The Morrison Government has for months argued Australia is on track to meet its international greenhouse gas emissions abatement targets “in a canter”.
The Morrison Government has for months argued Australia is on track to meet its international greenhouse gas emissions abatement targets “in a canter”.
In an interview on ABC’s Insiders, Energy Minister Angus Taylor said when the Coalition came to power it inherited a 755 million tonne emissions “deficit” needed to reach Australia’s second Kyoto target because Labor “hadn’t done the hard work”.
“We have turned that around by 1.1 billion tonnes,” Mr Taylor said.
“They [Labor] hadn’t got to the point where we were going to meet Kyoto. We will reach Kyoto in a canter.”
In the same interview, Mr Taylor said emissions are “coming down right now”.
Has the Coalition, through its “hard work”, turned around an emissions deficit inherited from Labor?
And is it correct to suggest emissions are heading down?
RMIT ABC Fact Check investigates.
Mr Taylor’s claim is misleading.
When the Coalition came to power in September 2013, the most up-to-date projections available were from a Department of Climate Change and Energy Efficiency report almost a year earlier.
The figures Mr Taylor cites are consistent with forecasts contained in that report and another released in December last year.
However, Mr Taylor’s characterisation is problematic.
First, the 2012 emissions data used by Mr Taylor was superseded by a new report three months after the Coalition came to power.
It found that actual emissions under Labor in 2013 were significantly lower than had been anticipated a year earlier.
Its forecasts also factored in estimates of abatement to be achieved by Labor’s carbon tax.
For this reason, Fact Check considers the 2013 report provides a more accurate, and less pessimistic, snapshot of the situation that the Coalition “inherited” from Labor.
In addition, the 2013 report accounted for a significant “carry-over” of emissions credits from Australia’s over-achievement of the first Kyoto period, which ended in June 2012.
The inclusion of the carry-over, which was not factored into the 2012 estimate cited by Mr Taylor, reflects an accounting assumption, rather than any “hard work” on the part of the Coalition in reducing emissions.
Furthermore, in 2012 and 2013 the department dramatically underestimated the extent to which electricity sector emissions would moderate.
As experts consulted by Fact Check noted, the unanticipated fall in electricity emissions was the result of rising wholesale prices for electricity, the closure of big, ageing coal-fired power stations in Victoria (Hazelwood) and South Australia (Northern and Playford), and investments in renewable energy.
Mr Taylor is not entitled to claim credit for emissions reductions achieved through state-based renewable energy incentives or through the closure of coal-fired power plants, given Coalition criticisms.
Changes to land use and the impact of floods and drought on agricultural emissions also had an impact.
The Coalition’s “Direct Action” emissions reduction fund also played a modest positive role, according to experts.
Meanwhile, emissions under the Coalition have risen for four of the past five years, and are higher today than they were in 2013.
According to the department’s latest predictions, they will be higher still in 2020, under current policy assumptions.
Australia has signed several international climate change agreements in recent years.
The first Kyoto target, adopted at a conference in Japan in 1997, aimed to keep Australia’s greenhouse gas emissions at 108 per cent of 1990 levels, on average, between 2008 and 2012. Australia did better than its target by 128 million tonnes.
A second Kyoto target, negotiated in Doha, Qatar in 2012, requires Australia to reduce emissions to 5 per cent below 2000 levels by 2020.
Finally, the Paris climate agreement, of December 2015, requires Australia to reduce its emissions to between 26 and 28 per cent below 2005 levels by 2030.
All the years referred to are Australian financial years, ending on June 30 of the year quoted.
Getting to the 2020 target
The second Kyoto target, referred to by Mr Taylor in his claim, relates to emissions in the year to June 2020.
According to the department, emissions would need to be 524 million tonnes in 2020 to reach the second Kyoto target of limiting emissions to 5 per cent below 2000 levels by 2020.
However, the department has not tracked Australia’s progress simply in terms of whether emissions have been falling towards that figure year by year.
Rather, it adopted a more sophisticated methodology, which is set out in Appendix A of its most recent emissions projections report, published in December 2018.
