Suite 16288 Brunswick Street

Fitzroy VIC 3065

Climate Change Policies Review 2017 Review Branch Department of the Environment and Energy GPO Box 787 Canberra ACT 2601

climatechangereview@environment.gov.au

5 May 2017

Dear Sir / Madam,

Beyond Zero Emissions welcomes the Department of the Environment and Energy’s invitation to make comments on the Australian Government’s 2017 Review of climate change policies discussion paper.

Beyond Zero Emissions submits that the Australian Government should commit to clear, long term climate change policies that reduce greenhouse gas emissions to net zero, and then reduces atmospheric greenhouse gases to pre-industrial levels.

In 2017 there is demonstrable evidence that our climate system is warming: sea level rises, global temperature rises, warming oceans, shrinking icesheets, extreme events, ocean acidification and decreased snow cover.

We agree with the Australian Government’s statement “Climate change is a global issue that requires international action.” To play its part, Australia must achieve its COP21 targets, and commit to new policies and targets that drive a rapid decarbonisation across all sectors of the economy.

In this submission we draw on Beyond Zero Emissions’ research to submit a proposed policy blueprint that would deliver:

• electricity generation transformation• energy productivity transformation• land and agricultural transformation.

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BZE submits that an integrated national climate change blueprint should deploy an investment and policy program that realises a net zero outcome in ten years.

A rapid transition is achievable, affordable, and will have many benefits for Australia. Our existing resources and technology can realise a climate-saving agricultural sector and secure an energy supply that supports a thriving Australian economy.

Electricity generation transformation investments

At-a-glance

• Investment that drives an integrated and significantly expanded National Electricity Market for the generation and supply of 100% renewable electricity

• A 100% renewable NEM that delivers affordable, reliable and secure energy to existing as well as new electricity consumers, and achieve economy-wide energy savings in the order of billions per annum

• Transitioning away from gas, which is a significant warming gas

• Boosting economic productivity through attracting energy-intensive industries and producing tradable renewable energy commodities.

Discussion

In 2010 Beyond Zero Emissions, in collaboration with the University of Melbourne’s Energy Research Institute, released the Stationary Energy Plan1- a comprehensive research plan that sets out how a 100% renewable stationary energy sector could provide all the energy required by existing electricity consumers as well as new consumers.

Our research found that it is possible to achieve zero emissions electricity and energy generation in ten years using commercially available and affordable technology.

We have identified the following specific opportunities for Australia’s electricity generation transformation:

100% renewable energy target

The Stationary Energy Plan was the first major Australian study, and one of the first in the world, to show that a 100% renewable stationary energy system was achievable using proven, commercially available and costed technologies. At the time of its release there was virtually no discussion of a rapid

1 Stationary Energy Plan, 2010, Beyond Zero Emissions

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decarbonisation, zero emissions or 100% renewables in Australia or overseas. The Stationary Energy Plan influenced subsequent studies that also demonstrated 100% renewable energy supply was possible.

Studies published subsequent to Beyond Zero Emissions’ Stationary Energy Plan continue to show how the now well-known energy policy ‘trilemma’ – policies that simultaneously provide high levels of energy security and supply, universal and affordable energy and reduced emissions - can be resolved. The most recent study by CSIRO and ENA concludes that an energy transformation of this nature will not only satisfy these policy demands but also save the Australian economy an estimated $100 Billion to 2050.

In 2010 BZE calculated that the cost of a 10 year transition to 100% renewable energy - to power buildings, transport and industry - was $370 Billion. This indicates the scale of the investment task. We bring to the attention of the Australian Government that around $200 Billion of capital expenditure has been invested in the LNG energy export sector over the past decade. This demonstrates that rapid, extensive investment in new energy infrastructure projects is well within Australia’s capacity.

A rapid transition to 100% renewable electricity is a nation building project that will achieve many benefits for Australia. A policy framework is needed to drive this transformation, including:

• ambitious emissions reduction targets. Beyond Zero Emissions calls for a rapid, 10 year transition to zero emissions

• policy levers that reduce market barriers to investment, and put in place the right conditions for rapid industry innovation and investment in clean, zero emissions technology

• clear, long term energy policy outcomes that have bi-partisan support. We note that the Victorian Government’s new Climate Change Bill 2016 provides one such model for the policy certainty that is required

• a systems approach to energy reform, ensuring that policy outcomes, policy tools, the regulatory regime, governance and investment programs are integrated.

