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The Other Budget: Labor staring down the barrel of a climate deficit

by David McEwen | May 13, 2024 | Energy & Environment, Latest Posts

The latest data on emissions is not good. The annual climate update was buried by other news, notably the climate-damaging Future Gas Strategy. David McEwen reports. 

Amid a frankly depressing set of data releases and announcements last week – for those concerned with the health of the planet – one slipped through completely unremarked except by a few climate scientists on social media. It was the pre-print of the annual climate update published in the journal Earth System Science Data. 

Among other sobering stats, it included this mic drop: the available global carbon budget for a 50% likelihood – yes, that’s a coin toss – of remaining within 1.5 degrees of global heating was about 150 billion tonnes at the start of 2024.

We’re currently burning our way through on average about 40 billion tonnes a year. 

Wait, what? Haven’t we been told that we need to roughly halve global emissions by 2030 and achieve net zero by mid century for the same chance of staying within 1.5 degrees?

Well, yes, but things have changed. For one thing, we’ve continued to increase emissions since that target came out over 5 years ago. And for another, the actual climate indicators – including observed heating and the atmospheric concentrations of carbon dioxide and other greenhouse gases – are worse than expected at this point in the game. So, the remaining safe carbon budget has been revised down.

Urgent global action required

In the absence of radical global action, we will have blown our chances of 1.5 degrees within a handful of years, well before 2030. And global action must start at home, because despite what some say, Australia’s actions matter.

We’re a G20 economy with massive per capita historic and current emissions. We are a massive exporter of fossil emissions, while offshore processing of our other minerals sees us having influence over nearly 10% of global emissions in all.

Meanwhile, Australia is highly exposed to the impacts of climate change, the costs of which will adversely affect our economy. We also have unparalleled resources to decarbonise our economy. It’s up to us to lead the world.

I hasten to stress that passing thresholds does not imply imminent demise. But it does continue to make the weather more volatile, significantly increasing the prospects of long tail events such as a global famine, while hastening the onset of calamitous natural tipping points.

Values and choices

Julia Gillard once remarked, “Budgets are about choices, Fran, and you show what you value by the choices you make.” With the Federal budget looming, it reminds me that the government persists in using the comforting but flat-out erroneous framing of its emissions reduction target “43% off 2005 levels by 2030.”

If you read the Department of Climate Change, Energy, Environment and Water’s fine print, you’ll see that there is an underlying carbon budget attached to that target – some 4.4 billion tonnes for the decade 2021-2030. 

That budget has absolutely nothing to do with science. It’s simply based on working from where we were in 2021 (allegedly 0.465 billion tonnes for the financial year to June 2021 based on the latest greenhouse accounts) and assuming modest annual reductions on the way to the government’s politically calculated target of 43% by 2030, which will work out to about 0.351 billion tonnes emitted in 2030 compared with the 0.616 billion recorded in the reference year of FY2005. 

Climate pollution blankets

Why are carbon budgets important? Because emissions are cumulative, remaining in the atmosphere typically between hundreds and thousands of years depending on the particular type of greenhouse gas.

To put it another way, every year, we’re adding another blanket of heat trapping climate pollution, and most of the blankets stay on the bed for a century or more. The blankets don’t start to come off as emissions decline; only after we reach global net zero

(The notable exception is methane – the main ingredient in “natural” gas, which breaks down in one to two decades. Despite this, its concentration in the atmosphere has nearly tripled in the period that carbon dioxides has increased by 50%, and it is reckoned to contribute about 30% of the observed global heating.

Reducing methane emissions rapidly could see an observable reduction in global average temperatures. However, it would be offset by a heating pulse as aerosol pollution caused by burning fossil fuels – which currently has a cooling effect – decreases. Therefore, at least until global net zero, every decade will be hotter and more tempestuous than the one before.)

No change to business as usual

As the Federal budget is about to be delivered on Tuesday, the Climate Change Authority will be closing submissions on a public consultation that it will use to inform its recommendation to the budget for our 2035 emissions reduction commitment.

The CCA’s consultation paper signals their intentions via the headings “ambitious”, “achievable” and “advantageous” – it’s clearly after a target that doesn’t adversely impact business as usual, rather than one aligned with the science of maintaining a habitable planet.

The CCA will take into account the existing 2035 targets for Victoria (75-80%), NSW (70%) and Queensland (75%, which might not survive the next state election); factor the lack of announced targets for the other states and NT, and presumably recommend a national target of perhaps 60-70% off 2005 levels by 2035.

As should be evident by now, this is far from what the science requires.

Inconvenient truths

We’ll get the sort of target that will maintain the fiction that new coal and gas extraction for export projects are viable here because, hey, someone else burns the stuff so most of the emissions are not Australia’s problem. 

It is inconvenient that new satellite data is shining a light on fugitive emissions from such facilities – which can be double or more what is recorded (which would add 10% to Australia’s domestic emissions) – and to its credit the government is currently running a consultation proposing amendments to the current use of outdated industry coefficients that conveniently (for industry) vastly under-report.

On the other hand, it is not proposing to mandate the use of direct measurements that would uncover the full scale of the problem. 

But apparently, that’s OK, because carbon capture and storage will fix it, as we learnt last week in the government’s Future Gas Strategy. Albeit that, CCS at a gas wellhead is only there to capture carbon dioxide that comes out of the well amongst the useful methane gas.

And it only captures a fraction of that, as Chevron’s Gorgon debacle has shown. At best, if it even works, it captures about three fifths of stuff all of the total lifecycle emissions from gas, and it’s pretty difficult to trap vast quantities of fugitive methane escaping from a massive open cast coal mine.

While three-quarters of Australia’s gas is exported, another 10% on top is used by the gas industry for processing. In particular, liquifying gas to put it on a ship requires a lot of energy. Based on the latest government figures, 450 Petajoules (PJ) of gas were used locally to process 4,637 PJ for export.

Using the national greenhouse emissions factors, burning 450 PJ of gas produces over 23 million tonnes of greenhouse emissions, or 5% of Australia’s domestic total. Yet nobody is talking about carbon capture for those processing plants. 

All up, including under-reported fugitives, the 96 coal and gas facilities covered by the Safeguard Mechanism in FY22 data emitted over 16% of Australia’s total.

Obviously, as other sectors achieve genuine emissions reduction, this would become a far larger proportion of emissions. Given last year’s reforms to the Safeguard Mechanism, the government would have us believe that those emissions will be offset using carbon credits. It’s just another inconvenient truth that most carbon credits don’t do what it says on the packet.

The budget numbers you won’t hear on Tuesday

The fossil fuel industry and its media spruikers (lately including Masterchef) have carefully crafted a myth of economic indispensability. I’m sure we will not hear on budget night that fossil fuel production contributes a paltry <3% of total federal and state/territory government revenues while we subsidise them to the tune of around half that.

We won’t hear either that the market capitalisation of fossil energy stocks on the ASX continues to fall relative to the market as a whole, down to only 3.5%. We certainly won’t hear that the industry employs, based on generous estimates, less than 1% of the Australian workforce. 

And as Treasurer Jim Chalmers gravely intones about his government’s rather modest spending on climate action, we will definitely not hear that there is under four years left in the global carbon budget for a coin toss chance of making good our Paris obligation to deliver a safe future. That’s an inconvenient truth the government has chosen to ignore.

But hey, why let facts get in the way of a gaslit recovery?

David McEwen is a Director at Adaptive Capability, providing climate risk and net-zero strategy, program and project management. He works with businesses, community leaders, policy makers, designers and engineers to deliver impactful change. His book, Navigating the Adaptive Economy, was released in 2016.

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