CSIRO study upends assumptions about domestic cost of tougher action on climate change, finding reducing emissions a ‘win-win’ for environment and economy
Australia can have stronger economic growth, much lower greenhouse gas emissions and a better environment – without individuals needing to make major lifestyle changes – if politicians take tougher action to reduce greenhouse emissions now, ground-breaking new modelling has found.
The CSIRO Australian National Outlook study upends traditional assumptions about the domestic impact of taking part in strong international action on climate change, finding that ambitious global action opens a possible “win-win” outcome for Australia even in the near term.
The dramatic rethink occurs because storing carbon through reforestation and other land use changes becomes a more profitable revenue earner than some existing farming, providing income that more than makes up for reduced fossil fuel exports or the costs of Australia meeting its own deeper greenhouse gas reductions.
“These win-win outcomes occur because carbon sequestration becomes more profitable than beef and other agricultural production across large areas of Australia (up to 58m hectares) … in a world taking stronger action to reduce emissions,” 17 academics associated with the study explain in an article in the prestigious international journal Nature.
“Stronger abatement incentives also promote electrification and the use of biofuels in road transport, reducing oil imports. These economic gains outweigh the costs of more stringent national emissions targets, as well as the impacts of lower global demand for (and value added from) Australia’s emissions-intensive exports, relative to moderate national and global abatement.”
A team of 40 researchers from CSIRO have integrated modelling of global economic demand and climate policy ambition with possible Australian government policy choices on climate, water, energy use and agricultural land use as well as individual choices about working hours and consumption, to look at possible scenarios for Australia’s economic and environmental future out to 2050.
They conclude that government choices will make the biggest difference, and Australia has the chance to combine strong growth and a strong environmental performance without any major shift in the attitude of its citizens to consumerism, and without any startling new technological developments.
“Decoupling economic growth from environmental pressure before 2050 would not require a change in societal values, but is not automatic … It is not projected to occur under existing trends, and requires, in our scenarios, collective choices to increase global and national abatement efforts,” the study finds.
The research shows that it would be in Australia’s best interests to push for much tougher global climate action and to build a higher effective carbon price into its domestic calculations than is currently the case.
It considers a moderately ambitious scenario where Australia starts with an effective carbon price of US$15 per tonne this year, a “strong scenario” with a starting carbon price of US$30, and a “very strong” scenario with a starting price of US$50 a tonne. The Coalition’s “Direct Action” policy has bought some greenhouse abatement for around A$15 a tonne, about US$10 at the current exchange rate.
“Across all scenarios analysed, we found that those scenarios where Australia and the world take stronger action to reduce greenhouse gas emissions show higher long-term economic growth and better environmental outcomes compared to scenarios that continue current trends,” the study found.
In the Australian debate, higher effective carbon prices have been rejected because of the potential impact on household electricity bills. According to the CSIRO research, household electricity bills would be 11% to 12% higher by 2050 under the “strong” scenario or 32% higher under the “very strong scenario” compared with no policy action. But it argues affordability would be about the same because households would enjoy higher incomes and energy efficiency would improve.
The win-win scenarios occur when government policy unlocks emissions reductions across all sectors – with electricity, industrial emissions and transport delivering 40% to 75% of cost-effective national abatement by 2050 and land-based carbon storage (or sequestration) supplying 30% to 40% of total abatement in the “strong” and “very strong” scenarios. The study says reforestation becomes attractive under an effective carbon price of $A40 to $60, which Australia would reach by 2020 with very strong global abatement (on track to 2°C) and before 2030 in the strong global abatement scenarios.
“Stable and predictable policy settings are also required, as to be effective in reducing emissions carbon plantings must be maintained for a 100 years or more,” the study finds.
Direct Action originally required 100-year pledges for carbon sequestration projects but has since reduced that to 25 years for soil carbon. Many business groups expect Direct Action to be modified when the Turnbull government conducts a review in 2017, after the next federal election.
The study measures the importance of carbon capture and storage technology to the long-term future of coal in global electricity generation – predicting it would increase by between 10% and 51% by 2050 if CCS is available and fall by between 7% and 63% if it is not.