Climate change

Purpose: Develop and implement a national response to climate change

Reduce Australia’s greenhouse emissions and support adaptation to climate change

The Department helps to develop and implement a national response to climate change through policies and programs that reduce emissions by boosting energy productivity, reducing waste, increasing renewable energy and driving innovation. The Government’s policies are addressing climate change while helping to reduce costs for households and businesses.

Emissions Reduction Fund

The Emissions Reduction Fund provides incentives for emissions reduction activities across the Australian economy through crediting, purchasing and safeguarding reductions. As at 30 June2016, the Emissions Reduction Fund had contracted 143 million tonnes of emissions reductions over three auctions at an average price of $12.10 a tonne. The safeguard mechanism, introduced on 1July2016, will ensure that emissions reductions that the Government has purchased are not displaced by significant increases in emissions above business-as-usual levels elsewhere in the economy. This mechanism requires Australia’s largest emitters to keep emissions within baseline levels. It will cover around 140 large businesses that have facilities with direct emissions of more than 100,000tCO2-e a year. This represents about half of Australia’s emissions.

During 2015, the Department established the legislative framework so that the safeguard mechanism could begin operating from 1July2016. The National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 became law in October 2015. Its timely passage was made possible by broad and effective consultations with other government agencies, interested businesses and members of the community.

Emissions reduction targets

Australia is on track to meet its 2020 target reducing its emissions to five per cent below 2000 levels by 2020. At the Conference of the Parties to the United Nations Framework Convention on Climate Change (UNFCCC) in December 2015, Australia committed to reduce its emissions to 26–28per cent below 2005 levels by 2030.

Renewable Energy Target

The Renewable Energy Target is designed to reduce emissions of greenhouse gases in the electricity sector and encourage additional generation of electricity from sustainable and renewable sources. Itworks by creating a market that provides financial incentives to both large-scale renewable energy power stations and the owners of small-scale systems. Every megawatt hour of energy they generate from a sustainable or renewable source creates a certificate that they can sell to electricity retailers, which then sell the electricity to householders and businesses. The electricity retailers have legal obligations under the target to surrender certificates to the Clean Energy Regulator, in percentages set by regulation eachyear.

International engagement

The Department leads Australian negotiations on land sector issues through the UNFCCC and builds support for rainforest recovery efforts as well as other activities. Australia has internationally recognised expertise in estimating greenhouse gas emissions from the land and forest sector. The ability of countries to accurately measure, report and verify land sector greenhouse gas emissions will support efforts to slow, halt and then reverse vegetation loss across the Asia-Pacific region. We shared our emissions accounting expertise through a range of successful capacity development projects in 2015–16.

Through the Department, Australia is contributing to the Global Forest Observations Initiative by developing methods and guidance documentation for measurement, reporting and verification capacity building to reduce emissions from deforestation and forest degradation and to foster conservation, sustainable management of forests and enhancement of forest carbon stocks (see the case study ‘Global Forest Observations Initiative’ on page 64).

International capacity development projects supported by the AustralianGovernment

System for Land-based Emissions Estimation in Kenya (SLEEK): The SLEEK Program is allowing the Government of Kenya to implement a measurement, reporting and verification system for the land sector, enabling emissions reporting to the UNFCCC. The system has broader application for natural resource management and can inform improvements to agricultural productivity. Australia has been involved in the program’s design and delivery since March 2012. The system has been functional and under full ownership of the Kenyan government since May 2016. In July 2015, the SLEEK Program Management Unit was established in the Kenyan Ministry of Environment and Resources. The unit will have ultimate responsibility for the administration of all aspects of SLEEK. During 2015–16, day-to-day responsibilities were transferred from the implementing partner to the unit.

Indonesian National Carbon Accounting System (INCAS): Australia has helped the Indonesian government to successfully develop a national land sector accounting system consistent with international best practice for emissions measurement, reporting and verification. Indonesia now has a world-leading forest monitoring system that informs the development of forest conservation policies and facilitates international reporting, including the submission of land sector emissions reports to the UNFCCC. INCAS was officially launched at the Global Landscapes Forum side event at the Conference of Parties to the UNFCCC in Paris in December 2015 and was endorsed by Indonesia’s Minister of Environment and Forestry.