Transitioning away from gas

BZE’s research shows natural gas is not an essential or economic energy source for transitioning to a low or zero carbon economy. It is not essential for buildings, transport, manufacturing and other industrial sectors and subsectors. All of these can be economically replaced with non-gas substitutes.

There are numerous existing, commercially proven renewable energy and storage technologies that can, in concert, achieve Australia’s future-secure electricity and renewable heat supply.

Beyond Zero Emissions considers investing in new gas will ultimately result in a massive sunk cost, and will further delay the investments and rewards of engaging quickly in the global zero emissions economy.

We also bring to the Australian Government’s attention the warming properties of gas. Gas is not a low emissions fuel:

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• emissions from gas combustion are still too high for gas to make a useful contribution to climate change mitigation. Further, combustion emissions are not the only emissions associated with this fuel type

• per unit of energy delivered, emissions associated from gas are increasing as conventional reserves are depleted and unconventional forms of coal-seam and shale gas are brought into production

• gas from gas reserves leaks, is vented and migrates.

All together, non-combustion emissions associated with gas have been reported to be as high as 7.8%, while official estimates from the Australian Government puts ‘leakage factors’ at 1.5%.

This is significant because as a near-term climate change forcer, methane - such as from leaked, unburned, vented and migrated gas - is now reckoned to have a global warming potential 105 times that of CO2.

The latest thinking is that alternatives to methane, itself a highly potent near-term climate forcer, is in fact a crucial and as yet significantly overlooked mitigation opportunity.

Beyond Zero Emissions sees eliminating the use of natural gas for power and for heat as a key mitigation opportunity to be embraced as part of an integrated national climate change blueprint.

Maximise support for energy-intensive industries and renewable energy exports

In 2015 Beyond Zero Emissions released Renewable Energy Superpower – a report investigating opportunities for Australia in the global transition to zero emissions.

Beyond Zero Emissions’ research found that:

• consumers and the economy will benefit if Australia captures its renewable energy advantage

• the economic renewable energy resource potential of Australia is greater than its coal, gas, petroleum and uranium resources combined

• with trillions of dollars in clean energy investment ready to be made globally, nations with abundant, low cost energy like Australia will become the ‘energy superpowers’ of the renewable energy era

• the majority of energy investment to be made globally over the next two decades will be made in renewable energy and energy efficiency. Some US$390 Billion was spent in this sector in 2014, with this forecast by the IEA to double to US$750 Billion by 2020, then rise to US$2,300 Billion by 2030.

Australia’s competitiveness in the future will be determined by the decisions and investments made now. To be a renewable energy superpower we need to be giving our valuable energy-intensive industries the benefits of the world’s best and cheapest renewable energy. For them, as well as the economy, every uncoordinated energy investment and development simply adds costs to the energy system, and undermines Australia’s renewable energy advantage.

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Energy productivity transformation investments

At-a-glance

• A comprehensive and integrated energy productivity investment program featuring fuel switching and at least a doubling energy productivity in every sector

• Policies that drive investment across all energy users, ANZSIC groups and classes, including: transport, SME’s, commercial and residential buildings, and all industrial subdivisions

• Harnessing energy use transformation opportunities including economy wide savings in the billions per year, and access to the growing global market in energy productivity IP, services, materials and equipment.

Discussion

Energy productivity represents ‘bankable’ value for households, industry and businesses.

As with the investment in 100% renewable electricity, investment in energy productivity will enable Australia to participate in this very significant and growing sector of the global energy transition market.

The following specific opportunities for Australia’s energy productivity transformation have been identified:

Halve the energy used by all buildings

In 2013 Beyond Zero Emissions, in collaboration with the University of Melbourne’s Energy Research Institute, released the Buildings Plan2 - a comprehensive research plan that sets out how the entire buildings sector (across 11 main residential and commercial building types) could halve its energy use as well as drive the deployment of an installed capacity of over 30 GW of rooftop solar photovoltaic.

