The scientific evidence accepted by most governments around the world, and as revealed in the IPCC reports, suggests that continued greenhouse gas emissions will lead to changes in the climate that are adverse to humans, and that will be costly.
Stabilising atmospheric greenhouse gas concentrations and ultimately reducing emissions could limit adverse climate changes (although this may take some time). Reducing emissions is costly and usually involves government coordination.
Most governments have responded to the need to stabilise emissions through policies designed to reduce emissions today or in the future. Various countries have a tailored mix of actions in place, varying from carbon pricing and market-based emissions trading schemes to renewable energy targets and feed-in tariffs for renewable energy:
-
Fifteen of Australia's top 20 trading partners have introduced renewable energy targets.
-
Many of Australia's top trading partners, including China, Japan, the United States, South Korea and Singapore have implemented or are piloting carbon trading and taxation schemes at the national, state or city level.
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Major emitters have a range of demand-side measures in place, including appliance and building standards and energy efficiency schemes to reduce demand for emissions-intensive energy.
Table 3.1 lists some of the main policies and measures in place in selected countries to achieve their emissions reduction goals. Table 3.2 summarises the emissions goals of key countries.
Table 3.1: Climate change policies and measures in selected countries (2014) |
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Country |
Carbon pricing (tax, emissions trading scheme) |
Energy supply |
Energy demand |
Mandatory vehicle standards |
Land-based activities, including agriculture and forests |
Australia |
Carbon pricing mechanism (under current legislation) |
Renewable energy targetState-based feed-in tariffs for renewable energy |
Appliance and building standardsState-based energy efficiency schemes |
None. Has effective carbon pricing through differences in fuel tax credits for some transport |
Carbon Farming Initiative |
China |
Pilot emissions trading schemes planned for seven provinces and cities. The first five began in 2013.Plans to design a national emissions trading scheme or carbon tax |
Renewable energy targetFeed-in tariff support for solar, wind and biomass powerClosure of inefficient small and medium-sized coal plants and industrial facilities |
Appliance and building standardsEnergy efficiency targetIndustrial energy efficiency retrofits |
Vehicle fuel efficiency standardsVehicle emissions standards planned |
National reforestation efforts to meet forest coverage target |
United States |
Sub-national emissions trading schemes in California and nine north-eastern states (the Regional Greenhouse Gas Initiative); planned in Washington and Oregon |
Sub-national renewable energy targetsFinancial incentives supporting renewable energyProposed national regulations limiting emissions from fossil fuel power plants |
Appliance and building standardsIndustrial energy efficiency assessments |
Vehicle fuel efficiency standardsVehicle emissions standardsRenewable fuel production incentives |
Support for voluntary action to reduce emissions and increase carbon sequestration |
European Union
|
Emissions trading scheme |
Renewable energy target and support for cogeneration—jointly generating heat and powerFeed-in tariffs for renewable energy |
Appliance and building standardsEnergy efficiency target |
Vehicle emissions standardsRenewable fuel production incentives |
EU strategy to improve soil management, including as a carbon sinkLand-sector managementLandfill emissions control |
India |
Small coal tax of about A$0.80 per tonneEnergy efficiency trading scheme for power sector |
Renewable energy targets |
Energy efficiency trading scheme for power sector |
Vehicle fuel efficiency standardsVehicle emissions standards pending |
Energy efficiency initiatives for agricultural sector include providing subsidised pumpsIncreasing forestry stock identified as one of 12 major objectives of India's low-carbon strategies under its Five Year Plan |
Japan |
Carbon tax on fossil fuelsSub-national emissions trading schemes in Tokyo and Saitama; voluntary federal scheme |
Renewable energy targetFeed-in tariffs for renewable energy |
Energy efficiency standards and measures in residential, commercial and building sectors |
Vehicle fuel efficiency standardsTax incentives for purchase of lower emission vehicles |
Covered under Japan's domestic offsets scheme |
Indonesia |
Considering market-based mechanisms for emissions reduction in selected sectors |
Renewable energy target |
Tax exemptions for energy-efficient technologiesEnergy intensity target |
