Out of time Australia's emissions budget, its 2020 target and the 'ambition gap' - Peter Christoff

 
Out of time Australia's emissions budget, its 2020 target and the 'ambition gap' - Peter Christoff
Out of time
Australia’s emissions budget, its 2020 target
and the ‘ambition gap’

                                                                 Peter Christoff

                                                              MSI Report 13/8
                                                                   May 2014

                                                www.monash.edu/sustainability-institute
Published by the Monash Sustainability Institute
The Monash Sustainability Institute (MSI) delivers solutions to key sustainability challenges through
research, education and action. For government, business and community organisations, MSI is a
gateway to the extensive and varied expertise in sustainability research and practice across Monash’s
faculties and research institutes.

MSI Report 13/8, May 2014
ISBN: 978-0-9875677-1-0

Author
Associate Professor Peter Christoff
Visiting Fellow, Monash Sustainability Institute, Monash University
Department of Geography (Faculty of Science), University of Melbourne.

Citation
To be cited as: Christoff, P. (2014) Out of time: Australia’s emissions budget, its 2020 target and the
‘ambition gap’, MSI Report 13/8, Monash Sustainability Institute, Melbourne, Australia.

Contact
Associate Professor Peter Christoff
Department of Resource Management and Geography
University of Melbourne
E: peterac@unimelb.edu.au

Disclaimer
Monash University disclaims all liability for any error, loss or consequence which may arise from relying
on any information in this publication.

Cover image
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Out of time

          Australia’s emissions budget,
                  its 2020 target
             and the ‘ambition gap’

                        Peter Christoff

  Visiting Fellow, Monash Sustainability Institute, Monash University
Department of Geography (Faculty of Science), University of Melbourne.

                      peterac@unimelb.edu.au

                            May 2014
Summary
This paper considers what would be an appropriate 2020 national target for Australia to commit to at
Paris in 2015.

For global average warming to be held below 2 degrees Celsius will require a massive international
effort, especially from countries such as Australia. To date Australia has taken a ‘wait and see’
approach to mitigation, looking for progress in international talks and leadership from other states.

Australia’s current 2020 target of -5% below 2000 emissions levels is weak when compared to the
efforts of almost all other developed nations and represents an inadequate contribution to the
overarching goal of restraining climate change.

Australia’s contribution to global warming is substantial by international comparison, its responsibility
                                                     th
for action is also great. Australia is the world’s 12 largest national emitter of greenhouse gases. It
contributes 1.3 per cent of total global emissions – or around 4 per cent, if its trade in embodied
emissions is taken into account. It is among the world’s highest emitters for per capita emissions and
the highest among developed countries.

Developed countries like Australia must cut emissions while fairly accounting for their historical
responsibility for climate change and the economic advantages this has delivered them. Without
equitable burden sharing, developing countries – particularly major emerging emitters such as India,
upon which successful global mitigation in part depends – will continue to stall the development of an
effective and timely international agreement.

Scientists warn that existing national pledges are insufficient to hold warming to 2°C or less, leaving
an ‘ambition gap’ of 14–24 Gt CO2-e (global annual emissions) which must be bridged by 2020.

To help bridge this gap, in a way that reflects Australia’s responsibilities for global warming and its
technological and economic capabilities, its 2020 target should be no less than -48 per cent below
2000 levels by 2020.

National emissions budgets can be calculated to indicate what each state must do to contribute to a
reasonable chance of holding global average warming to less than 2°C and the safer goal of less than
1.5°C.

If Australia were to contribute to a global target with 75 per cent likelihood of holding warming to
below 2°C, Australia’s national emissions budget most likely will be exhausted by 2015. Effectively,
when it comes to living within its emissions budget, Australia is out of time.

Even the minimum equitable target of -48 per cent target for 2020 would see Australia ‘overshooting’
its national emissions budget for 2020 by some 3 billion tonnes by 2020. There appears no viable way
for Australia to avoid going into ‘carbon deficit’. It therefore should initiate a program to buy
international carbon permits to compensate for this domestic ‘overshoot’.

Australia’s current climate policy proposes higher national targets (of -15% and 25%), conditional on
the progress of international negotiations. Such ‘conditionality’ assumes that Australia’s conditional
offer of greater mitigation effort will encourage greater cooperation by other parties and induce them
to adopt more stringent targets.

Nothing about the progress of negotiations to date supports this assumption. Indeed, strong unilateral
initiatives by individual states are increasingly important in framing the level of ‘courage’ at the
international level. In addition, delayed action will also only increase Australia’s future mitigation and
adaptation costs. These points support arguments for stronger immediate and unconditional domestic
mitigation targets.

Last, it is economically and technologically feasible for Australia to cut its emissions by at least -48
per cent by 2020. Domestic mitigation measures can encourage greater energy efficiency and growth
in renewable energy based on available technologies. At the same time Australia could meet a
significant proportion of its emissions reductions burden by buying international carbon credits. (This
is separate from the need to acquire credits to cover its emerging carbon budget deficit).

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                           1
Introduction
A new international agreement will be negotiated at the meeting of the Parties to the United Nations
Framework Convention on Climate Change (UNFCCC) in Paris at the end of 2015. This agreement is
intended to cover all major emitting economies. This paper considers what should be an appropriate
2020 national target for Australia to commit to in 2015.

Australia’s Climate Change Authority (CCA) recently completed its Caps and Targets Review (CCA
2014). In its final report, the Authority recommended a minimum 2020 emissions reduction target
of -19 per cent below 2000 levels (by adding Australia’s carryover under the Kyoto Protocol to its
recommended target of -15 per cent), a national carbon budget, and an indicative national emissions
trajectory that may extend beyond 2020. It discussed how Australia might meet its trajectory, budget,
target and caps, including how different sectors contribute, and the role of international emissions
trading.
           1
This paper responds to the CCA’s key recommendations about Australia’s target for 2020, as a
contribution to the ongoing discussion about Australia’s appropriate future mitigation effort.

