CLIMATE CHANGE ACTION PLAN www.alp.org.au 1
Climate change action plan Climate change is an intergenerational challenge that requires an intergenerational response. Our approach to post-2020 pollution reduction targets has followed a clear and logical sequence of decision making: Labor accepts the science that limiting global warming to less than 2 degrees Celsius is necessary to avert dangerous climate change. Our commitment to limiting global warming to less than 2 degrees Celsius requires Australia to be a net zero emissions economy by the middle of the century. To achieve this 2050 target, Labor will consult on the Climate Change Authority s 2030 baseline target of a 45 per cent reduction in carbon pollution on 2005 levels. The science on climate change is clear, and is well established. More than 2,000 scientists from over 150 countries that participate in the IPCC process have found the human influence on the climate system is clear, and recent emissions of greenhouse gases are the highest in history. Today s CO2 concentration is higher than it has been for at least 800,000 years. Extreme temperature events used to cover 0.1 per cent of the earth now they cover 10 per cent. This means longer droughts in parts of Australia, broken by more damaging floods, more frequent bushfires and more severe storms. Beyond the flashpoints of these events there are the creeping, incremental consequences: A massive decline in agricultural production especially in the Murray Darling Basin; Irretrievable damage to the Great Barrier Reef; Widespread shortages of urban water supply, extreme spikes in global food prices; Increase in heat-related deaths and increased airborne disease; Heightened instability in the coastal megacities of our region; and A surge in the displacement of people in steadily submerged islands adjacent to Australia. A 1.1 metre rise in the sea level, would mean $226 billion worth of commercial, industrial, road, rail and residential assets around Australia s coasts would be damaged by flooding and erosion. From 2020 onwards, the predicted increase in drought frequency is estimated to cost Australia $7.3 billion annually - reducing GDP by 1 per cent, per annum. Heatwaves have killed more Australians than any other natural disaster and deaths are projected to double over the next 40 years in Australian cities. And this will only be part of it, as Australia is hit with hundreds of millions of dollars in increased health costs: respiratory and cardiac conditions in particular. Earlier this year, the respected Medical Journal, Lancet, declared climate change a medical emergency. It warned, if we don t act, we will undermine all the good progress made in public health in the last half-century. The world s leading scientists have repeatedly warned that global warming of 2
2⁰C or more above pre-industrial levels will result in irreversible and catastrophic consequences. And Australia has accepted the goal of limiting global warming by no more than 2⁰C in its commitments under the United Nations Framework Convention on Climate Change. At the COP21, over 190 parties are participating, with 171 parties covering 96.8 per cent of the world s territorial emissions having submitted pledges for action post-2020. Despite these global commitments, the UK Met Office has estimated that the world has already warmed over 1⁰C from pre-industrial levels. The time for action is now, and it must be achieved by countries decarbonising their economies and making a fair contribution to the international effort. Australia is more exposed It is in Australia s national economic interest to ensure there is action on climate change. Impact of climate change The CSIRO has said that the current warming of 1⁰C is already costing the nation. We are already seeing significant challenges to the Great Barrier Reef impacting tourism, increased annual rainfall variability and dangerous water shortages. On top of that, there are higher fire risks through changes in temperature, more heatwaves impacting our health, dangerous water shortages and large areas of agricultural land taken out of production. Additionally, because our population is highly concentrated around the coast, expected severe damage to coastal infrastructure and settlements will impact on our way of life. Economic diversification The Climate Institute has noted that weak action on climate change is bad for the economy. Many nations are taking actions today to limit emissions and modernise their economies through clean energy and other investments. By resisting this, we incur higher costs of transitioning later. A high emissions intensive economy in the long-run is economically reckless. Australia is the 13th largest emitter of greenhouse gases and our emissions per person are among the world s highest. We need to get on with diversifying and de-coupling our economy, separating emissions growth from economic growth. In a world where countries are moving to reduce pollution, our high emissions intensity represents clear business risks volatility in key input prices, changing demand in global markets, growing momentum around the world to cut fossil-fuel subsidies as budgets become stretched and renewables increase in cost competitiveness. As more and more nations take action on climate change, it will not be long before a lack of climate policy is an obstacle to trade deals. In fact, it is entirely possible that trade negotiations will mandate an effective price on carbon, or border tax adjustments may start to be applied to ensure a level trading field. 3
