How do Australia’s GHG emissions stack up?

Australia’s 2018 annual net greenhouse gas (GHG) emissions were 538.2 M tonnes (1), an increase of 3.5 M tonnes (or 0.7%) over 2017. Angus Taylor, the federal minister responsible for reporting and, in theory, reducing GHG emissions, brushed away suggestions that Australia is falling behind other nations in meeting commitments agreed under the Paris convention.

So how do Australian emissions stack up against other countries and what progress are we making toward a decarbonised economy ? The answer is not as straightforward as one might think.

Australia’s official net GHG emissions (2) show an apparently reasonable decrease from 604.9 MT in 1990 to the current level of 538.2 MT. Over this time period Australia’s population has increased from 17.2 million to 24.7 million so, as the Department of Environment and Energy kindly points out, that this means a 34% decrease in per capita emissions. At first glance this performance seems pretty solid.

Unfortunately, with 2018 emissions of about 23 tonnes CO2/person/year, Australia has higher per capita GHG emissions than all other developed countries and 3-4 times higher than most European countries which typically report less than 8 tonnes/person/year. The comparison gets even worse when one considers that Australia’s performance since 1990 is strongly dependent on savings categorised as Land Use, Land Use Change and Forestry (2). In simple terms this means CO2 emission reductions and CO2 sequestration increases from activities such as growing new forested areas (afforestation) and regenerating previously cleared lands (reforestation).

Australia’s reliance on LULUCF is unusual among developed countries and while it is a valid and important factor in emission reduction it is complex and often difficult to audit. For this reason many comparisons of national GHG emission performance explicitly exclude LULUCF (3). Without LULUCF, Australia’s 34% per capita reduction since 1990 becomes a very pedestrian 5% decrease. Over the same period most European countries have recorded reductions of ~25%.

A tough critic could conclude that Australia has had consistently high emissions for the last 30 years and excluding LULUCF has done a lot less than most countries to reduce carbon pollution.

There is plenty of data to support this characterisation but there is also a partial counter argument. Currently GHG emissions are estimated using a production based accounting methodology as agreed/proscribed by the United Nations Framework Convention on Climate Change (UNFCCC). Some economists believe this approach gives countries that import energy intensive products an advantage relative to the countries where these products are produced. This logic suggests that demand created by importing countries is the real driver of the emissions and the accounting should recognise this. A consumption based accounting methodology would assign emissions to the country where the product was consumed rather than where it was produced. While more complex system to administer, it would prevent countries pushing energy intensive industries offshore to reduce their emissions.

The impact on Australia of changing to a consumption based accounting system is pretty modest (4). While we outsource emissions associated with manufactured items made in Asia, we export about the same volume of GHG’s associated with the mining and processing of raw materials such as iron ore. In contrast many European countries, with Switzerland being a prime example, would report higher GHG emissions under a consumption based methodology. This would not change Australia’s ranking as the highest per capita source of GHG emissions but it would make the comparison more flattering and potentially make Australia’s decarbonisation achievements appear more reasonable.

Angus Taylor’s sensitivity about Australia’s GHG emissions performance is understandable and to some extent he is trying to defend the undefendable. On the other hand, GHG accounting is complicated and trying to explain its nuances on prime time television is an unenviable task. Australia’s commitment to emission reduction looks bad and clearly reflects a lack of energy policy consistency. It also reflects an accounting methodology that penalises economies like Australia’s which are based on primary production and exporting raw materials. Angus Taylor could do worse than recommit to net zero carbon emissions but stress that with a coal heavy generation fleet and a ban on fracking, nuclear power and new large scale hydro scheme Australia has a tough path to net zero emissions. He will, however, need to commit to do more to encourage increased renewable generation, electric vehicles and changes to agricultural methods.