The CCA Review addressed four issues, namely:

    •   the science-related aspects of global emissions budgets, pointing to the overall level of
        emissions reductions required to limit warming to 2°C;

    •   approaches to sharing global emissions budgets among nations;

    •   a 2020 emissions reduction target for Australia, and caps for the first five trading years of the
        carbon pricing mechanism, as further steps towards Australia meeting its longer term goals;
        and

    •   how Australia might meet its trajectory, budget, target and caps, including how different
        sectors contribute to emissions reductions, and the role of international emissions trading.

This paper also addresses these concerns. It accepts the findings of climate science about ongoing
global warming, about the profound threat this warming poses to the planet’s and Australian
ecosystems, communities and economies, and about the need for urgent action to address that threat
(Christoff 2014; IPCC 2014; Schellnhuber 2013).

International agreements have enshrined the shared aim and commitment to keep global average
warming below 2°C above preindustrial levels. In December, 2009, at the Copenhagen Conference of
the Parties to the UN Framework Convention on Climate Change (COP 15), nation states were
encouraged to submit national pledges for reducing greenhouse gas emissions by 2020.
Subsequently, 42 developed and 44 developing countries submitted pledges.

A year later, at Cancún, parties formally recognised those national pledges and also recognised “that
deep cuts in global greenhouse gas emissions are required ...so as to hold the increase in global
average temperature below 2°C above pre-industrial levels... [as well as] the need to consider...
strengthening the long-term global goal on the basis of the best available scientific knowledge,
including in relation to a global average temperature rise of 1.5°C” (UNFCCC 2010).

Australia also endorsed this aim and, consequently, its targets and actions should be assessed
according to whether or not they contribute to the intended outcome.

However average global warming of even 2°C is dangerous for many countries, including Australia
(Braganza et al. 2014; Whetton et al. 2014), where the economic, social and ecological impacts of
such warming – and associated ocean acidification - will be profound. There is growing concern that
even lower levels of warming may trigger ‘tipping points’ that will produce irreversible changes and
considerable harm and disruption to human and other systems. This paper therefore argues that a

1
 This paper revises the author’s submission, for the Monash Sustainability Institute, to the 2013 CCA Caps and
Targets Review. AT: http://consultation.climatechangeauthority.gov.au/climate-change-authority1/submissions/3

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                                2
2020 target that preserves the possibility of holding (or in future reducing) warming to levels lower
than 2°C, is critical to limit risks to human security.

The paper proceeds as follows. It first considers broad principles for target setting. It then discusses
the global carbon budget and the ‘ambition gap’ that stands between present pledges and the chance
of keeping average global warming to below the ‘guardrail’ of 2 degrees Celsius. It then turns to
aspects of Australia’s current approach to the 2020 target and concludes by proposing a 2020 target
and a short-term national carbon budget.

Principles for determining emissions targets
The Climate Change Authority (CCA 2013; CCA 2014) notes that, according to its enabling Act
Climate Change Authority Act 2011 (Cwth), it must have regard to:

‘S.12 (a) the principle that any measures to respond to climate change should:

        (i) be economically efficient; and

        (ii) be environmentally effective; and

        (iii) be equitable; and

        (iv) be in the public interest; and

        (v) take account of the impact on households, business, workers and

                communities; and

        (vi) support the development of an effective global response to climate

                change; and

        (vii) be consistent with Australia’s foreign policy and trade objectives;

        (b) such other principles (if any) as the Authority considers relevant.’

                                                                                    (Comm.Aust. 2011, 7)

Although the principles presented in the Act are not prioritised, they nevertheless must be interpreted
in a way that ensures the Act’s environmental intent is not undermined by other considerations.
Principles of ‘economic effectiveness’, ‘impacts on households etc’, and ‘consistency with Australia’s
foreign policy and trade objectives’ are necessarily subsidiary to the principles of environmental
effectiveness, and equity, upon which they ultimately depend.

By contrast, this paper proposes that the guiding principles for target selection should be hierarchical
and interrelated. In other words, Australia’s climate targets should:

    1. Reflect the best available climate science with regard to the goals and pace of mitigation

    2. Be consistent with efforts to limit global average warming to less than 2°C above preindustrial
       levels

    3. Be equitable with respect to international burden sharing of mitigation effort, taking into
       account Australia’s historical emissions profile (‘polluter pays’ principle), its national economic
       wealth and capacity (‘beneficiary pays’ principle’), and the equal right of individuals to the
       global atmospheric commons (‘per capita emissions rights’ principle)

        and

    4. Be technologically feasible.

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                          3
Article 3.1 of the United Nations Framework Convention on Climate Change (UNFCCC) enshrines the
need for Parties to protect the climate system ‘on the basis of equity and in accordance with their
common but differentiated responsibilities and respective capabilities’. The clause reflects a
longstanding but inconclusive debate about how a fair mitigation burden for individual nations might
be determined, and interrelated concerns about equity, responsibility and capacity. What it should
mean in practice remains uncertain.

Political and academic debates over responsibility have focused on national contributions to the
accumulated atmospheric store of greenhouse gases since the start of the Industrial Revolution. In
part they revolve around the deliberate versus unconscious and unintended use of the global
atmospheric commons. Some developed states have argued that the lack of understanding of climate
                                        th
science before the latter part of the 20 Century limits national responsibility for the impacts of climate
change and for economic redistribution to assist in mitigation and adaptation funding to that period
when the science enabled the issue to be recognised. By contrast, developing states have
emphasised that the long history of appropriation of the atmospheric commons by industrialised
nations has resulted in an infringement of their ‘sovereign right to develop’, and that developed states
bear a responsibility for the climate damage they have wrought even if this was done unintentionally.

A separate argument about responsibility applies to national actions since 1990, the date when the
first IPCC report was published, providing an incontrovertible baseline for scientific and political
acknowledgement of climate change as an international issue.

Arguments about ‘climate debt’ and ‘climate justice’ are tied to debates over the economic wealth and
capacity which have accrued to developed states pursuing a path now largely closed to ‘late’
developing states – namely that of seemingly limitless fossil fuel-based industrialisation. Developed
states are seen to have enriched themselves through their disproportionate use of the global
atmospheric commons and to have contributed overwhelmingly to global warming impacts that
disproportionately afflict poorer communities and states.