Opportunity cost We risk missing out on the global mega-trend towards clean energy technologies and renewable energy. In 2014, clean energy investment grew in China (32 per cent), the US (8 per cent), Japan (12 per cent), Germany (3 per cent) and the UK (3 per cent). At the same time, renewables investment dropped by 35 per cent in Australia. In fact, investment in largescale renewable energy actually fell 88 per cent from over $2 billion to around $240 million. Since this Liberal Government was elected, the ABS has found that about 15 per cent of jobs in the sector have vanished. The race for the investment and jobs in renewable energy is no longer just in developed economies. With low establishment and exit costs, the pursuit for more skilled workforces means that the race for attracting investment dollars will be increasingly competitive. Australia s current policy In August, the Liberal Government announced the emissions reduction targets it will take to the Paris conference: 26-28 per cent by 2030 on 2005 levels. Scientists have said that this target is relatively weak, and is not enough to avoid warming of more than 2⁰C. This target means we would still be the highest per capita polluter among developed economies in 2030. We would have an economy is more emissions intensive than Canada, the United States, Japan, Germany and the broader European Union. Our rate of emissions reduction to 2030 would be slower than those major economies as well. Change from 2005 UK -61% Switzerland -51% Germany -45% Norway -44.5% US -35 to -39% EU -34% Canada -30% New Zealand -30% Australia -26 to 28% Japan -25% Sources: CCA, c2es Australia s international reputation is at risk as a result of these targets. As the Melbourne Sustainable Society Institute recently observed: our major trading partners and allies are doing more on climate change policy than Australia; taking a more comprehensive and innovative approach and showing more vision. 4
On top of these inadequate targets, the Government doesn t have a policy capable of delivering any meaningful reduction in emissions. In the past two years, this Government has: Abolished a price on pollution; Abandoned an Emissions Trading Scheme; Slashed the Renewable Energy Target; Cut funding to carbon capture and storage; Cut funding to climate change adaptation programs in the Pacific; and Tried to abolish the widely-respected Climate Change Authority, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency. Emissions are going up. Leading modeller Reputex has said that even accounting for the Government s current Direct Action policy, Australia will still see a 15 per cent increase in national emissions through to 2030. Analysis by The Climate Institute shows that if the total amount announced for the Liberal s Emission Reduction Fund ($4.95b) was used to purchase carbon reduction, it would fall well short of its targets. With the average price of the first two auctions at $13.12/t, the total funding allocated to the program would achieve a miserly 3.5 per cent of Australia s total emission reductions out to 2030 The Liberals policy doesn t set a cap on pollution or use a market mechanism to efficiently reduce carbon pollution. Labor s approach Labor will be guided by the best science when it comes to climate change. Labor has never accepted the spurious argument that hanging at the back of the pack, waiting for all other counties to act before we did, was the right course of action. Put simply, effective action on climate change is in our self-interest as a nation, and in line with our standing as a global citizen that will pull its weight. That is why Labor will pursue real carbon pollution reduction targets to decarbonise our economy, to position Australia to be a global leader in renewable energy, and fairly contribute to the international effort. Labor will reduce emissions through the best available pathway and in the most economically efficient way and will have the only policy which caps emissions. Labor has a substantial renewable electricity generation goal, an internationally linked Emissions Trading Scheme (ETS) and a suite of energy efficiency and transition measures underpinned by a scientifically robust carbon reduction target. We will secure the policy goal of decarbonising the economy while protecting key 5
