When Australia announces its 2035 emissions target to the world, there will be a unique opportunity to promote Australia’s ambition to help other countries decarbonise through exports of renewable energy-based commodities, while coal and gas exports will fall.
Coal and gas exports from Australia are equivalent to well over a billion tonnes of CO2 when burned in other countries. That is around 3% of global fossil fuel CO2 emissions – far more than Australia’s greenhouse gas emissions at home that the national emissions target applies to.
Fossil fuels are set for long-term decline as the world decarbonises. Many fossil fuel exporters try to delay the change, but the smart thing for Australia to do is to embrace the alternatives – and to say so on the world stage. This can be a point of distinction if we host COP31 in two years’ time.
Our continent could become a major producer and exporter of energy-intensive products like iron, aluminium, fertiliser and synthetic fuels that are currently made elsewhere using copious amounts of coal, gas and oil. Our advantages are the practically limitless potential for solar and wind power, combined with abundant land, port access, resource industry expertise and a stable trade and investment framework. We should encourage import demand for clean products in other countries.
The emissions savings from moving to green commodities would be accounted where they displace conventional production. Nevertheless, it is in our hands to define the basic ambition – namely, that Australia’s contributions to global emissions savings through clean exports will eventually outweigh the amount of emissions inherent in Australia’s fossil fuel exports.
Australia becoming a net contributor to less global warming, rather than more, through our exports would be the explicit goal. And it could be illustrated with numbers.
Guessing the size of future clean export industries is difficult. But for illustration, if Australia processed all of the iron ore and alumina it exports using renewable energy, and also produced green fuels for export amounting to twice current LNG exports, then this would save in the order of 4% of global CO2 emissions.
It might not play out in this way, but equally it is not the limit. Production of green fuels, fertiliser and chemicals, and electricity exported by cable, could displace even larger amounts of emissions elsewhere.
As an indication on the fossil fuel export side, the International Energy Agency projects global coal use to fall by 88% and gas by 44% until 2050 in its “announced pledges scenario”. How quickly Australia’s exports might fall is a complex question, but fall they will.
If Australian green commodity exports grew linearly over time to displace 4% of current world emissions in 30 years’ time, and if coal and gas exports fell in line with the IEA demand scenario, then Australia’s export emissions balance would be net zero in the second half of the 2030s.
Thereafter, Australia’s export-based net contributions to emissions elsewhere in the world would be net negative. It would be a long time until fossil fuel exports through history would be compensated for, but ultimately even that goal would be achieved.
A goal along those lines could be communicated by Australia’s government in the Nationally Determined Contribution, the official document that needs to be submitted to the UN next year. The main point of the NDC is the target for national emissions, but the document can also state any other target, goal or intent.
Like the national emissions target, such an “NDC Plus” goal would not be legally binding. Yet it would certainly get attention. It would help create awareness and perhaps better preconditions for policy and investments in new clean energy export industries. It would help put Australia in a policy leadership position for COP31, as well as creating goodwill with Pacific neighbours.
A major fossil fuel exporter leading the charge about the opportunity in the transition away from fossil fuels would bring some much-needed positive momentum to international climate policy.
It may seem politically daunting to formally acknowledge the tremendous magnitude of emissions inherent in our fossil fuel exports. But guess what: the world already knows. Australia is widely and rightly perceived as a coal and gas giant.
Our long-term economic future is economic diversification and in clean commodities. We need other countries to achieve this vision. Leaning forward with the NDC is one of the ways to get there.
• Frank Jotzo is a professor at the ANU Crawford School of Public Policy