South African measurement, reporting and verification capacity development: Australia has helped South Africa to develop a strategic plan to measure, report and verify its land sector emissions. This is allowing South Africa to fulfil its UNFCCC reporting requirements, undertake domestic mitigation actions and participate in future carbon market mechanisms. The strategic plan was finalised in February 2016, and the Department is supporting its initial implementation until March 2017.

The Department has begun bilateral cooperation with China and Thailand to help with their capacity for greenhouse gas emission measurement, reporting and verification systems. Robust systems will be essential for the successful implementation of the Paris climate change agreement.

Climate change adaptation

The Department supports research and produces practical information and tools for businesses, governments and communities to help them identify climate change impacts and appropriate actions they can take. Our climate adaptation work links closely with our environmental science and research enabling activity (see pages 82–86).This work improves our understanding of climate change and promotes informed decision-making.

For example, we are working with the National Climate Change Adaptation Research Facility to develop a coastal climate risk management tool that will provide local governments and communities in the coastal zone with the skills, information and tools to support effective decision-making. We publish methodologies that help Australian businesses and households to take practical, direct action to improve energy efficiency and save money on their electricitybills.

In December 2015, the Australian Government released its National Climate Resilience and Adaptation Strategy. This strategy sets out how Australia is managing climate risks for the benefit of the community, economy and environment. It identifies a set of principles to guide effective adaptation practices and resilience building, and outlines the Government’s vision for the future. As part of the strategy, the Department has:

  • established a Commonwealth interagency working group to consider cross-cutting risks and opportunities arising from climate change and natural disasters and to lead future consultation with business and communities about building resilience and adapting to climate change
  • engaged the Environment Institute of Australia and New Zealand to implement the Learning to Adapt: National Climate Change Adaptation Professional Development Program. Thecourse was delivered in three modules over three days during April, May and June 2016 and attracted strong interest from Commonwealth, state, territory and local government representatives. An action-learning approach whereby participants volunteer projects and conduct them in the workplace context has encouraged peer-to-peer learning and the development of new communities of practice.

The Climate Change in Australia website, developed in collaboration with Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Bureau of Meteorology, provides comprehensive technical and regional reports, a wealth of data, decision-making tools and other resources. Between January 2015 and February 2016, the website received over 120,000 unique site visits and attracted over 800 registered users. Feedback on the value of the reports and the projections of future climate on the website indicated broad use by a variety of research users and decision-makers.

www.climatechangeinaustralia.gov.au

Results against key performance indicators

Objective: Meet Australia’s greenhouse gas emissions reduction targets

Criterion / Australia’s annual emissions are consistent with meeting the Government’s 2020 target to reduce emissions by5per cent based on 2000 levels
Result / Achieved
The Department published Australia’s emissions projections, Tracking to 2020, in December 2015 and updated them in a fact sheet released in April 2016.
www.environment.gov.au/climate-change/publications/factsheet-tracking-to-2020-april-2016-update
The latest release indicates that Australia is expected to surpass its 2020 cumulative abatement task by 78 milliontCO2-e and is better placed to achieve its 2030 target of reducing emissions to 26–28 per cent below 2005 levels. The December 2015 projections were included in Australia’s second biennial report to the UNFCCC.
www.environment.gov.au/climate-change/publications/australias-second-biennial-report
In May 2016, in accordance with Australia’s obligations under the UNFCCC and the Kyoto Protocol, theDepartment submitted the annual national inventory report on Australia’s greenhouse gas emissions for 1990 to 2014. A United Nations in-country audit of the report in September 2015 confirmed that our emissions estimates are generally of a high standard while making a series of recommendations we need to implement to improve the inventory and ensure compliance.
The Department is responsible for producing the National Greenhouse Accounts—a suite of publications and databases that estimate and account for Australia’s greenhouse gas emissions. The latest quarterly update of the National Greenhouse Accounts, released in May 2016, report that Australia’s emissions were 2.5 per cent below 2000 levels in the year to December 2015.
www.environment.gov.au/climate-change/greenhouse-gas-measurement/tracking-emissions
Criterion / Percentage of national emissions covered by Emissions Reduction Fund methods
Result / Achieved
Methods for estimating emissions reductions from different activities are now available across the economy, covering a diverse range of emission sources. Methods are formalised through legislative instruments that define eligible emissions reduction activities as well as how the reductions are to be measured, verified, reported and monitored.
Thirty-three methods are in operation for a range of activities across the economy. Figure2.2 shows that the methods cover most sources of Australia’s greenhouse gas emissions. The safeguard mechanism limits emissions from the electricity and industrial sectors.
Ten of the 33 available methods were added in 2015–16. As a result of these new methods, businesses and landholders can undertake a range of activities to reduce emissions in the transport, industrialand agriculture sectors and earn carbon credits. For example, beef producers could reduce emissions from their herds by changing management practices and companies may install high-efficiency fans in buildings to reduce their energy use. More information on the methods available is on our website.
www.environment.gov.au/climate-change/emissions-reduction-fund/methods