Calls for the redistribution of this wealth, and assertions about the additional responsibilities of
developed nations to take the first steps in mitigation, are based on what is sometimes called the
‘beneficiary pays’ principle. This principle is reflected in the architecture of the UNFCCC and Kyoto
Protocol, with their grouping of Parties based on development status – for instance, using the Annex 1
and non-Annex 1 lists.

At the same time, calls for developed countries to contribute significantly to the costs of adaptation by
developing countries are justified through the climate version of the ‘polluter pays’ principle – whereby
those who are responsible for the damage (climate impacts) are liable to pay for remediation.

Claims about the uneven benefits and costs of climate change are often founded on the egalitarian
view that individuals have equal rights to ‘shares’ in the atmosphere. This is often called the ‘per
capita emissions rights’ principle. According to this view, at minimum, future access to remaining
emissions ‘space’ should be equally shared on a per capita basis. The ‘contraction and convergence’
model would allow developing states to increase or stabilise their emissions while major developed
country emitters make considerable reductions, all converging at an equal per capita emissions level
that is environmentally stable.

These considerations have, in combination, led to a plethora of arguments, claims, and formulae for
how mitigation and adaptation effort and costs should best be apportioned to reflect equity, historical
responsibility, development and capacity, and nominating how the remaining limited quota of
atmospheric emissions should be shared (see Baer et al, 2008; Gardiner 2010; Heywood 2007;
Hohne et al. 2003).

Depending on where the ‘baseline’ for historical responsibility is set, or the future point of
convergence is established, developed states owe more or less to developing states. And depending
on whether and how carbon rights are accorded to individuals or states, more or less of that fossil-
fuelled development is ‘owed’ by and to specific states.

This paper accepts the contract and convergence model as the most equitable means of dividing up
the remaining atmospheric commons. In other words, it does not propose a new way to determine
Australia’s economic responsibility for mitigation and adaptation assistance based on its historical
responsibility for climate change. Rather, it draws on the model proposed by Baer et al. (2008) as it

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                         4
calculates and compares Australia’s emissions budget and possible targets under each of these
models.

The Global Emissions Budget
In recent times, climate scientists have gone beyond nominating a global temperature guardrail or a
target concentration of atmospheric greenhouse gases – such as 450 parts per million of CO2 –
above which the risk of dangerous anthropogenic interference with the climate system seems to
become intolerably high. Instead, they now offer a more policy-useful estimation of the physical
amount of greenhouse gases that might be released into the atmosphere before dangerous climate
change begins to occur. This amount has been termed the global emissions budget.

For instance, in 2009, the German Advisory Council on Global Change (WGBU) argued that, ‘It is
estimated that the ‘budgetary limit’ for a reasonable chance of staying below 2°C will be reached
when approximately 1 trillion tonnes of CO2 have been added to the amount already in the
atmosphere at the start of the 21st century.’ Further, the WGBU argues that ‘the budget of CO2
                                                                                                         st
emissions still available worldwide could be derived from the 2°C ‘guard rail’. By the middle of the 21
century a maximum of approximately 750 Gt CO2 (billion metric tons) may be released into the Earth’s
atmosphere if the guard rail is to be adhered to with a probability of 67%. If we raise the probability to
75%, the cumulative emissions within this period would even have to remain below 600 Gt CO2’
(WGBU 2009, 2).

Other estimates suggest that ‘limiting cumulative CO2 emissions over 2000–2050 to 1,000 Gt CO2
yields a 25% probability of warming exceeding 2°C – and a limit of 1,440 Gt CO2 yields a 50%
probability – given a representative estimate of the distribution of climate system properties’
(Meinshausen et al. 2009, 1158). Meinshausen et al. (2009, 1159) suggest if the acceptable
exceedance probability were only 20% (8–37%), this would require an emission budget of 890 Gt CO2
or lower for the period 2000–2049. 2

More recently, Olivier et al. (2012, 18) note that – by 2012 - human activities had already added some
420 ± 50 billion tonnes of CO2 to the atmosphere since 2000. By various estimates, annual
anthropogenic global greenhouse emissions rose to approximately 50.1 Gt CO2-e in 2010 (UNEP
2013, xi).

In all, some 200 Gt of greenhouse emissions are likely to have been released by human activity since
the WGBU report and Meinshausen et al. (2009), reducing their estimates of the available global
emissions budget (if the emissions form 2000 are also included) to less than 500 Gt CO2.

In other words, we have a global emissions budget of at most only:

    •   another 500 billion tonnes of CO2 if we wish to have a better than 75 per cent chance of
        keeping warming to below 2°C and avoiding “dangerous climate change”,

    •   390 billion tonnes of CO2 for if we wish to have a better than an 80 per cent chance of
        keeping warming to below 2°C, and

    •   much less still for the safer goal of holding warming to 1.5°C or less.

We have used half or more of our remaining global emissions budget in 14 years. At current
emissions rates we stand to exhaust our global CO2 emission budget sometime in the next decade
(depending on an accepted probability of no more than 20% for exceeding 2°C). Exceeding this
budget will make it increasingly difficult – or impossible – to hold to the 2°C degrees limit.

Most discussions about the ambition gap between current pledges and targets, and those required to
hold warming to below this guard rail – including the one which follows – do not take this into full
account and assume a much higher risk level for exceedance or ignore the problem altogether.

2
  Meinshausen et al. also note that ‘the cumulative Kyoto-gas emission budget for 2000–50 is 1,500 Gt CO2-e, if
the probability of exceeding 2°C is to be limited to approximately 25 per cent’ (Meinshausen et al. 2009, 1160).

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                                  5
The ‘ambition gap’
As already mentioned, at Copenhagen in 2009 and subsequently formally at Cancun in 2010, the
international community agreed to hold average global warming to below 2°C Celsius above
preindustrial levels. Developed nations and major industrialising countries – including Australia - then
pledged voluntary national mitigation targets for 2020 (UNFCCC 2011, 2012). These pledges fall well
short of what is required to hold to that ‘2 degrees guardrail’, much less a safer target of 1.5°C.
Climate scientists have determined that the collective mitigation effort embodied in those pledges
would still lead to global average warming of around four degrees and catastrophic climate change.
This deficit in international effort is now commonly called the ‘ambition gap’.

