Labor Climate Policy Credibility Assessment | Election 2016

Labor

 

 

 

Recent actions undertaken by Labor in oppostion

Labor actively sought to defend the carbon pricing mechanism, the CCA, ARENA and CEFC. It maintained support for emissions trading and resisted attempts to slash the legislated renewable energy target, agreeing only once industry, through the Clean Energy Council, supported the compromise. In government, Labor had supported the 2020 target range of 5 to 25 per cent off 2000 levels and established a CCA led advisory process which subsequently recommended 19 per cent based on level of international action. Labor has since just supported the government’s 5 per cent 2020 target. Labor supported the senate committee inquiry into carbon risk disclosure.


Global warming implied by Labor’s target

2-3°C – Labor has committed to reducing emissions by 45 per cent (from 2005 levels) by 2030. This reflects the minimum reduction recommended by the Climate Change Authority. If other countries match Labor’s emission reduction target the result would be global warming of 2-3°C.

Per person emissions implied by Labor’s target

11 tonnes in 2030 – The ALP’s current 2030 target would place Australia 15th amongst G20 nations in 2030.

The Labor Party Climate Change Action Plan and other commitments include (TCI analysis in italics):

 

Objective 1: Limit emissions for warming of 1.5-2°C 

  1. Endorses the Paris Agreement commitments to limit global warming to well below 2°C and pursue efforts to keep warming to 1.5°C.

  2. Supports ratification of the Paris Agreement. Will commit to undertaking the necessary work to ratify the agreement by the end of 2016.

  3. Reduce emissions by 45 per cent on 2005 levels by 2030 and achieve net zero emissions by 2050. Develop a 2025 target within twelve months of government and conduct five-yearly reviews. Future targets to be guided by a carbon budget framework. Labor has adopted the minimum 2030 emissions reduction target of the 45 -65 per cent range recommended by the CCA for avoiding 2°C warming. However, a carbon budget consistent with keeping warming to 1.5-2°C would require faster and deeper emission cuts, suggesting that the 45 per cent target will need to be raised or that emissions will have to fall well below zero by 2050. Nominating the 2050 endpoint is important however, and the support for CCA and commitment to regular reviews, leave open a pathway to climate credibility.

  4. Ensure Australia’s continued commitment to international climate finance in line with the shared international goal of mobilising public and private funds to assist vulnerable communities address climate change. No extra resources identified for the increase required from current commitments to climate finance or ideas of how extra private investment might be mobilised. This currently falls far short of the estimated $1.5 billion per year that Australia should be providing by 2020.

  5. Seek Climate Change Authority guidance on carbon budgets, emissions targets and adaptation planning. Will commit $17.4 million over the forward estimates to reverse the government’s abolition of the CCA and ensure that it continues to be appropriately resourced to achieve its role. As an independent body with expertise and distance from government, the CCA is a crucial part of an institutional framework that can build political support for action. To date it has not focused on adaptation issues, which suggests that it will require greater resourcing than that provided by current funding.

Objective 2. Grow a net zero emissions economy and modernise energy

  1. Will conduct an Electricity Modernisation Review (EMR) in 2017 to develop a framework for an orderly transition from old, heavily polluting generation to modern, clean power sources. This will include a core focus on supporting workers and communities. The EMR will also examine how the regulatory framework of the National Energy Market framework  can remain consistent with the needs of consumers and the objectives of decarbonising the electricity sector consistent with national emission reduction targets. A plan to steadily replace high-carbon coal-fired power with clean energy is essential to manage the inevitable - and necessary - transformation of the electricity system. Labor’s EMR is an important early step but its value will depend heavily on the terms of reference of the review and its conclusions.

  2. Target 50 per cent renewable electricity by 2030. Labor has announced measures including government procurement, greater flexibility for the CEFC, support for community power networks and continued support for ARENA (will provide $200m in grant funding to ARENA but may not support full $1.3b legislated funding). None of these measures are sufficient to achieve 50 per cent renewable electricity, so the Electricity Modernisation Review will need to produce further policy options. ARENA grant funding has been an important enabler of many recent large-scale renewable energy projects.

