RepuTex analysis indicates that Australia’s 5% emissions reduction target is at the lower end of the global scale, with the national target needing to increase by at least 10% to match other Annex I countries. While a more stringent target is not currently on the cards in Australia, as consultation begins on Direct Action we analyse the prospects for a 15% target to be adopted in 2015, and examine the mechanics for Direct Action Plan to scale up in the medium term.
- While the government has stated that the CCA’s pending Caps and Targets review will have no bearing on policy, the report will set expectations for the next emissions review in 2015.
- To fulfil Australia’s 5% emissions reduction target will require an average improvement of 20 Mt p.a, increasing by 39% if Australia shifts to a 15% target.
- Australia is the only developed country proposing a ‘grant-based’ scheme in place of a ‘market-based’ ETS.
- The majority of developed countries have committed to emissions reduction targets of between 15-30% from 1990 levels.
- The emissions targets of Australia, the US and Canada need to be increased to better match targets in other Annex I countries.
- The scalability of the government’s Direct Action Plan is likely to become a critical medium term issue for market participants.