Politics at play in Australia

This week we have seen the announcement by the Australian Government that the emissions trading scheme (CPRS) will be delayed by 12 months, along with some other changes in the policy framework. This comes as the government finds itself with the challenge of building the necessary political support in the Australian Parliament, particularly the Senate, where it does not have a majority.

Many others will write about the politics, so I will stay out of this and focus on the implications of this delay. To do that, it is helpful to look at the Shell Energy Scenarios, which were released about a year ago.

Of the two futures set out, Blueprints (the other scenario being Scramble) showed a pathway forward that results in real and substantive global action on climate change. Despite this, the scenario falls short of the reductions that scientists now tell us are needed by 2050 – a 50% reduction against 1990. This is largely because of the time it takes to bring global emissions under control, resulting in an emissions peak some ten years too late (~2028 vs. 2018). Once the peak is passed though, Blueprints sees very rapid reductions.

The message from Blueprints is that what happens over the next few years is critical. A great deal of analysis went into the early years of the scenarios, the societal trends that would underpin change and of course the legacy emissions base that continues to be expanded upon every day – and that is a 30-50 year legacy. Delay now has serious impacts later – to the extent that we end up needing an infeasible reduction pathway post the peak, should that peak drift out. This finding was backed up by the McKinsey work on global abatement, which came to the conclusion that it is still just techncally feasible to deliver the 50% reduction, but with no scope for slippage.

Whilst it should be noted that the Australian Government has proposed a more challenging target for 2020, it is the delay that is problematic. Delays have a habit of compounding, as others see that the urgency is reduced.

To add to the issue, Australia is setting out as a leader in Carbon Capture and Storage – probably a must for its future given the abundance of coal. If this should also suffer a year or more delay as a result of a slower start to the development of the CO2 price that it needs, that may also lead to delay globally. A calculation that came from the model behind the Shell Scenarios indicated that for every year we delay the global roll-out of CCS, so we commit ourselves to a 1 ppm higher CO2 stablilization by the end of this century.