Figure 2.2: Sources of Australia’s greenhouse gas emissions by inventory sector and available Emissions Reduction Fund methods to reduce greenhouse gas emissions in
those sectors

Source: Quarterly update of Australia’s National Greenhouse Gas Inventory, December 2015.

Criterion / Increase in the number of Australian carbon credit units issued
Result / Achieved
Every tonne of emissions reduced or stored through an Emissions Reduction Fund project earns one Australian carbon credit unit.
In 2015–16, there was an increase in the number of units issued. As of 30 June 2016 a total of 26,162,256units had been issued—an increase of 25,447,053 since August2015. The Clean Energy Regulator is responsible for administering the Emissions Reduction Fund including issuing Australian carbon credit units. More information is on the Clean Energy Regulator website.
www.cleanenergyregulator.gov.au/ERF/project-and-contracts-registers/project-register
In partnership with the Regulator and AusIndustry, the Department engages with businesses and landowners to raise awareness of the opportunities available under the Emissions Reduction Fund. During 2015–16, we engaged with more than 450 stakeholders, representing more than 300 organisations. With participation from the Clean Energy Regulator and AusIndustry we ran a series of briefings and workshops around the country about the fund. These stakeholder engagement activities increased participation in the Emissions Reduction Fund and, ultimately, the amount of abatement achieved through projects and therefore the number of Australian carbon credit units issued.
Criterion / Compliance with Emissions Reduction Fund safeguard mechanism—covered facilities do not exceed safeguard mechanism baselines
Result / Data/information not available or incomplete
In 2015–16, the Department established the legislative framework for the safeguard mechanism to begin operating from 1 July 2016. The National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 became law in October 2015.
The safeguard mechanism applies to facilities that emit more than 100,000tCO2-e a year. These facilities must maintain their emissions at or below a baseline level set by the Clean Energy Regulator. As the safeguard mechanism began on 1July 2016, facilities were not required to comply with baselines during 2015–16.
The safeguard mechanism is complemented by the Emissions Reduction Fund’s crediting and purchasing elements.
Criterion / The uptake of additional renewable energy is encouraged and the Renewable Energy Target is achieved
Result / Partially achieved
The Renewable Energy Target is made up of two schemes: the large-scale Renewable Energy Target and the small-scale Renewable Energy Scheme.
Large-scale Renewable Energy Target
The annual large-scale target for 2015 of 18,850 GWh was met through a combination of large-scale generation certifications generated in 2015 (approximately 15,200GWh) and surplus certificates generated in previous years.
In the Renewable Energy Target 2015 Administrative Report and Annual Statement released on 4May 2016, the Clean Energy Regulator advised that progress towards the 2020 large-scale target was adequate under the circumstances and that the 2020 target was achievable. The Clean Energy Regulator estimates that around 3000MW of additional projects need to be committed in 2016 to avoid shortfalls in certifications in 2018. Between 1January and 30June 2016, there were 10 new projects committed, with 344MW of capacity.
Small-scale Renewable Energy Scheme
As at 30 June 2016, over 2.54million small-scale systems had been installed under the Small-scale Renewable Energy Scheme. It is estimated that small-scale renewable energy systems, such as household photovoltaics, will generate around 6600GWh a year, while solar hot water systems and air source heat pumps will displace around 3200GWh a year.

