Australia has no coordinated plan for transitioning its economy towards maintaining global warming below 1.5°C and achieving its emissions targets, research by the Institute for Energy Economics and Financial Analysis has found.
While countries such as Germany, China and France all have pathways to transition their emissions-intensive sectors toward a low-carbon future, Australia instead relies on forecasts for the electricity and gas sector set out by the Australian Energy Market Operator, which the report argues contradict each other and don’t do enough to satisfy the country’s commitments under the Paris Agreement on Climate Change.
IEEFFA is calling for the establishment of pathways to help different sectors, fuel types and technologies transition and meet Australia’s 43 per cent by 2030 emissions reduction target and its net zero by 2050 pledge.
“The pathways should support planning decisions and make recommendations on which new supply projects are essential, on timelines for phasing out key infrastructure assets, and on priority usage for scarce resources,” the report noted.
Australia’s emissions target in itself is inconsistent with the global 1.5°C goal, according to IEEFFA, which states that developed countries including Australia need to exceed the global average in emissions reductions and cut theirs by around 60 per cent by 2030 compared to a 2010 baseline. Other studies have found that Australia would need to decrease its emissions by up to 74 per cent by 2030 compared to a 2005 baseline in order to align with the 1.5°C goal.
Besides the emissions reduction target, the Australian government has also committed to ramping up renewable energy to 82 per cent of the total energy mix by 2030 and becoming a global hydrogen leader.
IEEFFA claims that AEMOs electricity forecasts in its Integrated System Plan do not account for the enormous amount of renewable energy Australia will need to install to produce the amount of hydrogen needed to be a global leader.
Under AEMO’s Hydrogen Superpower forecast in the ISP, the country will need to double its large-scale wind and solar capacity and increase this by as much as four times by 2050 to be about to produce the required amount of hydrogen.
Other plans and forecasts Australia has announced this year are also not accompanied by pathway analysis to provide a journey for meeting the stated targets.
Australia joined the Global Methane Pledge to reduce those emissions by at least 30 per cent below 2020 levels by 2030 but has not specified a target and has not set a target for the nationwide adoption of EVs despite adopting a National Electric Vehicle Strategy earlier this year.
Overall, IEEFFA believes the government focuses too much on the supply side and not enough on demand side measures for emissions-heavy industries and lacks a nationally consistent approach to how the energy transition will unfold and how sectors will be affected.
“To put it simply, the left hand of the government does not know what the right hand is doing,” the report stated.
Gas forecasts are inconsistent with Victoria’s targets
IEEFFA has also pointed out inconsistencies between the ISP and AEMO’s Gas Statement of Opportunities, which makes predictions about the size and structure of the gas market.
Scenarios for gas demand are inconsistent with Victoria’s emissions targets which are more ambitious than the national level ones and contains different forecasts for gas use in energy generation to those outlined in the ISP.
By focusing more on distributed energy resources, such as rooftop solar, the government could use future demand scenarios to steer the energy transition, rather than it being dictated by supply-side forces, IEEFFA stated.
The report also noted the importance of outlawing new oil and gas developments and limiting future demand for these resources using measures such as electrification targets.
IEEFFA counsels that energy pathways should align with the global 1.5°C goals, be consistent with all federal and state emissions reduction targets, offer an integrated and consistent approach for electricity and fuels transitions and consider both demand and supply side solutions.