economic and trade sectors as well as important sectors like agriculture. We ensure that the emissions intensive, trade exposed (EITE) sectors and agriculture remain globally competitive. The Parliament held a common view on these matters in 2007, and only one vote in the Coalition party room denied the Parliament a unified position on an ETS in 2009. We believe Australia can return to common political ground on economy wide decarbonisation measures. In so doing, we create the conditions for sustainable, secure and enduring market-based policy. Labor will establish a series of incentives in the economy that drive innovation encouraging new technologies, and ensuring that our economy charts the most efficient pathway to decarbonisation. Labor s policies - including the ETS will be developed on the basis of specialist advice. These matters can only be resolved on the basis of market solutions and specialist advice, which the public service will provide should we return to government. This approach will secure the policy goal of decarbonising the economy while protecting key economic and trade sectors. It also creates market for optimal renewable technology development and investment. Evidence for action The Climate Change Authority s Final report on Australia s future emissions reduction targets confirmed that the major benefits to Australia of action on climate change was that: 6 avoidance of the adverse social, economic and environmental impacts of dangerous climate change. It is clearly in Australia s interests to strive towards this outcome: in doing so Australia would be playing a responsible international role in helping to reduce global emissions and, simultaneously, acting to protect vital interests of current and future generations of Australians. In addition, the transition to a low carbon world now underway carries with it the prospect of benefits of the more conventional kind new technologies, skills, investments, industries and jobs for Australia and other countries with the foresight and wit to seize these opportunities. Labor accepts the Climate Change Authority s view, and the recommendations have been central to the development of Labor s long term ambition and our approach to the medium term targets. Targets Australia s international commitment to limiting global warming to less than 2 degrees Celsius will require the decarbonisation of the economy by 2050. Limiting the temperature increase to 2 degrees Celsius requires transitioning our
economy to a point of no longer adding new emissions to the atmosphere. Put simply, increasing net emissions adds to global warming. Therefore stopping the warming means no longer adding new emissions (or offsetting new emissions through sequestering or abatement). Achieving this position has wide support in Australia with the Australian Climate Roundtable a group comprising the Business Council of Australia, Australian Industry Group, Australian Council of Trade Unions, Australian Council of Social Service, The Climate Institute and the Australian Conservation Foundation pledging support for a net zero emissions economy by the middle of the century. Internationally Unilever s CEO Paul Polman and Indian businessman Ratan Tata have called for a net zero global carbon economy by 2050. ClimateWorks modelling and analysis shows that Australia can achieve net zero emissions by 2050 and live within its recommended carbon budget, using technologies that exist today, while maintaining economic prosperity. Major technological transitions are needed in some industries and many activities, but no fundamental change to Australia s economy is required. Economic activity and Australian incomes keep rising. The economy grows by 150 per cent to 2050, while net emissions fall to zero and energy sector emissions are reduced by more than four fifths. The technologies required for decarbonisation are currently available or under development. Ongoing commercialisation, enhancement and integration will improve their cost competitiveness and performance. Experience with technological change, such as the rapid fall in costs of solar cells seen in recent years, suggests that there will be upside opportunities. The analysis shows that deep decarbonisation requires neither substantial lifestyle changes nor large changes in Australia s economic structure. Australia retains its international advantage in primary industries including mining and agriculture. While some technologies and activities decline, others expand and contribute to continued economic growth. Australia s rich renewable energy resources provide the opportunity for Australia to be an energy superpower in a world where clean energy dominates. Together with substantial potential for geological sequestration and vast land available for carbon forestry, this creates economic opportunities for Australia in a decarbonised world. 2030 Target Transitioning Australia to a net zero emissions economy by 2050 requires a decarbonisation pathway. This pathway will have a number of milestone targets to ensure that Australia is ontrack, to assess Australia s progress and to re-calibrate government policies accordingly. A reduction of 45 per cent by 2030 is the baseline recommended by the Climate Change Authority, the independent body established to advise the Parliament on climate change, and it is the positon that Labor will consult on with business, community groups and stakeholders. 7
