Clean Energy Future package to transform economy, according to projections

The Gillard government’s Clean Energy Future package will reduce Australia’s greenhouse gas emissions and transform the economy, according to projections from the Department of Climate Change and Energy Efficiency.

The department’s latest greenhouse gas emissions projections, released yesterday, show that putting a price on carbon pollution allows Australia to reduce its net emissions by at least 155 million tonnes (Mt) in 2020 and 390 Mt in 2030.

In the period to 2030, almost 1.3 billion tonnes of domestic emissions reductions are expected to be driven by the carbon price and Carbon Farming Initiative, which is over two times the level of our current annual emissions.

The projections also show the carbon price will decouple growth in the economy from growth in pollution. The amount of net carbon pollution for every Australian will be halved from over 25 tonnes a year today to 13 tonnes a year by 2030.

Australia is currently the biggest per capita emitter of greenhouse gases amongst the world’s developed economies. The government’s policies, including the carbon price and the Renewable Energy Target, are intended to ensure we reduce pollution while maintaining strong economic growth.

Without a carbon price, the projections show Australia’s emissions will be 693 Mt in 2020, a 22% increase on 2000 levels. But with the carbon price in place, net emissions of no more than 537 Mt in 2020 should be delivered.

This meets the bipartisan target of reducing Australia’s net emissions in 2020 to 5% below their 2000 level. Over 750 Mt of carbon pollution need to be taken out of the atmosphere between now and 2020 to achieve this target.

The projections also show that the key measure of the emissions intensity of Australia’s economy - net emissions per dollar of GDP - declines from 2012. This indicates that the government’s policies will transform Australia’s economy to a clean energy future.

The amount of domestic and net carbon pollution generated for every dollar of GDP is projected to start falling significantly with a carbon price in place. Net emissions intensity of the economy declines by 28% between 2012 and 2020 and by a further 43% from 2020 to 2030.

The carbon price is said to drive significant abatement in all covered sectors of the economy while the Carbon Farming Initiative drives abatement in sectors not covered by the carbon price, such as agriculture and legacy waste.

The electricity, industrial process and waste sectors are projected to reduce their absolute emissions between now and 2020, with the impact particularly striking in the electricity sector. Between 2011 and 2030 domestic emissions are projected to fall by 26 Mt instead of growing by 46 Mt without a carbon price, a cumulative emissions reduction over that period of 477 Mt.

With the publication of the latest projections there is pressure on the Coalition to explain how it would achieve the 755 Mt of emissions reductions to 2020 and how it would transform the Australian economy towards clean energy sources.

For further information, visit www.climatechange.gov.au/projections.