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Meet greenhouse target with Australian renewables, not abatement overseas

Despite the best of intentions, is Australia’s energy outlook truly achievable? AAP

It is Australian Government policy to achieve an 80% reduction in greenhouse gas emissions by 2050. Despite the good intentions, is the current energy strategy truly “sustainable”?

The Gillard Labor Government has taken the courageous first step in introducing a carbon price, but further steps are needed for us to tread a sustainable path.

Given that 75% of Australia’s greenhouse emissions are energy-related, a sustainable energy strategy is crucial for tackling climate change. Such a strategy must be environmentally sustainable in the long term. It also must be economically sustainable to maintain a healthy competitive economy.

Admirable targets, but how can we reach them?

A 5% reduction between 2000 and 2020 is an important milestone on the way to an 80% cut by 2050, and a sustainable future. So how exactly are these targets to be achieved?

The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecasts a growth of 48% between 2000 and 2030 in Australia’s primary energy consumption.

This involves slowing down the growth rate to around 1.4% per year and increasing national energy productivity. However, there are no suggestions in ABARE’s projections of a levelling off in total energy consumption, let alone a decline.

This problem is manifest in the current projections for Australia’s national greenhouse gas emissions. Treasury modelling of September 2011 found that under current policies Australia’s national emissions would still rise 12% between 2000 and 2012. Although this is much less than the rise of 22.5% that would take place in the absence of the government’s “clean energy” initiative, it still falls short of the 5% reduction target.

For 2050, Treasury projects that current policies and a carbon price of $131/tonne by then would lead to just under a 2% fall in national emissions. This again falls short of the 80% reduction targeted.

A big bill for overseas abatement

Treasury concluded that the only way the 5% 2020 emission reduction target could be met would be through purchases of internationally sourced abatement of some 94 megatonnes per year. This would be 62% greater than that achieved through our domestic emission reduction policies.

Australia is investing a lot in sourcing abatement overseas - could it be better spent on renewables at home? CIFOR

Further, to meet the 2050 target, an absolutely massive 435 megatonnes per year of abatement would have to be purchased internationally. This is almost equal to the emission reduction achieved through our own domestic initiatives (463 MTonne/y).

Payments overseas will add up to some $57 billion each year by 2050, and at least this amount thereafter. Comparatively, the total expenditure budgeted by the Australian Government for 2012/2013 is $364 billion.

International emission trading is certainly desirable. However, it is a high-risk strategy to rely so much into the long term on purchasing abatement at a reasonable price when every country in the world will be striving hard to meet its own emission reduction targets.

Countries must first meet their own reduction targets. Only after that can they make further cuts to sell to a second country. Hence countries selling abatement are limiting their own future emission reduction options accordingly.

Current renewable energy projections won’t get us there

Arguably, we in Australia should take more responsibility for curbing emissions within our own borders. We should implement measures to raise our own energy productivity and deploy our own renewable energy sources. Investing $57 billion every year in domestic renewables and energy efficiency would produce a healthy, long-lasting return.

Australia’s Renewable Energy Target of a 20% renewable-energy share of electricity supply by 2020 will lead to a significant boost compared to the current 9.2%. But electricity only accounts for about 40% of total primary energy demand. Meeting the target means renewables will account for only 8% of total demand by 2020.

On current ABARES projections, renewables would meet only 7.6 % of total primary energy demand by 2029-30 period. We must gain a much higher contribution from renewables in order to meet our needs by 2030, and in turn 2050.

Stanford University researchers have recently published two papers that cast light on what a global energy strategy relying solely on energy efficiency and renewables could look like.

They project that strong energy efficiency measures across all sectors could reduce global energy demand by 8% between 2008 and 2030. Their proposal still allows for projected world economic growth.

They conclude a massive shift to renewable water, wind and solar sources could replace our reliance on fossil fuels by 2030. They also note that no reliance on carbon capture and storage and nuclear fission power is necessary.

Australia has the opportunity, let’s jump the barriers

Most importantly, they say that the barriers to a 100% conversion to renewable power worldwide are primarily social and political, not technological or even economic.

Australia is better placed than almost any other nation to make the transition to a sustainable energy economy.

We have a relatively small population living on a vast land area with bountiful wave, solar and wind resources. We have a strong track record in scientific and technological innovation. We among all nations are one of the best placed to take the lead in deploying renewables.

But with a less than 8% renewables’ contribution to primary energy projected for 2030, we are setting our sights far too low.

The actions we have put into place are all praiseworthy first steps. However, a much greater national investment will be required to make real strides towards a competitive, sustainable energy economy.

Will we be the country that leads the way into the solar era? Or are we going to be the last left clinging to fossil fuels?

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