The ‘ambition gap’ can be given some quantitative precision by estimating a global emissions budget
that defines the maximum additional amount of emissions that still may accumulate in the Earth’s
atmosphere if we are to have a chance of staying below 2°C. Since 2009 a range of estimates has
been published seeking to describe that ambition gap. Over that period, estimates of the gap have
increased in size in response to the continuing growth in annual emissions. The most recent credible
estimate is published in the UNEP 2013 Emissions Gap report, the fourth in a series of annual
reassessments of this problem produced for the United Nations Environment Program.

Annual global emissions are estimated most likely to be approximately 59 Gt CO2-e by 2020 under a
business-as-usual scenario based on actual existing mitigation efforts. This may fall to 54 Gt CO2-e
by 2020 (range of 52–56 Gt CO2-e) given current mitigation pledges (UNEP 2013, xii).

For a “likely” chance of meeting the 2°C target, emissions have to peak before 2020, and return
                                                                                                   3
emission levels in 2020 to a median level of 44 Gt CO2-e (range: 38–47 Gt CO2-e) (UNEP 2013, xii).
This implies an emissions gap of 8–12 Gt CO2-e per year in 2020 assuming full implementation of
          4
pledges.

Further, the UNEP Emissions Gap 2013 report comments that ‘it is highly uncertain whether the
conditions currently attached to the high end of country pledges will be met. Therefore more probable
than not that the gap in 2020 will be at the high end of the 8 to 12 Gt CO2-e range’ (UNEP 2013, xii).

By contrast, Meinshausen et al. (2009, 1161) estimate that annual global emissions of the Kyoto-
listed gases must fall to 30 Gt CO2-e by 2020 for an approximately 80 per cent chance of keeping
warming to below 2°C. This alternative estimate suggests the emissions gap, given current mitigation
pledges, is around 24 Gt CO2-e in 2020. Note, however, that this estimation is based on calculations
made before global aggregate emissions began to rise again in 2009.

Scenarios consistent with a “medium” chance of constraining warming to 1.5°C above preindustrial
levels would require even lower emissions. The UNEP report suggests that based on a limited
number of new studies, least-cost emissions pathways consistent with the 1.5°C target have an
emissions levels in 2020 around 40 Gt CO2-e (37–44 Gt CO2-e) (UNEP 2013, xii). This implies an
emissions gap of at least 14 Gt CO2-e per year in 2020 assuming full implementation of pledges.

As Raupach et al. (2011) comment, there are numerous critiques of these global temperature
guardrails, including that the 2 Celsius global guardrail is too general to account for significant
regional differences in environmental sensitivity – and so, for instance, would leave low-lying coastal
regions and island states submerged, and fire- and drought-prone countries ecologically devastated,
over time.

Importantly, the UNEP report notes that:

3
  The emission scenarios assessed in that report and consistent with a “likely” chance of meeting the 2°C target
require global emissions in 2030 of approximately 35 Gt CO2-e (range: 32–42 Gt CO2-e).
4
  The ambition gap under a scenario in which states pursue unconditional pledges but with lenient rules, would
be about 13 Gt CO2-e in 2020 (range 10–16 Gt CO2-e) (UNEP 2013). For “Conditional pledges, strict rules” –
which seems highly unlikely to be achieved by 2020 – the gap would be about 8 Gt CO2-e (range: 4–11 Gt
CO2-e).

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                                  6
scenarios consistent with the 1.5° C and 2° C targets share several characteristics: higher-
   than-current emission reduction rates throughout the century; improvements in energy
   efficiency and the introduction of zero- and low-carbon technologies at faster rates than have
   been experienced historically over extended periods; greenhouse gas emissions peaking
   around 2020; net negative carbon dioxide emissions from the energy and industrial sectors in
   the second half of the century and an accelerated shift toward electrification (UNEP 2013, xiii).

This paper supports a ‘conservative’ mitigation path which leaves both the 2°C and 1.5° global target
options open. Therefore it accepts, based on the Meinshausen et al. study (2009), that the gap given
current mitigation pledges and the emissions level consistent with a “likely” (approximately 80%)
chance of staying within the 2°C target but also still with a chance of holding warming to 1.5°C, would
be around 24 Gt CO2-e – especially if we are to avoid a reliance on unavailable technologies for
achieving negative emissions. It also employs the UNEP 2013 report’s estimated emissions gap of 14
Gt CO2-e per year in 2020 as a lower estimate for the same intended outcomes.

Both the ‘global emissions budget’ and the ‘ambition gap’ approach to estimating quantitative limits to
greenhouse emissions can be utilised in estimating national emissions budgets, to provide a means
for scoping appropriate national mitigation effort.

Calculating national emissions budgets
As the CCA 2013 Issue Paper notes, there is a variety of ways in which a national emissions budget
can be calculated. These range from the use of a simple proportionate calculus through to versions
which include considerations of social and economic factors such as national and per capita wealth,
development needs, and climate-related factors such as mitigation capacity and climate
vulnerability/adaptation needs.

This paper considers three approaches in order to offer a guide and frame for a revised Australian
national 2020 target:

    •   Total budget approach – National allocation of global emissions budget (using equal per
        capita emissions rights/contraction and convergence approach)

    •   Ambition gap budget approach – National allocation of Ambition Gap based on current
        emissions (proportional national emissions, or ‘grandfathering’)

    •   Development approach – National allocation of global budget adjusted to account for
        national wealth and development status (Beneficiary/polluter pays - capacity and
        responsibility approach)

National allocation of global emissions budget based on population
A national emissions budget can be developed by building on the concept of per capita emissions
rights, first proposed by Aubrey Meyer (2000) when he articulated the ‘contraction and convergence’
approach to moving all national emissions to an per capita-based, ecologically bounded footing over
time.

To do so, the available global emissions budget of approximately 390 Gt CO2-e (if we wish to have a
better than an 80 per cent chance of keeping warming to below 2°C) is first divided by the number of
human inhabitants on this planet. National carbon budgets are then determined by taking into account
national population levels. As the WGBU puts it, ‘The global CO2 budget is distributed among the
world’s population on an equal per-capita basis so that national CO2 budgets can be calculated for all
countries, and adopted on a legally binding basis. These budgets provide an orientation for countries
on how swiftly and substantially their CO2 emissions need to be reduced’ (WGBU 2009, 3). This
approach in part depends on the baseline used for assessing population – which can be set
contemporaneously (say, at 2013) or based on projections (for instance, for 2050, when global
population is commonly estimated to peak).

