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Driving innovation in sustainability reporting.Chair: Eszter Vitorino Füleky, Network Relations Manager, Global Reporting Initiative.Stephen Driscoll, Director Sustainability & Policy; Development Director rouse Hill, LandcomGeoff Miller, General Manager, Standard Business Reporting Division, Commonwealth TreasuryAnna Skarbek, executive Director Climate Works
Opportunities to reduce emissions in Australia& why it’s important to record the early movers
Presentation to GRI conference, Melbourne 27 March 2012Anna SkarbekExecutive Director, ClimateWorks Australiawww.climateworksaustralia.org
-5%
Australia’s Government has committed to reduce emissions by between 5% and 25% below 2000 levels by 2020 – yet emissions will rise by 24% under Business-As-Usual
Australian emissions of greenhouse gases
Mt CO2e
650
700
600
550
500
450
0
202020102000
558
1990
2000 levels
Minimum national emissions reduction target531
Minimum recommended emissions reduction by the scientist community
418
Business-as-usual690
+24%159 MtCO2e needed to reach the 5% target
272 MtCO2e needed to reach the 25% target
SOURCE: Department of Climate Change (DCC), Australia's emissions projections 2010, December 20103
-25%
Cost to investors ofemissions reduction A$/tCO2e
250
200
150
100
50
0
-50
-100
-150
-400
Emissions reduction potentialMtCO2e per year
200150100500 250
SOURCE: ClimateWorks Australia, Low Carbon Growth Plan for Australia
ClimateWorks’ Low Carbon Growth Plan identifies potential to meet the 25% target … provided policies can stimulate this
2020 Australia GHG emissions reduction investor cost curve
5% reduction
target
25% reduction
target
IndustryPower
Transport
BuildingsForestryAgriculture
GHG reduction, MtCO2ePercent of total opportunity
Average cost, A$/tCO2e
Economically attractive Moderate cost Higher cost
22% 61 Mt -$110 48% 131 Mt $12 29% 80 Mt $109
energy efficiency
cleaner powerland
4
0
250
50
100
150
200
-350
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-300
-250
-200
-150
-100
-50 150100500
250
150
100
50
0
-50
-150
-200
-250
-300
-350
-400
200
-100
200
250-50
50
100
150
200
250
250
-400
50 100 150
-350
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0
-300
-250
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-200
-150
-100
The carbon price package will make it more profitable to do the lower cost activities …
SOURCE: ClimateWorks Australia, Low Carbon Growth Plan for Australia; Australian Government, Securing a Clean Energy Future; ClimateWorks Australia analysis
2020 Australia GHG emissions reduction investor cost curve (from 2012 on)Cost to investors of emissions reduction with carbon priceA$/tCO2e
Emissions reduction potentialMtCO2e per year
High to very high
Medium
Low to very low
Non-price barrier burden
5
200
150
-50
-100
-150
-200
-250
100
50
0
240160
Abatement potentialMtCO2e
800
Commercial retrofit energy waste reduction
Residential appliances and electronics
Commercial retrofit HVAC
Other industry energy efficiency
Commercial retrofit lighting
Residential lighting
Residential new builds
Mining energy efficiency
Diesel car and light commercial efficiency improvement
Commercial elevators and appliances
Petrol car and light commercial efficiency improvement
Operational improvements to existing coal plant thermal efficiency
Reduced T&D losses
Operational improvements to existing gas plant thermal efficiency
… and these already offer opportunities to save money for operators of plants, infrastructure, buildings and vehicles
2020 GHG emissions reduction investor cost curve in 2011Other
Profitable energy efficiency opportunities
$5 billion net annual savings1 are available to Australian businesses and households though improved energy efficiency
1 Value of savings in 2020 from actions conducted in next 9 years, before the carbon price
Evidence of benefits:
The Energy Efficiency Opportunity program (the EEO program) mandates energy efficiency assessments and reporting by the 199 largest energy using businesses in Australia. The mid-cycle review was conducted at the end of financial year 2008/09 after 3.5 years of operation. It found that:
The energy savings with a payback of 4 years or less identified amount to a 7% reduction on business-as-usual energy use
This corresponds to 93.1 PJ, or 2.4% of total Australian energy use in 2009
It represents $1 billion in net annual financial savings for those companies
SOURCE: ClimateWorks analysis; DRET, Energy Efficiency Opportunities Program: Mid-Cycle Review, Dec. 20106
Cost to investorsA$/tCO2e
Yet no national reporting system will capture these early success stories … creating risk of further future policy instability
Elements
SOURCE: Australian Government, Securing a Clean Energy Future; ClimateWorks Australia analysis
Reporting Impact
A carbon price Only top ~500 emitters require carbon permits
No trading in first three years
Energy efficiency
Data will be collected from grant recipients
No reporting required from companies investing in energy efficiency unless in EEO
Land (carbon farming)
Activity will earn Carbon Farming Initiative credits
Only 5% can be used in emissions trading scheme in first three years
Default carbon price ($23/t) is not likely to trigger new power supply investments
Maintenance and energy efficiency will improve carbon performance; no need to report this other than part of total NGERS or if receiving compensation payments
Cleaner power
7
ClimateWorks seeks to work with you to measure the hidden part of the story: the Activity and Drivers, not just Tonnes
8
EmissionsEnergy use
Projects undertaken
Feasibility studies
Barriers (eg. access to finance, skills)
Outcomes
Activity
Drivers
Projects approvals
Economic context
There is currently a gap in measuring action by businesses and individuals in a comprehensive and comparable way
Government policies
Why track activity & drivers?
Identify the early action of companies. When the Australian carbon price begins, this will help assess its cost and effectiveness in the early years.
Guide future policy action by identifying lagging areas which require attention.
Guide investment decisions by providing industry-specific information for efficient capital allocation before lagged aggregate data is available.
0
-100
-150
-200
-400
25020015010050
Emissions reduction cost to an investorA$/tCO2e
250
200
150
100
50
0
-50
This will help show us all what’s working and what’s not
IndustryPower Transport
BuildingsForestryAgriculture
2020 Australia GHG emissions reduction investor cost curve (from 2012 on)
Emissions reduction potentialMtCO2e per year
SOURCE: ClimateWorks Australia, Low Carbon Growth Plan for Australia; Australian Government, Securing a Clean Energy Future; ClimateWorks analysis
9
5% reduction
target
25% reduction
target
energy efficiency
cleaner powerland
THANK YOU
www.climateworksaustralia.org