Decarbonising the economy will be an ongoing, evolving process. As technologies advance, and certain sectors make the significant investments to transition (e.g. the energy sector), the form of abatement will change. But it is clear that a net zero emissions economy by 2050 require a 2030 target that sets Australia on the right path, and kick-starts significant elements of the transition in the coming decade. This is consistent with our renewable energy policy of 50 per cent by 2030 that will shift the mix of Australia s energy to cleaner forms of generation. The introduction to the Government s modelling undertaken this year by Warwick McKibbin - states that the Australian economy is expected to grow strongly to 2030 regardless of whether Australia adopts a post 2020 target. The modelling demonstrated that the impact of a target to reduce emissions by 45 per cent would not be markedly greater than lower targets. It estimates that a 45 per cent target would see Australia s economy grow by 23 per cent over the decade 2020-2030, compared to 23.6 per cent under the Liberals 26 per cent target. With a 45 per cent target, Australia grows more strongly that Japan, Europe and Canada over the period 2020-2030. Recent CSIRO modelling showed that these conclusions on growth are likely to be conservative given that as we approach 2030 emissions growth and economic growth will become increasingly decoupled (in other words, lower emissions growth will not necessarily come at the expense of lower economic growth). While higher targets impact consumption in the economy, McKibbin finds that there is a substantial, positive impact on investment. Sources: McKibbin Software Group, Economic Modelling of Australian Action Under a New Global Climate Agreement, Final Report, 20 August 2015 Five yearly pledge and review Experts, the environment sector and vulnerable nations strongly advocating for five 8
year pledge and review arrangements. This enables countries to assess their progress towards long term targets, and to adjust commitments over time. In recent times, business groups (BCA and AiGroup), environmental groups and the Association of Small Island States have called on five yearly pledge and review processes. UK, US, China and France have also proposed this. A Shorten Labor Government will implement a five yearly pledge and review mechanisms. What we will do in consultation Labor will conduct a consultation process to determine our final target, using the Climate Change Authority s baseline target of a 45 per cent reduction on 2005 levels. This consultation will be led by the Shadow Minister for the Environment and Climate Change and relevant Shadow Ministers and will report to the Leader and the Shadow Cabinet by March 2016. This consultation will involve business and their representative organisations, community groups, unions and other organisations. The consultation will consider matters such as the impact of such a target on our broader decarbonisation agenda, sectoral strategies to reduce emissions, and the consequence for jobs and particular regions and impacts on households. The consultations will take into account environmental effectiveness and economic efficiency, competitiveness of Australian industry including energy security and targeted industry assistance, improved pipeline of investment certainty and supporting Australia s international obligations. Underpinned by a framework approach Labor will take a framework approach in our policy development. This allows our policies to be appropriately calibrated and responsive to economic circumstances, while also meeting the trajectory for the long term goal. This approach will be developed to minimise impacts on households and industry. Labor has already outlined key elements of our approach: An internationally linked ETS; A goal of 50 per cent of Australia s energy generated from renewables by 2030; and Electricity Modernisation Plan to assist the transition of companies, workers and communities in the power sector move to less emissions intensive industries. In addition, we will progress national improvements to energy productivity. Australia has consistently rated well below OECD average for energy productivity (or efficiency). Australia would need to increase its EP by 56 per cent by 2030 to reach the OECD average assuming no change in the OECD. 9
A Shorten Labor Government will seek to implement national goal on energy productivity including: vehicle emissions standards and building standards There are also significant opportunities in the land sector in general and in the land clearing area in particular to reduce emissions. Labor has already announced that existing contracted ERF projects will be honoured. Moreover, other measures can be considered to prevent further land clearing in Queensland. It is proposed that these broad areas form the basis for consultation. 10
Authorised by G. Wright, Australian Labor Party, 5/9 Sydney Ave, Barton ACT 2600. 11