The current global average per capita carbon allocation based on best-current (2010) global
population data is 390 Gt CO2-e divided by approximately 7 billion, or 55.7 tonnes CO2-e per capita.

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                      7
Given the inertial nature of demographic trends, which are generally resistant to rapid alteration, it is
important to also consider these budgets against realistic future population levels. The 2050 global
average per capita allocation, based on projected 2050 global population data is 390 GtCO2-e divided
by approximately 9 billion (close to the UN’s median projection), or 43.3 tonnes CO2-e per capita.

Both approaches – using 2010 and 2050 population estimates - are used here to calculate national
emissions budgets (Table 1).

Table 1 underlines the urgency of rapid emissions reductions if we are to have a reasonable chance
of keeping warming to below 2°C or the safer level of 1.5°C.

When the global per capita emissions budget is adjusted to account for population growth to 2050, if
the top 20 major emitters continue to emit at current (2010) rates and yet wish to keep global average
warming below 2°C:
    •   19 of the 20 major emitter states will have exhausted their emissions budget within a decade,
        and

    •   nine are likely to have already done so by the end of 2014.

Only India, with some 27 years at current emission rates, has a ‘carbon emissions reserve’ sufficient
for it to undertake a gradual transition to a post-carbon economy.

It is important to note that while this per capita approach is equitable insofar as it divides the
atmospheric commons equally between present and future humans, it is profoundly inequitable
insofar as it ‘grandfathers’ or excuses the historical benefits and potential damages that have accrued
or will arise from emissions before the present moment.

It fails to recognise the unevenness of global economic development, based on unequal access to
and uneven historical use of fossil fuels by nations. In effect, it leaves the ‘scraps’ on the emissions
table to be divided equally among those who have benefited most from the earlier carbon feast, and
those who have missed out – with carbon trading being used to effect a major wealth transfer from
North to South.

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                          8
Table 1:        Emissions budgets of the world’s 20 major emitters

Country         Current        Population    Actual per   Current              Emission years    Projected    Permissible 2050 national   2050 emiss’n years
                                    6
                (2010)         2010          capita       permissible          left in 2011      population   carbon emiss’s budget       left in 2011
                annual         (million)     emissions    national carbon      (emissions        2050
                                                                                                      7       accounting for popl’n       (2050 emissions
                           5
                emissions                    (tonnes,     emissions budget     budget            (million)    growth                      budget /2010
                (Mt CO2-e)                   2010)        (Mt CO2-e)           [55.7]/2010                    (Mt CO2e)                   emission rates)
                                                          (2010 popl’n x per   emission rates)                (2050 popl’n x per capita   (highlight = exhausted
                                                          capita 55.7)                                        43.3)                       by approx 2015)
China             11,181.8         1,338.3        8.4               74,543                6.7      1,273.0                    55,121                      5.2
United States      6,714.9           309.4       21.7               17,234                2.6        398.0                    17,233                      2.6
India              2,691.7         1,224.6        2.2               68,210               25.3      1,684.2                    72,925                     27.1
Indonesia          1,945.6           239.9        8.1               13,362                6.9        289.5                    12,535                      6.4
Brazil             1,620.7           194.9        8.3               10,856                6.7        218.7                     9,470                      5.8
Russia             1,555.2           141.8       11.0                7,898                5.1        124.3                     5,382                      3.5
Japan              1,378.7           127.5       10.8                7,102                5.2        105.7                     4,577                      3.3
Germany              979.4            81.8       12.0                4,556                4.7         72.0                     3,118                      3.2
Canada               728.2            34.1       21.3                1,899                2.6         43.6                     1,888                      2.6
Mexico               660.8           113.4        5.8                6,316                9.6        142.3                     6,162                      9.3
Sth Korea            646.8            48.9       13.2                2,724                4.2         46.4                     2,009                      3.1
Australia            628.9            22.3       28.2                1,242                2.0         30.9                     1,338                      2.1
UK                   619.5            62.2       10.0                3,465                5.6         71.5                     3,096                      5.0
France               538.0            65.1        8.3                3,626                6.7         73.4                     3,178                      5.9
Iran                 528.0            74.0        7.1                4,122                7.8         84.3                     3,650                      6.9
Saudi Arabia         495.4            27.5       18.0                1,532                3.1         43.2                     1,871                      3.8
Italy                490.6            60.5        8.1                3,370                6.9         58.8                     2,546                      5.2
Poland               450.0            38.2       11.8                2,128                4.7         34.5                     1,494                      3.3
South Africa         421.9            50.0        8.4                2,785                6.6         56.4                     2,442                      5.8
Spain                354.0            46.0        7.7                2,562                7.2         51.5                     2,230                      6.3

5
  EU EDGAR (2010 GHG with LULUCF) At: http://edgar.jrc.ec.europa.eu/overview.php?v=GHGts1990-2010
6
  Data derived from World Bank HNP stats. At:
http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTHEALTHNUTRITIONANDPOPULATION/EXTDATASTATISTICSHNP/EXTHNPSTATS/0,,contentMDK:21737699~
menuPK:3385623~pagePK:64168445~piPK:64168309~theSitePK:3237118~isCURL:Y,00.html
7
  Data derived from World Bank HNP stats, as per its footnote 1.
It also assumes that all – including the very poorest states (those with per capita emissions below the
current or projected global per capita average) – should undertake proportionate additional mitigation
regardless of their development status, whether they are wealthy, highly developed industrialised
national or poor, least developed states.

As the WGBU report (2009) recognises, taking these factors into account requires developed
countries to ‘sacrifice’ their future emissions in order to create additional emissions space for
developing nations - depending on whether trading is allowed, and what rules apply.

However the option for developed countries of deferring domestic mitigation effort by buying carbon
credits from low-emitting least developed countries (LDCs) is limited, as the LDCs are responsible for
only some 30 per cent or less of global emissions and so have limited carbon to trade.