The key findings of the Buildings Plan research are:

• it is possible to achieve net zero emissions in ten years across the entire Australian buildings operations sector using commercially available and affordable technology

• this investment program would feature accelerating ‘economic fuel switching’ towards all-electric heating and cooking appliances as well as other off the shelf energy saving measures now increasingly in the mainstream.

Transport emissions can be eliminated with all-electric infrastructure

2 Buildings Plan, 2013, Beyond Zero Emissions

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In 2014 and 2016 Beyond Zero Emissions, in collaboration with the University of Melbourne’s Energy Research Institute, German Aerospace Centre and MRCagney released two reports3 in the Zero Carbon Transport Plan: a plan that sets out how zero emissions transport can be delivered via regional high speed rail, and a plan for an electric car and bus fleet powered by 100% renewable electricity.

The key findings of the Zero Carbon Transport research are:

• it is possible to achieve zero emissions in Australia’s urban transport sector within ten years using commercially available technology - cars, buses and modeshift - and, depending on assumptions around costs and fuel savings, that it might cost the national economy no more than fossil-energy powered reference scenarios

• it is already economic for the private sector to build and operate an east coast high speed rail run entirely on 100% renewable electricity, and to do so as a successful private enterprise without the need for government subsidies.

Resources, manufacturing and waste

In 2017 and 2018 Beyond Zero Emissions will release the Zero Carbon Industry Plan 4- a comprehensive research plan with targeted standalone reports setting out how to:

• supply renewable heat and power across every industrial sector

• supply zero carbon cement to Australia’s infrastructure and construction supply chains

• use and waste less ‘by design’.

BZE’s preliminary research to date indicates that it would be possible to achieve an entirely zero emissions industry sector in Australia - including in the manufacture of cement - using commercially available and affordable technology.

3 High Speed Rail 2014 Beyond Zero Emissions & Electric Vehicles, 2016, Beyond Zero Emissions4 Zero Carbon Cement Report & Zero Carbon Industry Plan to be published in 2017, Beyond Zero Emissions

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Land and agriculture transformation investments

At-a-glance

• An agriculture investment program that simultaneously and accurately identifies, targets, tracks and invests in strong reductions in both short-lived and long-lived classes of climate pollutants, across all the land uses and agriculture ANZSIC groups and classes

• Fully leveraging more than $5 Billion per year in new regional revegetation projects, as well as supporting the recovery of 7,500 Mt of CO2 from a lifetime of protected forest and woodland sinks

• Prioritising high-value opportunities for Australia in a genuinely net zero and carbon negative agricultural sector.

Discussion

In 2014 Beyond Zero Emissions, in collaboration with the University of Melbourne’s Melbourne Sustainable Society Institute, released the Land Use: Agriculture and Forestry discussion paper 5- a paper outlining how Australia can reduce its rural land use emissions to zero and beyond.

A significant feature of the Land Use: Agriculture and Forestry discussion paper is addressing short term emissions like methane, applying decadal greenhouse gas accounting to gain insights into what are the most significant emission sources and effective mitigation opportunities.

BZE has identified the following sector-specific opportunities for Australia’s land and agricultural transformation:

Transforming ruminant agriculture is key to a climate-safe land use sector in 10 years

The Land Use: Agriculture and Forestry discussion paper found the single largest agricultural emission source in Australia is land clearing for the expansion and maintenance of northern cattle grazing.

In particular:

while we recognise that this is not a sole federal government responsibility, we strongly urge that policies be developed to reduce deforestation for northern cattle grazing, such as a higher carbon price or pressure and /or incentives for state governments

savanna burning for northern pasture maintenance is a significant source of emissions - and it could be further reduced (discussed below)

significant reductions in methane emissions can be secured by replacing rangelands animal

5 Land Use: Agriculture and Forestry, 2014, Beyond Zero Emissions

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production with production on improved pastures

herd reduction is already one of the cheapest methods of climate mitigation - in fact, an approximately 20% reduction in ruminant meat production from extensive grazing (ignoring dairy herds and ignoring intensive grazing) can be achieved without making changes to domestic consumption. Globally, reducing enteric fermentation emissions and reducing ruminant herds has also been found to be the lowest cost GHG mitigation now available.6

Australia’s entire agricultural activities emissions can be genuinely offset by combining the above measures with a:

• 13% limited revegetation program

• national program of best practice soil and manure management.

