Appendix d progress towards Australia’s emissions reduction goals

Figure D.5: Australia’s emissions intensity—emissions per unit GDP ($2012), 2000–2030

 

Source: Climate Change Authority calculations using results from Treasury and DIICCSRTE 2013

Figure D.6: Australia’s emissions intensity—emissions and population, 2000–2030

 

Source: Climate Change Authority calculations using results from Treasury and DIICCSRTE 2013

D2.2 Overview of sectoral progress

Electricity generation and direct combustion emissions are projected to continue to account for about half of Australia’s total emissions over the period to 2030. Transport, fugitive and agricultural emissions are forecast to make up the majority of the remaining emissions.

The projected growth in direct combustion, fugitive and agricultural emissions is projected to offset reductions in waste, industrial process and electricity emissions over the period to 2030 in all except the high scenario.

Figure D.7 shows that an emissions reduction of about 134 Mt CO₂-e could be achieved in 2020 under the high scenario compared to the no price scenario, which is broadly consistent with the minimum reduction required to deliver the unconditional 5 per cent target.

Figure D.7: Changes in Australia’s emissions—no price and high scenarios, 2012–2030

 

Source: Climate Change Authority calculations using results from Treasury and DIICCSRTE 2013

D2.3 Sectoral contributions to emissions

State and Commonwealth regulation has been a major driver of emissions reductions. An 85 per cent reduction in LULUCF emissions, largely due to economic conditions and regulatory restrictions on land clearing, was a key reason why Australia’s whole-of-economy emissions were relatively flat between 1990 and 2012. The Treasury and DIICCSRTE modelling does not project similar improvements for this sector in future.

Electricity is the most significant sectoral contributor to emissions. Emissions from electricity generation grew quickly until 2009, when they started to decline. Since then, reduced demand for grid-connected electricity, combined with lower emissions generation, has driven down emissions.

Under the low, medium and high scenarios, reductions in Australia’s emissions intensity between 2012 and 2030 are more distributed across the economy than in the past. These sectoral changes are shown in Figure D.8.

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  Electricity—emissions under the high scenario are projected to decline to 2030, driven by lower demand growth, energy efficiency and a shift towards lower emissions intensity generation. The outlook under the low scenario and no price scenario is for emissions to rise by between 5 and 23 per cent between 2012 and 2030.
  
• 
  Transport—demand is expected to continue to grow, driven by strong growth in road freight and domestic aviation. Modest growth is projected in light passenger vehicle emissions, which are the largest contributor to transport emissions. Increasing use of low-emissions fuels and vehicle efficiency improvements are projected to partially offset activity increases to 2030.
  
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  Direct combustion and fugitive emissions—projected to increase to 2030, particularly because of greater gas production driven by foreign demand for Australian LNG and coal. Growth in these sectors could drive most of the net growth in domestic emissions to 2030 under the low scenario; more than offset the net reductions from the rest of the economy under the medium scenario; or significantly offset the net emissions reduction under the high scenario.
  
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  Industrial processes—under the low, medium and high scenarios, industrial process emissions are projected to fall by between 25 and 66 per cent from 2012 to 2030, largely due to the deployment of nitrous oxide conversion catalysts, which improve emissions intensity. Under the no price scenario, industrial process emissions are projected to rise by about 40 per cent above 2012 levels by 2030.
  
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  Agriculture and LULUCF—increasing export demand for Australian agricultural commodities is projected to drive an increase in emissions from agriculture. Projected emissions from LULUCF depend on the level of incentive for emissions reductions.
  
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  Waste—emissions, in all scenarios, are projected to fall through improved waste management; specifically, landfill gas capture and combustion (whether flared or used to generate electricity).