Australia could achieve significantly greater than expected emissions reductions by 2020 if the Federal Government successfully implements its carbon pricing package, according to research conducted by environmental think-tank ClimateWorks Australia.

 

Anna Skarbek, Executive Director of ClimateWorks, said that a detailed research analyses of the Australian Government’s carbon pricing scheme would see a reduction 133 million tonnes of carbon emissions by 2020, more than double Treasury’s current modeling of domestic abatement through the carbon price.

 

“Treasury modelling indicated that the carbon price alone would produce domestic abatement of 58 million tonnes by 2020. However ClimateWorks research shows that abatement within Australia increases to 133 million tonnes when all measures in the package are considered,” Ms Skarbek said.

 

Ms Skarbek said that it would be the complete suite of carbon reduction measures, not simply the price on carbon, that would see significant decreases in the amount of emissions by 2020.

 

“These domestic abatement opportunities take Australia 83% of the way to achieving its 5% emissions reduction target by 2020,” Ms Skarbek said.

 

“The abatement opportunities within Australia are in addition to internationally- sourced abatement and provide solid evidence for the independent Climate Change Authority to recommend increasing Australia’s 2020 pollution cap above 5%.”

 

Ms Skarbek said ClimateWorks’ report looks at financial and non-financial barriers to reducing carbon emissions in three key areas of energy efficiency, land use and cleaner power.

 

“Our report found that the carbon price improves profitability for these actions by making it more cost effective for business to reduce emissions,” she said.

 

“However, there are also non-financial barriers to reducing emissions which include access to capital, information and market structure.

 

“These are not addressed by the carbon price but can be removed as a result of complementary measures in the package.“For example, the package also provides financial support in the form of grants, loans, equity investments or loan guarantees that will overcome some of the shortage of capital facing investors.

 

“Measures that provide access to information and improve awareness and understanding of how to achieve energy savings will also help households and businesses reduce emissions.”

 

The following table offers a breakdown of specific reduction contributions:

 

Key programs (acting with carbon price) Associated abatement (MtCO2e)
Carbon Farming initiative (Kyoto compliant) 39.0
Carbon Farming Initiative non-Kyoto Carbon Fund 12.2
National Energy Savings Initiative (NESI) 12.0
Clean Energy Finance Corporation (CEFC) 12.1
Payment for closure 11.9
Clean Technology Investment Program 6.5
Tax breaks for Green Buildings 5.9
Small Business Instant Asset Write-Off Threshold Change 1.9
Clean Technology - Food and foundries Investment Program 1.3
Productivity Commission review of fuel excise 1.4
Low Carbon Communities 1.1
Coal Mining Abatement Tech Support Package 0.8
Other programs 1.5
Total from complementary measures (with carbon price) 107
Emissions trading scheme (ETS) at default 5% target Contribues to all above plus 26
Total potential to be achieved by carbon package 133

 

Ms Skarbek warned that each year of delay would mean more opportunities are lost or become harder and more expensive to catch up. ClimateWorks’ previous research has found that delaying action on climate change to 2015 would increase the cost for business and households by $5.5 billion to reach Australia’s 5 per cent reduction target in 2020.