The sector can achieve sector-wide net zero emissions position (using either UNFCCC or decadal accounting) because it can reduce the all-important drivers of near-term warming such as carbon monoxide and tropospheric ozone.

Our Land use: Agriculture and Forestry Discussion Paper shows how all this can be accomplished within 10 years.

Make the Emission Reduction Fund work harder and smarter

BZE strongly supports the Emission Reduction Fund’s emphasis on revegetation projects, which are currently contracted for 78% of emission reductions under the Fund.

The Land Use: Agriculture and Forestry discussion paper identified this as a key mitigation strategy, albeit at a greater scale, and in particular identified that:

strengthening a sequestration industry for long-term mitigation can be achieved by fostering a better price for carbon sequestration activities

55 million hectares (ie 13%) of Australia’s already cleared land is also substantially co-located with the most degraded, saline and steep locations. Revegetating these areas would cost around $5Billion a year over 10 years (2014 $Au) and would sequester around 50Mt CO2-e/yr. This cost to captured CO2 ratio is comparable to the cost of climate mitigation globally, and may in addition generate multiple benefits (for example, in improving catchment water quality - a particularly significant issue in Great Barrier Reef catchments).

it is essential to cease further broadscale land clearing and re-clearing - while we recognise that this is not a federal government responsibility, we strongly urge that policies be developed to reduce deforestation, such as a higher carbon price or pressure on state governments

savanna burning for pasture maintenance, a significant source of emissions, can be further reduced. We note in particular that savanna burning projects have been registered to receive credit for 13.8

6 Wollenberg, E. et al. Reducing emissions from agriculture to meet the 2°C target. Glob. Change Biol. n/a-n/a (2016). doi:10.1111/gcb.13340

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MT CO2-e or 10% of Fund contracts and the number of such projects has ballooned. While the science of burning early in the dry season rather than late is quite clear in reducing emissions, what is also clear is that the natural burning frequency is far less than the yearly burns as currently contracted to the Emission Reduction Fund.

We strongly recommend the review commission targeted research on real emission savings achieved over longer periods, noting that a wealth of research on fires has been conducted in the top end indicating that naturally occurring wildfires from lightning strike are rare in the dry season.

Domestic greenhouse emissions reporting: making it easy for farmers and investors to be rewarded for genuinely effective mitigation

Beyond Zero Emissions agrees with the Australian Government that:

“Farmers and others are increasingly recognising opportunities for agriculture in the transition to a lower-emissions economy.”

Producers and policy makers could clearly identify emission reductions that would have the most impact if DoEE published a domestic GHG report:

• distinct from and in addition to the UNFCCC reporting

• showing warming impact over coming decades.

Beyond Zero Emissions suggests that to best facilitate effective domestic mitigation activities, the Australian Government needs to correct the several reporting anomalies which still obscure this information. BZE’s Land Use: Agriculture and Forestry discussion paper addresses this issue, and recommends that:

deforestation is reported against the activities and industry responsible, not as net LULUCF reporting by UNFCCC convention

carbon monoxide, black carbon, NMVOCs and sulphur dioxide emissions are reported against relevant activities and the responsible industry

o although these emissions are catalogued by DoEE, they do not appear in any inventory

o for example, savanna burning for pasture maintenance, a significant source of emissions, is currently excluded by convention from the national inventory reporting for agriculture

up-to-date global warming potentials are applied for all emissions, because methane in particular has been identified as key to a liveable planet. Methane’s global warming potency has been revised upwards due to its role in creation of other greenhouse gases, particularly ozone, and due to its interaction with aerosols

re-interpret the impact of national emissions over the coming critical decades, by applying decadal greenhouse gas accounting as well as accounting as per UNFCCC convention.

