Another budget in massive deficit

Now that the federal budget is out of the way, it’s time to look at another budget soon to be massively in deficit – Australia’s greenhouse emissions budget.

Last week, atmospheric concentrations of carbon dioxide rose above 400 parts per million (ppm) for the first time in approximately 3 million years. Without deep and rapid cuts to greenhouse gas emissions over the next two decades, we face a world of catastrophic climate change with rising average temperatures, rising seas, and extreme weather events.

So what is Australia’s fair share of the effort necessary to avoid such outcomes? This question lies at the heart of the Climate Change Authority’s (CCA) new issues paper and its task of recommending on Australia’s future targets.

How much carbon does the world have up its sleeve?

In 2009, the international community – including Australia – agreed to hold global warming to below 2°C. Developed nations and major industrialising countries then pledged voluntary national mitigation targets for 2020. (Australia adopted an unconditional short-term emissions target to cut national greenhouse emissions by 5% below 2000 levels by 2020.) However, collectively, these pledges fall well short of what is required to keep warming below 2°C, or the much safer target of 1.5°C.

Research shows that the collective effort of all those pledges would still lead to global average warming of around 4°C and catastrophic climate change. This deficit in international effort is now commonly called the “ambition gap”.

Climate scientists have put numbers to this gap by estimating a global carbon budget. This budget defines the amount of emissions that can still accumulate in Earth’s atmosphere if we are to stay below 2°C. Using 2000 as the baseline, we now know that that we can add a further 1 trillion tonnes of CO₂ to the atmosphere to keep warming under 2°C.

Human activities have already added some 420 billion tonnes (give or take 50 billion tonnes) of CO₂ to the atmosphere since 2000. In other words, we have used almost half our quota in 13 years. Climate scientists estimate that, conservatively, only another 500 billion tonnes of CO₂ can be added to give us a 75% chance of staying below the 2° limit.

The world needs to cut its annual emissions of CO₂-equivalents by 8 to 13 billion tonnes by 2020 to have a reasonable hope of bridging the “ambition gap”. Cutting by the larger of these amounts offers a better chance of achieving the 2°Celsius goal.

How do we divide it up?

It’s all very well to know our limits, but sharing the burden of cutting emissions is proving difficult. How do we divide up the budget so everyone gets a fair slice?

One way is to divide the remaining 500 billion tonnes of possible greenhouse emissions by the world’s population of 7 billion. This approach gives each human alive today some 71.5 tonnes as their equal part of humanity’s remaining greenhouse budget allocation. Each person can use their quota entirely, or pass the remainder onto their successors. Multiplying the per capita quota by the population of a country gives you its national carbon budget.

Another option - for determining 2020 targets - is for all national emitters to accept a share in reducing their annual emissions to bridge the “ambition gap” of 13 billion tonnes.

These approaches aren’t fair. They are merely mathematically proportionate. They demand an equal response of states and their citizens whether nations are wealthy and industrialised or poor and least developed.

In other words, these approaches “excuse” the massive material benefits that some nations have gained from burning fossil fuels. They also ignore future population growth, the needs of some 2 billion additional humans who will be alive in 2050. A more equitable approach would take into account each nation’s development needs (reflected in its national wealth), its capacity to mitigate, its population projections, and its historical contribution to emissions and to mitigation.

Nevertheless, these strictly proportionate approaches to burden sharing offer an indicative initial guide to Australia’s share of effort.

What is Australia’s share?

In 2012, Australia emitted around 578 million tonnes (Mt) of CO₂-equivalents. It ranks 12th among the planet’s 190-plus nations for its domestic greenhouse gas emissions. Its per capita emissions are among the world’s highest. Further, when emissions from Australian coal exports are added to its domestic greenhouse emissions, Australia is the source of nearly 4% of total global emissions. In all, Australia is a major emitter, a very significant contributor to global warming, and should shoulder part of this additional reduction burden.

If we take the first approach, using a per capita allocation of the remaining global carbon budget and Australia’s present population, Australia’s total remaining emissions budget is some 1.65 billion tonnes. At current emissions rates, Australia will exhaust its total remaining carbon budget within the next three years - unless our economy ceases to exist in that time, or unless we buy substantial amounts of international emissions units to compensate for our emissions. It seems Australia is destined to consume much more of the global emissions budget than is its fair share.

The second approach – which involves accepting a share of the extra 13 billion tonnes cut necessary to bridge the ambition gap - means reducing Australia’s emissions by a further 195 million tonnes per annum by 2020 (1.5% of the 13 billion tonnes). This would be the same as raising Australia’s present 2020 mitigation target of -5% to around -40%.

Of course, Australia’s fair share in 2020 would need to be even greater because Australia ranks very high on international indices of national and per capita development, wealth and GDP. Ethically, halving our emissions by 2020 begins to look like the minimum appropriate option.

From even this brief analysis it’s clear that Australia has the responsibility and the need - given its ecological vulnerability - to adopt a much tougher 2020 emissions abatement target.

We are overspending carbon like there’s no tomorrow. Our current -5% target for 2020 is one of the weakest of any developed nation. It is expediently constructed to avoid domestic economic and political angst, and shows us to be – in terms of international mitigation effort - a nation of emissions bludgers.

In the run-up to the September election, we need to hear how competing political parties intend to address Australia’s carbon budget deficit. How will they bring it under control? Where’s the plan for a low-carbon economy? Labor’s cuts in funding for renewable energy, and Abbott’s promised axing of a carbon price that is already too low and his proposed demolition of the Clean Energy Fund, will move us even faster and further into the red.

A target that halves Australia’s emissions by 2020 can be firmly justified ethically and scientifically. This tougher target is also technologically and economically feasible – but that’s another story.

Nevertheless many will argue that halving Australia’s greenhouse emissions by 2020 is wildly unrealistic. For a start, it would require multi-party political support, including for significant sectoral reforms. ‘Yeah, right!’, I hear you say. But the longer governments ignore an unavoidable and growing problem of national proportions, the greater the pain when they confront it. And as we’ve just learned from Canberra, the worse the budget deficit and its projections, the tougher the medicine in the long run.

Peter Christoff does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.