  3. Establish an electricity-only emissions intensity-based trading scheme (“electricity ETS”) and a cap-and-offset scheme for other large emitting industries (“non-electricity ETS”). Emissions-intensive, trade-exposed (EITE) industries will be allowed full access to approved international offsets under phase one of the “cap and trade”  ETS. Rules and coverage for phase two (from 2020) are to be developed in government. Both schemes will align with national targets and be guided by principles including: delivering a trajectory to net zero pollution by 2050 through reductions in carbon pollution informed by the latest science and Australia’s international obligations and appropriately account[ing for] the impacts on the competitiveness of all Australian industries. Labor will revive the market for carbon farming but will not provide further funding for the ERF. Allowing full access to international units means that the non-electricity ETS is likely to have minimal impact on company behaviour and domestic emissions, irrespective of yearly emission limits, before 2020. As international units are currently far cheaper than domestic carbon farming offsets, there is a risk that market demand for ACCUs is insufficient to sustain the carbon farming sector. The effectiveness of the electricity ETS will depend on the stringency of the emissions intensity baseline. The flexibility of these mechanisms offers prospects of a durable and scalable framework, but their contributions to Labor’s national emission reduction target will depend on the strength of their settings. Additional regulatory measures are likely to be necessary to construct a credible emission reduction trajectory. In electricity, for example, extra policies to de-risk clean energy investment and drive a steady replacement of existing coal fired power stations with clean energy over the next two decades will be required.

  4. Double Australia’s energy productivity by 2030 (from 2010 levels) in line with the goal supported by the Australian Alliance to Save Energy (A2SE’s 2XEP project), by building on the National Energy Productivity Plan and working with A2SE and other groups. An important first step but this will require more detail and ongoing efforts to strengthen Australia’s patchy energy efficiency policies.
  5. From 2020, implement emissions standards for light vehicles that align with Climate Change Authority recommendations (105gCO2/km by 2025, down from 192gCO2/km currently) and are equivalent to standards in the United States. These are strong vehicle emission standards but delaying their introduction to 2020 increases consumer fuel costs and vehicle emissions in the intervening years. 

Objective 3. Mainstream climate risk and opportunity assessments

  1. Labor will build on the National Climate Resilience and Adaptation Strategy, and pursue the inclusion of climate change risks and impacts in core policy development and assessment documentation. As noted above, Labor will seek guidance from the Climate Change Authority on adaptation planning. Promising commitments but lacking detail.

  2. Labor will restore $300m funding to CSIRO.

  3. Will pursue reinstatement of Senate Inquiry into Carbon Risk Disclosure to inform Labor policy. Welcome commitment to reviving a valuable inquiry.

Policy positives

  • Target of net zero emissions by 2050 and a 45 per cent reduction in emissions by 2030 are important targets. Keeping warming to 1.5-2°C will require greater ambition in the near term.

  • Clear commitment to carbon budgeting and an active independent role for the CCA.

  • Electricity Modernisation Review an opportunity to reform electricity system, the commitment to replace old high-carbon generation with new clean energy while managing impacts on workers and communities should help smooth this transition. 

  • Carbon pricing framework that could scale up to drive broad-based emission reduction across the economy.

  • Ambitious energy productivity goal but currently lacks strategy to achieve it.

Policy negatives

  • Emission reduction targets currently inadequate to help keep global warming below 2°C.

  • Most detail on key policies to be developed in post-election electricity modernisation review.

  • No plans to integrate climate risk assessment. 

  • Much significant action put off to 2020 or has no clear start date: e.g. implement vehicle emission standards, full cap-and-trade operation of ETS, transition from high-polluting generation to clean energy.

Summary of Labor's climate policy position

Labor has taken important steps towards credible, scalable and durable climate policy and its goal of a net zero emissions economy by 2050 is an important reference point for national economic planning. Its targets will still lead to warming of 2oC or above, and key aspects of its energy decarbonisation plan are yet to be developed. The clear commitment to ratify in 2016 is welcome, as is Labor’s support for the CCA. Labor continues its support for CEFC and ARENA with the full grant making capacity of the latter in doubt. Electricity modernisation review concluding in 2017 an important opportunity. Labor’s climate risk assessment policies are underdeveloped but has identified some agencies and processes to assist. For these and reasons detailed above Labor’s climate policies are assessed as having pathways to credibility, greater clarity required.

 

The Climate Institute detailed assessment of the Coalition's policies.
Where will Australia’s 2030 per capita pollution stack up with each of the parties policies?
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