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o at more than three times historic levels, as compared with the 40% rise in CO2 over the same period, methane's atmospheric levels are now so great that the earth will warm by 1.5-2 degrees by 2050 whether or not CO2 emissions are reduced.7

o with methane levels now rising at a record rate, climate models are being pushed into their highest temperature scenarios.8

o though methane emissions from fossil fuel are now known to be up to twice that of current estimates globally,9 the recent surge is known to be largely from livestock, with also significant contributions from fossil fuel ‘fugitives' and smaller contributions from wetlands.11

By way of example, Figure 1 below shows that when national emissions are analysed by ANZSIC divisions and subdivisions, and when the UNFCCC methodology includes accounting of near term climate forcing (NTCF) GHGs and the GHGs they give rise to, then very effective, sustainable and cost-effective opportunities in abating agricultural activities’ emissions do become quite apparent.

Figure 1:10 Warming gases from agriculture by UNFCCC convention: CO2, N2O, CH4. Additional warming gases included in “Plus

7 Howarth, R. W. A bridge to nowhere: methane emissions and the greenhouse gas footprint of natural gas. Energy Sci. Eng. 2, 47–60 (2014).8 Saunois, M., Jackson, R. B., Bousquet, P., Poulter, B. & Canadell, J. G. The growing role of methane in anthropogenic climate change. Environ. Res. Lett. 11, 120207 (2016).9 Schwietzke, S. et al. Upward revision of global fossil fuel methane emissions based on isotope database. Nature 538, 88–91 (2016).10 Warming gases from agriculture and agricultural land use included in UNFCCC methodology: CO2, N2O, CH4. Additional warming gases included in ‘UNFCCC plus NTCF (near term climate forcers)’ methodology add in CO, and the gases that NTCFs give rise to, including O3T Shown in red: While the average national annual totals for each methodology are 567 and 689 MtCO2-e, using NASA decadal accounting methodology instead, ie GWP20 compared with GWP100 , gives a total of 1497 MtCO2-e/yr from all sources, with agriculture 54% of this total. Sources: LUR 2014 figs 3.1, 3.2, 3.20, NASA, IPCC 5th 2013 & AR5 (NTCF explanation) http://ageis.climatechange.gov.au/ANZSIC.aspx# and

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Carbon Monoxide” BZEs UNFCCC plus NTCF (near term climate forcers) methodology : add in CO and subsequent O3T. “Plus Decadal Methane” approximate additional MtCO2-e due to methane at GWP20.

About Beyond Zero Emissions

Beyond Zero Emissions is an Australian research and education organisation. Since 2006 we’ve helped governments, businesses and individuals address one fundamental question: How can Australia rapidly transition to a zero carbon-emissions economy?

Our work is carried out by a small staff of experts, with the help of academic institutions and a large network of volunteer scientists, engineers and economists. We are funded by private foundations and concerned individuals.

In 2017 Beyond Zero Emissions’ work was recognised by The Lauder Institute’s Think Tanks and Civil Societies Program with a global think tank ranking of 52nd for the category “Best Independent Think Tanks."

Beyond Zero Emissions would welcome the opportunity to discuss how these recommendations can be delivered over the next decade. BZE’s research publications, which are briefly summarised and referred to throughout this submission, show how it is achievable, affordable, and will improve every aspect of the lives of every Australian.

Yours sincerely,

Vanessa PetrieChief Executive OfficerBeyond Zero Emissions

Beyond Zero Emissions research reports can be found at:

Stationary Energy Plan: http://bze.org.au/stationary-energy-plan/Renewable Energy Superpower: http://bze.org.au/renewable-energy-superpower/Buildings Plan: http://bze.org.au/buildings-plan/Land use and Agriculture Discussion Paper: http://bze.org.au/land-use-agriculture-and-forestry/

https://www.ipcc.ch/pdf/assessment-report/ar5/wg1/WG1AR5_Chapter08_FINAL.pdf Note: fugitive emissions from gas extraction may be much higher than reported in NIR. See: http://www.tai.org.au/sites/defualt/files/MEI%20Review%20of%20Methane%20Emissions%20-%2026%20October%202016.pdf

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