What's happening faster than increasing global emissions? News and stories about climate change and Australia's policies to respond.
Here are the Top 5 things you need to know about Australian climate policy following the Carbon Market Institute's 6th Australasian Emission Reduction Summit, held in Melbourne two weeks before the federal election.
1. Business As Usual for Australian Climate Policy
It's business as usual for climate policy in Australia, as the Emissions Reduction Fund (ERF) – Australia's main policy lever for meeting our Paris Agreement commitment of a 24-26% reduction in greenhouse gas (GHG) emissions – remains.
The ERF has received $2.55 billion of funding to generate Australian Carbon Credit Units (ACCUs) from the land sector and industry, and has spawned an innovative and highly professional industry of carbon project developers, project managers and carbon experts throughout Australia. As of 1 March 2019, the ERF has issued 59.2 million ACCUs, with 773 projects registered.
Following the re-election of the Coalition after the 2019 May federal election, the ERF will remain largely the same – although the Morrison Government announced that it would be re-named the 'Climate Solutions Fund' (CSF) and receive an additional $2 billion in funding over the next decade.
The CSF excludes the electricity sector and uses the Safeguard Mechanism which requires large emitters to purchase ACCUs if they breach a maximum annual emissions threshold. This ensures any GHG emissions abatement achieved under the CSF is not lost due to increases in industrial emissions across the economy.
Despite this policy design, Australia's absolute emissions have actually continued to increase across the economy, despite reductions in emissions from the electricity sector.
2. Things are Heating Up
Once front-page news, headlines like “Hottest Summer on Record", “Driest Winter on Record", “Worst Cyclone Season" and “Worst Ever Coral Bleaching" are becoming the norm.
Why? Because concentrations of greenhouse gas emissions continue to increase and warm our atmosphere, resulting in patchy, but intense, consequences.
The latest IPCC Special Report stated that global warming is currently sitting at 1.0oC above pre-industrial levels. This means that, in order to stay below 1.5oC as the Paris Agreement aims to do, the global economy will have to halve its annual emissions output by 2030, and achieve net zero emissions by 2050.
It can be done, but since industrialisation in the 1900s we have not had one year where emissions have not increased. To drive down emissions and limit warming to 1.5oC, global leaders and the private sector need to work together to create a systematic transformation towards a low-carbon economy.
3. The Capital Markets are Listening
The private sector is recognising that the risks climate change poses to their bottom line are growing, and they need to take action to reduce emissions and mitigate these risks.
And climate change is affecting businesses today. Whether it's the insurance sector paying out record claims for unprecedented physical risks like natural disasters, or transition risks like those facing car manufacturers who must transform their products as national governments like Canada's begin phasing out fossil fuel engines.
Shareholders and investors are asking companies to disclose climate-related risks and opportunities under the Task Force on Climate-related Financial Disclosure (TCFD), while investment movements like ClimateAction100+ call on the industry to start measuring and managing physical and transition risks in a carbon-constrained world.
Honest and productive discussion was held at the CMI Summit the event from major players and institutions such as Frank Calabria, CEO & Managing Director, Origin Energy; Fiona Wild, Vice President, Climate Change & Sustainability, BHP; and Zoe Whitton, Head of ESG Research, Citi.
Smart money is moving to minimise climate risk exposure and maximise the opportunities a net zero economy presents – from the deployment of large scale renewable energy, to the uptake of low emission food production, and revitalising Australian industry by exporting low or no-carbon products to the rest of the world as the demand for net-zero value chains increases.
4. Voluntary Carbon Offsetting and Carbon Neutrality is Growing!
Participation in the voluntary carbon market – that is, businesses that voluntarily offset GHG emissions by purchasing carbon credits – is continuing to increase year on year, and by the numbers Carbon Neutral certifications are increasing year on year.
At the May Carbon Neutral Network meeting, it was announced that since the Australian Government's National Carbon Offset Standard (NCOS) was launched, over 14 million carbon credits have been purchased.
This represents 14 million tonnes of carbon equivalent being offset – equivalent to taking every car in Sydney off the road for a year. Currently, NCOS-accredited carbon neutral organisations are procuring about 2.5 million tCO2e of carbon credits annually.
5. Being Carbon Neutral is Good for Business
More and more, there is clear evidence that what is good for the planet is good for business. Here are just a few benefits of going carbon neutral, as listed by the Department of Environment:
- Future-proof your organisation
- Attract and retain talent
- Meet growing expectations from stakeholders
- Enter the carbon neutral supply chain
- Save energy and reduce costs
- Connect with your community
On day 2 of the conference, South Pole hosted a workshop titled 'Developing & Communicating Your Carbon Strategy', which discussed the benefits and challenges of having a carbon strategy and striving for economy-wide carbon neutrality.
Moderated by Jay van Rijn, Senior Carbon & Renewables Manager at South Pole, the workshop featured an excellent panel of speakers representing a broad cross-section of the Australian economy: Mark Jones, Manager, Energy & Emissions, Toll Group; Jane Kern, Senior Corporate Affairs Consultant, Bank Australia; Sarah Braude, Senior Sustainability Officer, RightShip; and Tom Schroder, Director, Marketing & Communications, South Pole.
An interactive session of audience polling gave insights into different aspects of developing and communicating a carbon strategy across main stakeholders, target audiences and channels for getting a carbon strategy out there.
It was encouraging to see that 'customers' remained at the centre of reasons for developing and activating carbon strategies.
South Pole is working with companies and brands to Go Carbon Neutral here in Australia and across the globe. To find out how to join some the leading NCOS-accredited Carbon Neutral organisations in Australia, get in touch.