Despite these important qualifications, ‘unadjusted’ – i.e. proportionate but inequitable – national
emissions budgets calculated using 2010 and projected 2050 populations do provide a sound basis
for indicating the minimum or ‘first cut’ rate and volume of emissions mitigation needed if major
emitting countries are to contribute fairly to reducing their emissions while staying within the global
emissions budget limit.

Ambition gap (emissions-based) approach
The ambition gap provides an alternative, perhaps easier way, to consider national emissions
responsibilities in the short term. As noted earlier, the “ambition gap” between current national
pledges and likely global mitigation performance, on the one hand, and the aggregate emissions
required to keep global average warming below 2 Celsius but also allowing with a reasonable chance
to also keep it below 1.5°C, on the other, is likely to be around 14–24 Gt per annum in 2020.

There are several ways in which the task of bridging this gap could be distributed between states. The
simplest is for nations to take on an additional emissions reduction burden that is proportionate to
their current contribution to global emissions (Table 2), adding it to their current reduction pledges

As with the global emissions budget approach, this approach is merely mathematically proportionate
but it nevertheless provides an indicative guide to required effort. Again, this approach is inequitable
for the reasons given for the first (per capita) approach – including because it requires all nations, rich
and poor – to participate on equal terms, and additionally because it “accepts” the significant
differences in underlying mitigation effort by developed nations, varying from Germany’s and
Norway’s substantial pledges to reduce emissions to -30% and -40% below 1990 levels by 2020,
respectively, to Australia’s trivial emissions target of -5% below 2000 levels, also by 2020.

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                         10
Table 2:          Bridging the Ambition Gap: 20 major emitters’ contribution

                          Current (2010)                     Proportionate additional mitigation burden
                          annual                             to bridge 14 GT (and 24 GT) Ambition Gap
                                             Per cent of
                          emissions          global          [per cent of global emissions x Gap]
                                     8                 9
Country                   (Mt CO2-e)         emissions       (Mt/per annum in 2020)
China                          11,181.8            22.3                   3,122 (5,352)
United States                   6,714.9            13.4                   1,876 (3,216)
India                           2,691.7             5.4                    756 (1,296)
Indonesia                       1,945.6             3.9                    546 (936)
Brazil                          1,620.7             3.2                    448 (768)
Russian Federation              1,555.2             3.1                    434 (744)
Japan                           1,378.7             2.8                    392 (672)
Germany                           979.4             2.0                    280 (480)
Canada                            728.2             1.5                    210 (360)
Mexico                            660.8             1.3                    182 (312)
South Korea                       646.8             1.3                    182 (312)
Australia                         628.9             1.3                    182 (312)
United Kingdom                    619.5             1.2                    168 (288)
France                            538.0             1.1                    154 (264)
Iran                              528.0             1.1                    154 (264)
Saudi Arabia                      495.4             1.0                    140 (240)
Italy                             490.6             1.0                    140 (240)
Poland                            450.0             0.9                    126 (216)
South Africa                      421.9             0.8                    112 (192)
Spain                             354.0             0.7                     98 (175)
TOTAL                                                                     9702 (16,632)

Development approach
The principles of burden sharing and of ‘common but differentiated responsibility’, enshrined in the
UNFCCC, remain poorly defined in practice. Developing nations have argued strongly that their right
to develop has been infringed by the ‘theft’ of their portion of global greenhouse emissions space by
developed countries which have grown wealthy through this misappropriation. Separately, the point is
often made that poor countries, often disproportionately the victims of global warming, don’t have the
economic capacity to pursue mitigation and adaptation to the same degree as wealthy nations.

Nevertheless, despite two decades of intense debate, no commonly accepted formula for the fair
allocation of mitigation effort between nations has emerged. Without movement in this direction, or
some other form of development assistance or wealth redistribution, the global mitigation effort will
remain inadequate, poor developing countries are highly unlikely to adopt significant emissions
reductions that may appear to compromise their economic growth in the short term.

Assessments of national wealth and national capacity based on GDP or GNP are flawed insofar as
these measures include unproductive, socially destructive and ecologically unsustainable activity. Nor
are they good measures of development status because aggregated national or per capita GDP data
do not indicate the (mal)distribution of income and wealth within countries, or important unpriced
aspects of development, such as access to education, employment, health and housing.

8
    EU EDGAR (2010 GHG with LULUCF) At: http://edgar.jrc.ec.europa.eu/overview.php?v=GHGts1990-2010
9
    Based on EU EDGAR, as above.

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                       11
Even so, transnational comparisons of per capita income and GDP do offer a broad indication of
disparities in national economic capacity, including of capacity developed through the exploitation of
fossil fuels in the historical processes of economic industrialisation and material investment. For these
reasons, this article supports adjustment of national allocations of the global emissions budget, and of
ambition gap allocations, to reflect disparities in these measures.

Several coherent and plausible formulae have been developed to help define an equitable burden
sharing approach to mitigation. One is used here to provide an indication of the implications of more
equitable approaches to determination of national targets: the Greenhouse Development Rights
(GDRs) Framework, developed by Baer et al. (2008), who write that ‘the GDRs framework codifies the
right to development as a “development threshold” − a level of welfare below which people are not
expected to share the costs of the climate transition’.

Baer et al. argue that ‘some 70 per cent of the global population is responsible for only 15 per cent of
all cumulative emissions and have little capacity to invest in solving [the climate problem]’ (Baer et al.
2008, 16). They develop a Responsibility Capability Index (RCI) that defines aggregate national
capacity comparatively according to national income. They also set the ‘development threshold’ at
$USD 7500 annual per capita GDP (PPP) (for 2010), below which nations would have no
responsibility for mitigation and the need for development is assumed and above which, developing,
developed and highly developed nations would fairly share the burden of mitigation to create ‘space’
for poorer countries.