Its approach has been to chart a straight line from the middle of the first Kyoto period (2010) to the end of the second Kyoto period (2020) and measure the area underneath this line to create an “emissions budget” for the period 2013 to 2020.
The cumulative effect of this emissions budget is that Australia is limited to emitting almost 4.5 billion tonnes of carbon dioxide equivalent in total over the eight years up to and including 2020.
As the department explained in its 2015 emissions projections report, in some years Australia’s actual emissions could be higher or lower than the target budget for a particular year.
In terms of achieving the 2020 target, what matters — as the department see it — is whether cumulative actual emissions between 2013 and 2020 turn out to be 4.5 billion tonnes or lower.
The department periodically updates its forecasts for the period remaining until 2020, and uses these forecasts and actual emissions to date to measure Australia’s progress against the emissions budget for the eight-year period.
The figures Mr Taylor used in the Insiders interview correspond to figures produced by the department in forecasting and reporting on this progress against the cumulative emissions budget.
Did the Coalition inherit a 755 million tonne emissions ‘deficit’?
Mr Taylor refers to a 755 million tonne emissions “deficit” the Coalition “inherited” from Labor.
The most up-to-date forecasts for the second Kyoto period available at the time were contained in the Department of Climate Change and Energy Efficiency’s Australia’s emissions projections 2012.
This report was published in October 2012, three months into the first financial year of the second Kyoto period, 2012-13.
The department produced two forecasts for the eight-year period.
The first took into account the anticipated impact on emissions of the carbon price which had been introduced in July 2012 and covered some but not all sectors of the economy.
As for the second, the report said: “A scenario without the carbon tax has also been projected, which includes abatement from existing measures and the renewable energy target.”
Under the first scenario, with the carbon tax, the department’s “best guess” was that Australia would emit 4,929 million tonnes of carbon dioxide in the eight years to 2020.
This exceeded the target emissions budget of 4,482 billion tonnes by 447 million tonnes.
Under the second scenario, without the carbon tax, the department predicted that Australia would emit 5,237 billion tonnes, which exceeded the budget by 755 million tonnes over eight years.
This figure corresponds to the “deficit” figure used by Mr Taylor in his claim.
A new report released in December 2013 contained emissions figures for the 2012-13 financial year, as well as new forecasts.
It revised down the estimated emissions reduction task to 431 million tonnes over eight years.
This report shows emissions were substantially lower than had been anticipated in Labor’s last full financial year in office.
It also includes estimates of abatement achieved under Labor’s carbon tax, unlike the 2012 figure referred to by Mr Taylor.
This report, released three months after the election, provides a more appropriate snapshot of the situation that the Coalition inherited from Labor than the report relied upon by Mr Taylor, which was published 11 months before the election.
The impact of Labor’s carbon price
Labor introduced a carbon price in July 2012 and the Coalition repealed it two years later.
As noted, Mr Taylor’s claim that the Coalition inherited a 755 million tonne emissions deficit from Labor corresponds with a 2012 projection that does not include the anticipated impact of the carbon price.
His claim that the Coalition can take credit for “turning around” this deficit also fails to take into account the impact that the carbon price, a Labor policy, had on emissions in 2013 and 2104.
|2012 emissions forecasts and targets (Mt CO2-e)||2013||2014||2015||2016||2017||2018||2019||2020||2013-2020|
|Domestic emissions, without carbon price||611||620||634||648||666||678||687||693||5237|
|Domestic emissions, with carbon price||592||595||601||611||624||632||637||637||4929|
|Abatement challenge 2013-20, without carbon tax||27||44||64||84||109||127||143||155||755|
|Abatement challenge 2013-20, with carbon tax||9||19||31||48||67||82||93||100||447|
Source: Dept of Climate Change and Energy Efficiency, Australia’s emissions projections 2012
In the 2013 emissions projections report, the department did not make projections without a carbon tax.
As the report makes clear, in 2013 the total cumulative abatement task for the second Kyoto period was revised down from 755 million tonnes to 431 million after factoring in, among other things, 39 million tonnes of “projected abatement from the carbon tax and Carbon Farming Initiative in 2013 and 2014”.
