Chris Bowen about to unveil government’s emissions target but pathway is the key
Perry Williams in the Australian on Friday reported the target would be in the lows 60s with a 65 per cent reduction target from 2005 levels tipped, which is up from 43 per cent by 2030.
The assumed range is between 65 and 75 per cent, the higher the better, but the target is simply that and the key is policy to get to those levels, and importantly oversight to provide some guarantee on its execution.
The target and pathway to hitting it will be used to establish Australia’s credentials to host next year’s Conference of the Parties, and market its commitment to the Pacific island nations.
The sectoral review will note how emissions can be cut in different sectors of the economy but will stop short of demanding specific action for fear of sparking a national debate with self-interested demands to not touch one sector or another.
Agriculture is one of the biggest beneficiaries of the carbon offsets scheme, as noted by Green Collar chair Brendan Foran citing Mike and Lucy Rosser’s farm west of Bourke in NSW.
This was achieved tapping carbon and nature markets through measures such as fencing, water collection, removing feral goats, laying 80km of poly pipe, and rotational grazing restoring land and nature once written off.
Another example is the work of the Tjaltjraak Native Title Aboriginal Corporation representing the Wudjari People, the not-for-profit Odonata Foundation and carbon developer Carbon Neutral restoring an old wheat and sheep property north of Esperance, WA into a biodiversity-rich area based around planting some 4.5 million trees on the 3955ha property.
The initial 900,000 trees planted on 400ha were effectively sold to France-based beauty group L’Oreal, international reforestation group OneTree Planted and Australia-based sustainable hat producer Will + Bear. The proceeds help the Wudjari to buy the land and future proceeds will help buy homes in town for the new owners.
It may be too much to ask from a conservative government, but an even better national result would be to combine the release of the 2035 target with a suite of whole-of-government policy decisions to help the economy get there.
The government is playing down hopes of major policy moves but establishing a target is at least a good first step.
Still, Bowen and the government have a long to-do list to boost the transition.
He has scheduled a 2026 year review of the safeguards policy, which forces big companies to cut emissions – but now only covers 28 per cent of the economy and arguably should be broadened to more companies with a faster mandated decline than the present 4.9 per cent a year.
The Climate Active scheme, rebranded in 2019 by the Morrison Coalition government, gives a gold star to companies which buy low-integrity offsets claiming emission reductions, when better higher-integrity incentives are needed.
The scheme has lost all credibility and Assistant Climate Minister Josh Wilson is working on a revamp.
The government needs to set targets to get the market working in the right direction including mandates on required levels of sustainable aviation fuels on planes.
Aviation accounts for about 5 per cent of Australia’s carbon dioxide emissions and liquid fuel is hard to abate, which is the attraction of fuel like SAF sourced from oil produced from canola, carinata and other crops.
Former ACCC chief Rod Sims and his Superpower Institute colleague, Ross Garnaut, argue: “A carbon price would significantly improve productivity by replacing ad hoc energy transition measures with what all economists agree is a much more efficient and market-driven means of reducing Australian emissions.
“It would build economic resilience by better positioning Australia to embrace its comparative advantage in producing transport fuel, fertiliser, polysilicon and other products in Australia.”
Bowen has mistakenly ruled out a carbon levy, but a carbon price is on offer via the Australian carbon credit unit scheme through which companies can buy Australian carbon credit units (ACCU) to offset emissions.
“There is a legitimate role for offsetting carbon emissions with credits from rigorously measured and accounted negative emissions from sequestration in soils, plants and geological structures,” Sims says.
The Australia Institute has lambasted the ACCU scheme, trading emission offsets, as being a sham endorsed by high-emission businesses which want to keep emitting, politicians who want to say they are doing something and carbon market advisers who collect on the proceeds.
It would rightly prefer direct action like putting a halt to Woodside’s North West Shelf project and shutting coal mines.
But the reality cited by the CSIRO estimates the bill for restoring biodiversity at almost $600bn every year for three decades – a quarter of our national economy.
Green Collar’s Foran agrees with the institute, saying “we should cut emissions as far and as fast as possible, but there will always be a remainder to account for. That is why the “net” in net zero matters. And that is why markets matter”.
“Abandoning markets because they aren’t perfect would be like refusing to repair a roof until we can design a house that never leaks,” Foran says.
“Polluters pay. Landholders deliver. The nation benefits.”
US tech giants Google, Meta, Microsoft and Salesforce have formed the Symbiosis coalition to buy up to 20 million tonnes of carbon by 2030 to offset their increased energy use that’s powering their AI transitions.
This model is being rolled out elsewhere funding carbon sequestration, but arguably it is better to work on ways to reduce consumption which comes when the price of each credit increases.
The funding is best supplied by the private sector, not taxpayers.
Every time a polluter buys a credit unit, the cost is shifted from taxpayers to those responsible, which is the principle Garnaut and Sims advocate in their call for a carbon levy – which would also raise money to help compensate those negatively impacted.
Bowen should take to the rooftops screaming his endorsement of his market-based ACCU policies as a way to boost much-needed investment.
He understands better than most that the market presents the most credible route to sustainable emission reduction.
Foran says: “There is no credible pathway to net zero that does not involve land-based sequestration.
“Markets are how we make the maths add up. In 2024 alone, more than a billion dollars flowed from major emitters to farmers, First Nations communities and conservation groups.
“That money funded fencing, water points, revegetation, fire management and soil health projects. It allowed people on the ground to make decisions that were good for their businesses and good for the environment at the same time.”
One alternative is to listen to the BCA complain that emissions reduction of 70 per cent-plus will cost $530bn. Another is to cite Deloitte’s study showing a 75 per cent reduction will boost GDP by $370bn.
Doing nothing sends the economy backwards at a time when China and Europe are spending big time on renewable energy.
Now comes Bowen’s big test.
There are other specific policies in place to reduce emissions, many of which have been found by the Productivity Commission to be extremely high cost per emission reduction.
For example, exemptions from fringe benefits tax and the luxury vehicles import tax for electric vehicles on novated leases.
The Productivity Commission estimates that the implied (“indirect”) price of carbon abatement from the policy is between $1000 and $20,000 per tonne.
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Climate Minister Chris Bowen is due next week to set Australia’s 2035 emissions reduction target, combined with the release of a level-six sector review of just how to get there.