Vehicle emissions standards |
Measures to reduce forest deforestation and degradation through regulations and market-based offsets |
Canada |
Sub-national cap-and-trade in QuebecSub-national taxes and duties on fossil fuels |
Standards for coal-fired electricity generation from 2015Renewable energy incentivesRemote renewable energy generation incentives |
Appliance and building standardsIndustry energy efficiency incentives |
Vehicle emissions and standards and efficiency programsRenewable fuel production incentives |
Sub-national offset mechanism in Alberta and Quebec |
Republic of Korea |
Emissions trading scheme to start in 2015 |
Renewable energy target |
Appliance and building standards |
Vehicle fuel efficiency and carbon emission standards |
|
South Africa |
Carbon tax to start in 2015 |
Renewable energy targetTax incentives and feed-in tariffs for renewables |
Energy efficiency demand-side management programs for residential, commercial and buildingsTax incentive for energy efficiency |
Vehicle emissions standardsGreenhouse gas emission tax for new vehicles |
Focus on adaptation in agriculture |
New Zealand |
Emissions trading scheme |
Stationary energy covered under the New Zealand emissions trading scheme |
Appliance and building standardsCommercial and residential energy efficiency schemes |
None. Liquid fuels covered under the New Zealand emissions trading scheme |
Sustainable Land Management and Climate Work Program covers land management sectors |
Norway |
Part of EU emissions trading systemBroad-based domestic carbon tax |
Renewable energy targetSupport for cogeneration |
Appliance and building standardsEnergy efficiency target |
Renewable fuel production incentivesVehicle emissions standards |
|
|
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Table 3.2: Current Nationally Determined Contributions and Emissions Data |
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Country/Region |
Paris Agreement commitments (all commitments are to 2030 unless otherwise indicated) |
Paris target implied change in total emissions 2005-2030 (%) |
China |
Peak carbon dioxide emissions by around 2030, making best efforts to peak early; lower carbon intensity by 60 to 65 per cent compared with 2005 |
+76 to +101 |
United States |
Reduce emissions by 26 to 28 per cent compared with 2005 levels by 2025 |
-35 to -39 |
European Union |
Reduce emissions by 40 per cent compared with 1990 |
-34 |
India |
Lower carbon intensity by 33 to 35 per cent compared with 2005 levels |
+244 to +254 |
Indonesia |
Reduce emissions by 29 per cent below BAU, or 41 per cent conditional on international support |
+14 |
Russia |
Reduce emissions by 25 to 30 per cent below 1990 levels |
+29 to +39 |
Brazil |
Reduce emissions by 37 per cent compared with 2005 levels by 2025; 43 per cent compared with 2005 levels by 2030 |
-43 |
Japan |
Reduce emissions by 26 per cent compared with 2013 levels |
-25 |
Canada |
Reduce emissions by 30 per cent compared with 2005 levels |
-30 |
Mexico |
Reduce emissions by 22 per cent below BAU |
0 |
Republic of Korea |
Reduce emissions by 37 per cent below BAU |
+6 |
Australia |
Reduce emissions by 26 to 28 per cent compared with 2005 levels |
-26 to -28 |
New Zealand |
Reduce emissions by 30 per cent compared with 2005 levels |
-30 |
Source: Climate Change Authority - PROSPERING IN A LOW-EMISSIONS WORLD: AN UPDATED CLIMATE POLICY TOOLKIT FOR AUSTRALIA - March 2020
Explore the full Workshop Manual: The business case for carbon farming: improving your farm’s sustainability (January 2021)
Read the report
RESEARCH REPORTS
1. Introduction: background to the business case
This chapter lays out the basic background and groundwork of the manual
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1.2 Being clear about the reasons for participating
Introduction: background to the business case
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1.4 Working through the business case for carbon farming
Introduction: background to the business case
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1.5 Factors determining project economics
Introduction: background to the business case
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1.8 Important features of the business case
Introduction: background to the business case
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2. How carbon is farmed under the ERF
This chapter considers in detail the activities that constitute carbon farming
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2.5 Carbon farming under the Emissions Reduction Fund
How carbon is farmed under the ERF
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3. The policy context and the price of ACCUs
This chapter takes a broad look at the policy context for carbon farming