“The cumulative abatement task projection takes into account … projected abatement resulting from two years of the carbon tax and Carbon Farming Initiative,” the report says.
The impact of the carbon tax on emissions in 2013 and 2014 had nothing to do with hard work on the part of the Coalition.
In fact, the Coalition was strongly opposed to the carbon price, which it repealed in July 2014.
The Kyoto carry-over
During the Doha climate conference, it was agreed that countries that completed the first Kyoto period with surplus emissions credits could carry those credits over into the second Kyoto period if necessary.
This led to concerns that some countries might use these surplus credits to increase their emissions while still meeting their international obligations.
At the 2015 Paris climate change conference, Denmark, Germany, the Netherlands, Sweden and the UK voluntarily gave up their surplus credits from the first Kyoto period.
It remains unclear whether other countries, including Australia, will be allowed to carry over surplus credits from the first two Kyoto periods to meet their 2030 Paris targets.
The “deficit” referred to by Mr Taylor in his claim corresponds with a 2012 projection that did not factor in any “carry-over” credits from the first Kyoto period, 2008-12.
Surplus credits were for the first time included in the department’s 2013 emissions projections, and have been factored in ever since.
The latest emissions projections report puts the “carry-over” from the over-achievement of the first Kyoto period at 128 million tonnes.
Hence, at least some of the “turnaround” referred by Mr Taylor, was produced by an accounting assumption not available in 2012.
Again, this did not represent “hard work” by the Coalition.
How accurate were the department’s projections?
The 2012 report clearly — and dramatically — underestimated the extent to which emissions would moderate, experts told Fact Check.
By the time the Coalition took office, emissions were already ahead of where they needed to be for Australia to meet its 2020 Kyoto target.
In Labor’s final year, Australia emitted 512 million tonnes of greenhouse gasses — significantly less than that year’s budget of 598 million tonnes.
This was also well under the department’s 2012 projections of 592 million tonnes (with the carbon tax) and 611 million tonnes (without it).
The following year’s emissions (520 million tonnes) were also well under the target figure (587 million tonnes) and the 2012 forecast figures (595 and 620 million tonnes).
Hugh Saddler, an honorary associate professor at ANU’s Crawford School of Public Policy, said it was “only just” becoming apparent in 2012 that electricity demand wasn’t growing rapidly.
“They suddenly did a mid-period, drastic reduction in demand forecasting,” Professor Saddler said. “Demand for electricity has been flat for a number of years.”
As new data for actual emissions became apparent, the department progressively become more optimistic about the total abatement that would be required to meet the 2020 target.
How the Government’s forecasts have changed
As previously noted, the department’s 2013 report revised down the estimated cumulative “emissions reduction task” to 431 million tonnes.
This included a carryover from the first Kyoto target, and took into account the impact of the carbon price.
It attributed the rest of the improvement to lower expected emissions from electricity and lower costs for wind and solar technologies, among other things.
In March 2015, the department again revised down the estimated abatement task over eight years, to 236 million tonnes.
This time it attributed the improvement to:
- lower electricity demand forecasts due to an increased uptake of household solar and higher retail electricity prices;
- worse than expected agricultural conditions due to drought;
- lower manufacturing output due to industrial closures;
- weaker coal production due to a drop in international coal prices; and
- two additional years of historic data.
In December 2015, the department again reviewed its estimates of the abatement task, predicting that Australia would beat the target budget for cumulative emissions between 2013 and 2020 by 28 million tonnes.
This time it attributed the improvement to lower emissions from the electricity sector as a result of the looming closures of “high emitting coal-fired power stations”, less logging and slower growth in emissions linked to coal mining, among other things.
In its December 2016 report, the department concluded Australia was on track to over-achieve on its 2020 target by 224 million tonnes, this time attributing the improvement to the closure of Victoria’s Hazelwood power station, lower electricity demand due to increased energy efficiency and lower-than-forecast emissions from land clearing.
