Australia sets net-zero goal but sees future for fossil fuels

Australia’s Prime Minister finally agreed to a plan to zero out its carbon emissions by 2050, but said he wouldn’t enshrine the target in law, and would continue to rely on fossil fuels and projects designed to offset planet-warming greenhouse gases.

Prime Minister Scott Morrison announced the target days before he’s scheduled to head to Europe for G-20 talks and then the COP26 climate summit in Glasgow. It follows a new round of fractious domestic debate on climate policy, an issue that’s riven Australia’s politics for more than a decade and comes after pressure from allies including the U.S. to show more urgency in action to limit global warming.

“We will set a target to achieve net zero by 2050, and have a clear plan for achieving it,” Morrison said in an emailed statement Tuesday. “We won’t be lectured by others who do not understand Australia. The Australian Way is all about how you do it, and not if you do it. It’s about getting it done.”

Despite the headline target, Bill Hare, chief executive officer of Climate Analytics, said Morrison’s plan would only reduce emissions 65 per cent to 73 per cent by 2050. Additional savings delivered through “land sector sequestration & targeted purchases of international offsets” would reach an 85 per cent cut. The plan also heavily relies on technologies such as carbon capture and storage, which would allow Australia to continue burning fossil fuels, but are still too expensive to be rolled out widely, he said. 

“Morrison’s plan changes nothing in Australia’s policy settings,” said Hare. “It’s a very glossy and slick advertising move with no substance,” and appears to go along with the government’s current strategy of replacing coal with subsidized natural gas, he said.

The government will stick with its 2030 goals that have been criticized by activists and business leaders alike as too weak, adding to the sense that timid pledges from developed nations are stifling prospects for major progress at the climate talks. His government also refused to put the target into law as other countries have done.

While Australia is the latest in a string of countries to set mid-century net-zero goals, the Paris Agreement is focused on the shorter term. The deal requires countries to set targets for the end of this decade in order to encourage investment in green technologies. The United Nations yesterday said those plans are still too weak and that the world remains on track for 2.7 degrees Celsius of global warming compared to pre-industrial levels.

Meet and Beat

Morrison on Tuesday reiterated that Australia was on track to “meet and beat” its target, forecasting a cut of as much as 35 per cent by 2030 from 2005 levels compared with the official commitment for a 26-28 per cent reduction. 

“Investors are ready to invest billions, not millions, in Australia’s transition to net zero,” Rebecca Mikula-Wright, the chief executive officer of the Investor Group on Climate Change, said in a statement. “Australia not updating its 2030 target in line with commitments under the Paris Agreements is of deep concern to investors.”

Australia is one of the top suppliers of fossil fuels, and the sector accounts for almost a quarter of its export earnings.

Morrison has frequently ruled out taxes for carbon emitters, and backed the country’s top emitters to devise the best solutions to help Australia hit net zero. On Tuesday, he said new coal-fired power stations could still potentially be built under his plan, with the fuel responsible for the bulk of the nation’s electricity generation.

© 2021 Bloomberg L.P.

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