protect the ozone layer. As well as damaging the ozone layer, many of the gases are potent greenhouse gases. Since the Protocol was agreed on 16 September 1987, the atmospheric concentrations of the gases covered by the Protocol have either decreased or levelled off.

With universal ratification (the only environmental treaty to be ratified by all countries), the Protocol has set mandatory timelines to phase out ozone-depleting substances, including chlorofluorocarbons, halons and hydrochlorofluorocarbons. These timelines have been strengthened five times since the Protocol started, and new gases have been added to its ambit. A number of countries including Australia have pressed for the regulation of hydrofluorocarbons – substitutes for many of the covered gases, with high climate impacts – but this has not yet occurred.

By contrast, global efforts to regulate emissions from ‘bunkers’ – global shipping and aviation – have been slow. Emissions from international aviation and maritime activities are currently not counted toward individual country emissions or targets under the UNFCCC. In 2010, the International Energy Agency (2012) estimated emissions from the maritime sector at 644 Mt CO2 and 455 Mt CO2 for the aviation sector. Both have nearly doubled in the last 10 years. Discussions to reduce emissions from these sectors occur in the International Maritime Organization and the International Civil Aviation Organization.

Overall, initiatives outside the UNFCCC allow countries to exchange practical ideas about reducing emissions and include:

  • research and development into low-emissions technologies, such as carbon capture and storage, renewable energy and approaches to reduce emissions from agriculture;
  • commitments to reduce or phase out fossil fuel subsidies including under the G20;
  • linking of emissions trading schemes, such as the EU and Norway, and proposed links between California and Quebec, and Switzerland and the EU; and
  • bilateral and regional agreements targeting particular areas of climate change policy; for example, carbon markets through the World Bank Partnership for Market Readiness or hydrofluorocarbons through the Climate and Clean Air Coalition.