According to the department’s latest estimate, Australia is now on track to emit 4.3 billion tonnes over the second Kyoto period.
Including the carryover from the overachievement of the first Kyoto period (and some minor adjustments for voluntary abatement, among other things), it now estimates Australia will overshoot the target by 367 million tonnes.
|2018 Projections||Emissions (Mt CO2-e)|
|Cumulative emissions 2013-20||4,269|
|Budget trajectory 2013-20||4,488|
|Emissions reduction task (adjusted)||-240|
|Carryover from 2008-12||-128|
|Emissions reduction task with carryover||-367|
Source: Dept of the Environment and Energy, Australia’s emissions projections 2018
The following chart compares the department’s data for actual emissions and forecast emissions against the “target trajectory”, as envisioned in 2012 and in 2018.
As can be seen from the graph, in 2012, the department expected Australia’s emissions to exceed the target trajectory (straight line) with and without a carbon tax over the eight year Kyoto period.
The 755 million tonne deficit referred to by Mr Taylor is represented by the area between the straight line and the upper line, which represents expected emissions without a carbon tax in place.
With a carbon tax, the expected cumulative abatement task, as envisioned in 2012, was smaller, at 447 million tonnes.
This is represented by the area between the straight line and the middle line.
Have emissions fallen under the Coalition?
Australia’s greenhouse gas emissions rose from the mid-1990s to peak in 2007.
Between 2008 and 2013 emissions trended down. From 2014 onwards, following the repeal of Labor’s carbon tax, emissions have generally risen.
In 2018, Australia produced 534 million tonnes of carbon dioxide equivalent, up 4.3 per cent from 512 million tonnes produced in 2013.
According to the most recent official forecasts, emissions will rise to 540 million tonnes in 2020, after a small dip in 2019.
The latest quarterly figures show emissions fell 1.4 per cent during the three months to September 2018 in seasonally adjusted terms.
The department attributed this fall to the lowest quarterly emissions from the electricity sector in over a decade.
It said reduced emissions from diesel consumption across transport, agriculture and mining also played a part.
Following the September quarter improvement senior members of the Coalition government, including Mr Taylor and Environment Minister Melissa Price, asserted that emissions under the Coalition are now “going down”.
As can be seen in the above graph, and as pointed out by experts, quarterly fluctuations are not unusual.
However, emissions have generally trended up in quarterly terms since about 2013, the year the Coalition came to power
Over the year to the September quarter, emissions grew by 0.9 per cent, an increase the department mostly attributed to higher LNG exports.
Can the Coalition take credit for the revised forecasts?
The director of the Climate Change Institute at the Australian National University, Professor Mark Howden, said there had been a “relatively steady” increase in greenhouse gas emissions since 2013 under the Coalition’s policies.
“Prior to this they were in a relatively sharp decline from about 2008,” Professor Howden said.
“The Government’s own recent quarterly greenhouse gas emissions report shows that unadjusted emissions continue to go up.
“The seasonally-adjusted emissions show a minor turn down (there is always variability so this cannot be interpreted as a trend) due to, amongst other things, reduced agricultural activity due to the drought”.
“Interestingly, it has been argued that the drought has fingerprints of climate change in it and so part of the minor adjusted downturn may be linked to climate change.”
Grattan Institute’s Tony Wood said while the figures cited by Mr Taylor were accurate, the Coalition had no basis to claim it had “turned around” an emissions deficit inherited from Labor.
Mr Wood said while the Coalition’s Direct Action policy (and its associated Emissions Reduction Fund) provided abatement at a reasonable cost, “and I give them credit for that”, the dramatic improvement in the emissions outlook had also occurred because of various changes the Coalition had been against, such as the closure of the Victoria’s Hazelwood power plant, state renewable energy targets, and, to some extent, legacy reductions from Labor’s carbon tax.
Professor Saddler said Mr Taylor’s statement was a meaningless one.
He said at least part of the decline in emissions from electricity generation could be attributed to changes put in place by the former Labor government.
This article was published by ABC News on the 11th of April 2019.
Principal researcher: Josh Gordon, Economics and Finance Editor