Objective: Contribute to the negotiation of an effective global solution to climate change

Criterion / Key countries and civil society organisations from across the region commit to a collective plan to slow, halt and then reverse the loss of tropical rainforests across the Asia-Pacific region
Result / Achieved
Through the Asia-Pacific Rainforest Partnership, the Australian Government has been supporting efforts to build capacity in the region to reduce greenhouse gas emissions from the land sector and avoid further deforestation. The Asia-Pacific Rainforest Partnership is a network of regional governments, private sector organisations and civil society that provides a platform for the practical implementation of the Paris Agreement under the UNFCCC and of the convention’s Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (REDD+) program.
Under the Asia-Pacific Rainforest Partnership, a private sector roundtable that includes executives from the timber, palm oil, finance and agribusiness sectors has been established. It aims to encourage private sector finance to flow to forest conservation and best-practice landscape management activities.
The Department helped the Government of Brunei Darussalam to host the second Asia‑Pacific Rainforest Summit in August 2016. Attendees included major international climate change donors, regional governments, the private sector and civil society.
More information on our forest conservation activities in the Asia-Pacific region is on ourwebsite.
www.environment.gov.au/climate-change/rainforest-recovery

Objective: Improve understanding of climate change impacts and inform decision-making

Criterion / Independent evaluation of the effectiveness of the National Climate Change Adaptation Research Facility program undertaken by 30June 2017 demonstrates:
  • number of end-users engaged in the design of a coastal risk management tool
  • number of coastal communities using the information and tools from the project to inform local policy and plans
  • the degree of awareness among relevant government agencies, coastal councils and business and industry groups of National Climate Change Adaptation Research Facility Phase 2 outputs, and
  • the extent to which the risk management tool is aligned with state and territory government initiatives in climate change adaptation in the coastal zone

Result / Partially achieved
In October 2014, the National Climate Change Adaptation Research Facility (NCCARF) appointed an independent organisation, Coutts J&R, to design and conduct a monitoring and evaluation framework for this program. The work is due for completion in 2017. Coutts J&R is reporting to the Department and NCCARF quarterly. It delivered a mid-term review in February 2016, which will be published shortly on the NCCARF website. The final evaluation report is due in October 2017.
www.nccarf.edu.au/biblio
The mid-term review reported that NCCARF had ‘met its milestones to date and is on track to deliver its contracted outputs in the time allocated’. Specifically:
  • In the development of the online coastal climate risk management tool, NCCARF had ‘meaningful engagement with a range of stakeholders—including potential end-users’. More than 600 people have attended workshops or participated in surveys, across all states and territories, in capital cities and regional locations. User testing of a draft version of the coastal tool commenced in July 2016.
  • Stakeholders and potential end users have strongly endorsed the synthesis information and tools. Those involved with the NCCARF engagement process said they were ‘very satisfied with the direction, approach and development of the synthesis products’.
  • All four NCCARF adaptation research networks, hosted by universities across Australia, have been established. The mid-term review states that they are ‘fantastic as a resource, information hub and networking platform; a useful tool to bridge research and practice; and [are] progressing well’.
www.nccarf.edu.au
Criterion / Information on climate change projections and adaptation approaches is well targeted to the needs of regional natural resource management organisations and other decision‑makers
Result / Achieved
The Regional Natural Resource Management Planning for Climate Change Fund (2013–16) supported regional NRM organisations to adapt to and plan for climate change impacts and maximise the environmental benefits of carbon-farming projects and biodiversity activities. An independent evaluation of stream two of the fund, finalised in July 2016, found that the climate change information outputs and engagement activities, along with the Climate Change in Australia website, have made high-quality, regionally specific climate change information more accessible and increased the capacity of NRM planners across the country to use it. This evaluation will be published on our website.

Analysis against purpose

Australia is on track to meet its 2020 emissions reduction targets, has improved understanding of climate change impacts and supported an effective international response.