Baer et al.’s RCI index for 2010 (Baer et al. 2008, 93–98) is used here to suggest, indicatively, the
implications for the top 20 emitting states’ additional mitigation effort (Table 3). It is notable that
                       th                                           th
Australia, which is 12 on Baer et al.’s table, also appears as 12 on the World Bank’s (2005–2011)
                                                   th                                       th
per capita GDP (PPP) international rankings, 10 on the IMF’s 2010 ranking, and 13 on the CIA’s
listing. Clearly Australia is a country of considerable economic capacity, wealth and general standard
of living by this measure (Wiki 2013).

Baer et al. continue to base their work on production-based rather than consumption-based emissions
accounting. An approach that also takes into account the flows of traded or ‘embodied’ carbon and
the displaced responsibilities of high-consuming and fossil-fuel exporting states, would increase the
responsibility of high-consuming, commodity importing states or blocs (such as the United States, the
European Union, and Australia) and high fossil fuel exporting states (such as Australia, Norway and
Saudi Arabia). It would lower targets for export-oriented, low-consuming manufacturing states such as
China (Christoff 2013; Grasso and Roberts 2013). Eventually, these two approaches need to be
united.

It would be, of course, utterly naïve to expect that, merely by outlining more equitable targets, deeply
entrenched cultural, institutional and political opposition to their adoption will evaporate. It is highly
unlikely, for instance, that either the United States or China will adopt commitments as substantial as
those indicated in Table 3. But it is absolutely certain that they will not do so without the pressure of
example.

It is more likely that progress towards such outcomes will occur if other high-emitting countries with
substantial economic capacities – such as Australia – adopt equity-based targets that are well within
their means, thereby supporting the normative arguments for action towards such an international
effort. It is this normative ‘logic’ – along with a good measure of national self-interest in seizing the
first mover advantage in the low carbon energy revolution - that has driven Norway, Germany, and the
United Kingdom to adopt the tough 2020 targets they are now pursuing.

Australia’s fair share
In 2013, Australia emitted an estimated 538.4 million tonnes (Mt) of CO2-e (Comm.Aust, 2014, 6). Its
emissions – excluding LULUCF – have grown by some 29.7 per cent since 1990 but declined slightly
in recent years.
           th
It ranks 12 among the planet’s 193 nations for its domestic greenhouse gas emissions (EDGAR
               th
2013). It is 14 largest global contributor based on its domestic CO2 emissions alone (Olivier et al.

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                       12
2012, 12). Its per capita emissions are among the world’s highest (Olivier et al. 2012, 29; UNPD
2010).

Further, when emissions from Australian coal and gas exports are added to its domestic greenhouse
emissions, Australia is the source of some 4 per cent of total global emissions.

In all, Australia is a major national emitter, a very significant contributor to global warming, and should
shoulder part of the additional reduction burden associated with bridging the ‘ambition gap’ and
preserving the 2 Celsius guardrail. What then, is Australia’s fair share of this mitigation effort?

Table 3:           Bridging the Ambition Gap: 20 major emitters’ contribution adjusted for
                   development and capacity responsibilities

Country           Current        Per cent of    Proportionate           Per cent of   Equity-adjusted
                  (2010)         global         additional mitigation   bridging      additional mitigation
                                           11
                  annual         emissions      to bridge Ambition      effort,       to bridge Ambition
                            10
                  emissions                     Gap                                   Gap
                                                                        based on
                  (Mt)                          (Mt/p.a)                RCI
                                                                            12        (Mt)
                                                14Mt & (24Mt)                         [14Gt and (24Gt) x
                                                                                      %RCI]
China               11,181.8           22.3        3,122 (5,352)               5.5         770 (1,320)
United States        6,714.9           13.4        1,876 (3,216)              33.05      4,627 (7,932)
India                2,691.7            5.4          756 (1,296)               0.48         67 (115)
Indonesia            1,945.6            3.9          546 (936)                 0.21         29 (50)
Brazil               1,620.7            3.2          448 (768)                 1.7         238 (408)
Russian
                     1,555.2            3.1          434 (744)                 3.84        538 (922)
Federation
Japan                1,378.7            2.8          392 (672)                 7.77      1,088 (1,865)
Germany                979.4            2.0          280 (480)                 5.47        766 (1,313)
Canada                 728.2            1.5          210 (360)                 2.93        410 (703)
Mexico                 660.8            1.3          182 (312)                 1.58        221 (379)
South Korea            646.8            1.3          182 (312)                 2.01        281 (482)
Australia              628.9            1.3          182 (312)                 1.71        239 (410)
UK                     619.5            1.2          168 (288)                 3.73        522 (895)
France                 538.0            1.1          154 (264)                 3.25        455 (780)
Iran                   528.0            1.1          154 (264)                 0.88        123 (211)
Saudi Arabia           495.4            1.0          140 (240)                 1.38        193 (331)
Italy                  490.6            1.0          140 (240)                 3.08        431 (739)
Poland                 450.0            0.9          126 (216)                 1.06        148 (254)
South Africa           421.9            0.8          112 (198)                 0.97        136 (2,323)
Spain                  354.0            0.7           98 (168)                 2.08        291 (499)
TOTAL                                              9,702 (16,632)             83        11,575 (19,843)

10 7
 ,          EU EDGAR (2010 GHG with LULUCF) At: http://edgar.jrc.ec.europa.eu/overview.php?v=GHGts1990-
2010

12 9
  , Baer et al. (2008, 93-98) Appendix (RCI rankings).

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                         13
In 2009 Australia, under Labor, adopted an unconditional short-term emissions target to cut national
greenhouse emissions by 5 per cent below 2000 levels by 2020, a target recently confirmed by the
Abbott Coalition government. To achieve this emissions target, Australia faces a cumulative
abatement task of 431 Mt CO2-e and a per annum abatement task of 131 Mt CO2-e in 2020
(calculated on the basis of the carbon tax and Carbon Farming Initiative being retained) (Comm. Aust
2013, 3). The first Rudd Labor government also accepted the recommendation of the Garnaut
Review, in 2008, that Australia adopt two additional, conditional 2020 targets, of -15% and -25%.

Against conditionality
Australia pledged at the UNFCCC Conference of the Parties at Cancun, COP 16 in 2010, to increase
its commitment to -15% if there is a global agreement under which major developing economies
commit to substantially restrain emissions and advanced economies take on comparable
commitments. It also indicated that Australia will further increase its commitment to -25% if the world
agrees to an ambitious global deal consistent with stabilising atmospheric concentrations of
greenhouse gases at 450 ppm CO2-e (DCCEE undated).

