Opinion: Emissions target confusion will hit economy hard

Originally published in The Daily Telegraph, 30 July 2024 – view as printed

Before federation, the Australian colonies developed their railway networks independently of each other. Rail lines of at least three different gauges or widths were built across the colonies, causing transport disruptions for over a century.

State-based emissions reductions targets are fast becoming the rail gauge problem of today.

The Australian Government has a national emissions reduction target of net zero by 2050. A policy called the ‘Safeguard Mechanism’ is the mechanism to achieve this target, with a set of rules and obligations for the industries covered.

At the same time, each state has its own emissions reduction targets, with different timeframes, targets and pathways to achieving their own net zero commitment.

There’s an overarching commitment to net zero by 2050, but there the alignment ends.

Nationally, the Commonwealth also has a 43 percent emissions reduction target by 2030, but has not yet set a 2035 target.

NSW has a 50 percent target by 2030 and 70 percent by 2035. Victoria is targeting a 75-80 percent reduction by 2035, and a 2045 net zero target. Queensland is targeting a 75 percent cut by 2035.

Elsewhere, South Australia has a 50 percent target by 2030, Tasmania is targeting net zero by 2030, while WA does not have a 2030 target at all.

In addition, states also have their own emissions accounting frameworks, with additional rules and obligations within their borders. It’s another level of complication, even before taking into account the many different departments and agencies involved across all these governments.

These include the various departments of environment, climate change, energy, planning, and others nationally and across the states, as well as the state-based Environmental Protection Authorities, and others like the NSW Net Zero Commission, the national Climate Change Authority, and the soon to be established national EPA.

It means there are thousands of bureaucrats doing much the same work, assessing and counting the same emissions, but under different systems and processes, to prepare different reports for different governments at different levels. There must barely be time to attend the many conferences, events, keynote speeches, and expert panels regularly held on these matters.

The inconsistencies resulting from separate state-based targets are set to hit key sectors of our economy hard, threatening the unnecessary loss of investment and jobs.

For example, mining projects in NSW operating within the Commonwealth’s emissions reduction framework face additional requirements that put their viability at risk. The same will apply for energy intensive industries like heavy manufacturing. This is largely because the NSW Government is imposing state border controls on national emissions reductions efforts.

Under the Commonwealth system, projects can purchase carbon offsets from anywhere in Australia when abatement measures are not yet available. These offsets are counted towards the Commonwealth’s national emissions reduction target.

However, the NSW Government has adopted a very different approach. Offsets from outside NSW do not count towards the NSW target, so they are disregarding the Commonwealth scheme and setting up a separate set of rules in NSW.

This also means the NSW Government’s ‘net-zero’ targets aren’t ‘net’ targets at all. Offsets counted as reductions in the national framework aren’t being counted in NSW, underestimating our progress, and making it harder than it needs to be for NSW to meet its ‘net-zero’ targets.

After federation, it took another 90 years and massive spending to finally achieve a nationally connected standard railway system. The economic cost of this folly to our country over many decades was huge.

Like the railways, Australia’s emissions targets must be aligned, or history will once again repeat itself.

Stephen Galilee
CEO NSW Minerals Council