‘Conditionality’ in climate negotiations is predicated on the idea that the conditional offer of greater
mitigation effort will encourage greater cooperation and induce other parties also to adopt more
stringent targets, and that delayed action will cost less in the future.

The 2008 Garnaut Report rightly argued that ‘Australia’s approach to targets and trajectories must be
linked to a comprehensive global agreement on emissions reductions, for four reasons. First,
international agreement is urgent and essential. Second, agreement is possible if Australia and some
other countries attach sufficient importance to it. Third, a comprehensive global agreement is the only
way to remove completely the dreadful political economy risks, to Australia and to the global trading
system, of payments to trade-exposed, emissions intensive industries. Fourth, a robust international
agreement lowers the cost of Australian mitigation and so allows us to be more ambitious about
reduction in emissions’ (Garnaut 2008, 277-278). The report also emphasised that that ‘if we are not
prepared to pay our fair share in the cost [of effective mitigation], then we cannot expect other
countries to do so’ (Garnaut 2008, 278).

Garnaut also suggested that ‘committing to interim targets for Australia that are unrealistically or
disproportionately ambitious in the absence of an international framework (that recognises abatement
and makes available opportunities for trade in emissions entitlements), is likely to be costly and
difficult to achieve…. A vacuous commitment that denies economic reality would be as damaging to
international negotiations as an unrealistically low offer that denies scientific urgency’ (Garnaut 2008,
278).

These strong points do not, however, support an argument for conditionality, which is based on
several assumptions. First, ‘conditionality’ is in part based on a flawed economic rationale, that
Australia’s costs of delayed abatement will be cheaper if accompanied by an international effort. This
rationale is underpinned by assuming the costs of climate change should be confined to the costs of
mitigation measures alone.

The contrasting and more convincing view is offered by the Stern Report, which recognises that the
social and ecological costs of climate change – including both adaptation and remediation costs, the
costs of widespread damages associated with warming, and the value of productivity foregone - will
continue to mount if mitigation is delayed. By this broader calculus, early mitigation will always cost
less than delayed mitigation given the value of these other ‘externalities’, especially once warming of
2°C, 3°C and 4°C or more occurs. Given the ongoing delay in achieving a robust and sufficient
international agreement, the argument for conditionality and delayed Australian national effort has to
assume that this delay can still deliver a climate future in which less effort and less cost (in terms of
the aggregate costs of mitigation, adaptation, and climate-related losses) is possible.

The second, related argument refers to the state of international climate negotiations and the belief
that other Parties will respond to the inducements Australia offers. At and since COP 15 at
Copenhagen, the setting of national targets has depended more on the bottom-up nomination of effort
by individual Parties than a top-down negotiation based on commonly agreed formulae. While COP
18 at Doha agreed to a process intended to lead to a binding agreement by 2015, in Paris, there is

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                          14
little guarantee that such an agreement will include robust and effective targets before or even by
2020.

Moreover, there has been no sign that ‘conditional’ offers made by a number of Parties – and
specifically by Australia – have had any effect on negotiations to date, either on the prospects of a
robust agreement, or particularly on the mitigation efforts and negotiating stance of the two major
actors, the United States and China, whose actions continue to be determined predominantly by
domestic considerations. By contrast, early substantial national effort by Australia may, in a ‘bottom-
up world’, have a leadership effect – or support the leadership of other states such as Germany and
the United Kingdom – and therefore help to encourage international agreement.

In other words, there is no convincing logic to arguments for making Australia’s national target
contingent on or ‘conditional’ to international negotiations, given the profound environmental, social
and economic costs – including for Australia – of delay, under-achievement and failure. A ‘conditional’
approach should not be used in setting a revised 2020 target for Australia.

Finally, as the UNEP suggests, moving from current unconditional to the adoption of existing
conditional pledges could narrow the ‘ambition gap’ by 2–3 Gt CO2e, and increasing the scope of
current pledges could further narrow the gap by 1.8 Gt CO2e (UNEP 2013, xvi).

Australia’s carbon budget
Earlier, this paper recommended that Australia’s climate targets should:

       1. Reflect the best available climate science with regard to the pace and rate of mitigation;

       2. Be consistent with efforts to hold global average warming to less than 2°C above preindustrial
          levels;

       3. Be equitable with respect to international burden sharing of mitigation effort, taking into
          account Australia’s historical emissions profile (‘polluter pays’ principle), its national economic
          wealth and capacity (‘beneficiary pays’ principle’), and the equal right of individuals to the
          global atmospheric commons (‘per capita emissions rights’ principle);

           and

       4. Be technologically feasible.

Taking these principles into account, three different approaches to science- and equity-based
mitigation targets were considered in general, above. Their specific implications for Australia are
summarised in Table 4, along with a target that has implications for Australia’s response to its
vanishing carbon budget.

Australia’s national emissions budget
Based on a per capita allocation of the remaining global emissions budget and Australia’s projected
2050 population, Australia’s total remaining emissions budget was some 1.34 billion tonnes CO2-e in
2011. Given current and recent past emissions rates, if Australia aims to contribute to a global
emissions target with a 75% likelihood of holding warming to below 2 degrees Celsius, it will have
                                                 13
exhausted its remaining carbon budget by 2015.

Reducing Australia’s emissions steadily to its current -5% target would see it emit some 5.4 billion
tonnes of GHGs by 2020 (from 2011), leaving Australia with an ‘emissions debt’ of some 4 billion
tonnes (Table 4) – almost three and three quarter times its total available national carbon budget in
2011. Nations collectively exceeding the carbon budget by this rate would make a +2°C World, or
even a +4°C World, impossible to achieve.

Only by almost immediately reducing its net domestic emissions to zero – clearly an impossible goal –
could Australia stay within its carbon budget. That Australia will run a substantial ‘emissions debt’

13
     Some 2.5 years from 2011, based on the 2050 population estimate and national emission at 2013 levels.

Out of time: Australia’s emissions budget, its 2020 target and the ‘ambition gap’                            15
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