Department of the Environment and Energy

Annual Report 2016–17

Climate change

www.environment.gov.au/annual-report-2016-17

© Commonwealth of Australia, 2017.

Climate changePurpose: Develop and implement a national response to climate change.

Activity: Reducing Australia’s greenhouse gas emissionsThe Department helps develop and implement a national response to climate change through policies and programs that reduce emissions. This includes boosting energy productivity, storing carbon in the landscape, increasing renewable energy, driving innovation and supporting an effective international response.

We are responsible for implementing components of the Emissions Reduction Fund (crediting, purchasing and safeguarding) and the Carbon Neutral Program. We encourage the uptake of renewable energy and energy innovation through the Renewable Energy Target and we support and work with the Australian Renewable Energy Agency and the Clean Energy Finance Corporation.

Results against performance criteria and targetsIntended result: Shape the global response to climate change and achieve Australia’s greenhouse gas emissions reduction targets through effective emissions reduction mechanisms, including the Emissions Reduction Fund, the Carbon Neutral Program and the Renewable Energy Target.

Performance criterion

Australia meets its obligations under international climate change agreements.

Source PBS 2016–17 p. 54, Corporate Plan 2016–17 p. 31Result Achieved

The Department is responsible for implementing Australia’s mandatory international reporting requirements under the United Nations Framework Convention on Climate Change (UNFCCC), including through the National Greenhouse Accounts. We design and implement domestic abatement measures to enable Australia to achieve its international emissions reduction targets and measures, and report on and verify progress towards these targets. We support negotiations on the implementation of the Paris Agreement and build other countries’ capacity to contribute to the global response to climate change by sharing our unique expertise and experience in emissions measurement, reporting, verification and accounting.

Paris Agreement and Doha Amendment

In 2016–17, we supported Australia’s ratification of both the Paris Agreement and the Doha Amendment to the Kyoto Protocol on 10 November 2016. These treaties, which together formalise Australia’s 2020 and 2030 emissions reduction targets, were tabled in the first sitting week of the new Parliament. Our work on the national interest analyses and our participation in the hearings of the Joint Standing Committee on Treaties contributed to the committee’s recommendation to ratify the agreements. Ratification of these agreements reaffirmed Australia’s strong commitment to effective global action on climate change.In 2016–17, we worked closely with the Department of Foreign Affairs and Trade on ongoing UNFCCC negotiations to develop the implementing rules for the Paris Agreement, due for completion at the end of 2018. We provided technical expertise on priority issues such as emissions accounting, reporting and review, and advocated for outcomes consistent with Australia’s circumstances and

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Performance criterion

Australia meets its obligations under international climate change agreements.

policies.

Biennial report to the UNFCCC

During 2016–17, we successfully engaged with the UNFCCC technical team reviewing Australia’s second biennial report under the convention. The review team assessed Australia highly, highlighting the completeness and transparency of our reporting. The report was presented to the 22nd UNFCCC Conference of the Parties meeting in Marrakech in November 2016. It has received positive feedback from domestic and international stakeholders.

Greenhouse gas inventory system: international and domestic reviews

A UNFCCC technical expert review team confirmed that Australia’s annual National Inventory Report on our greenhouse gas inventory system complied with the monitoring, reporting and verification requirements. In August and September 2016, the team scrutinised our inventory system, data estimates for 1990–2014, methods and sources against the international reporting requirements of the UNFCCC and its Kyoto Protocol. The Australian National Audit Office undertook a performance audit of the national inventory over 10 months to July 2017. Its objective was to assess the effectiveness of arrangements for preparing and reporting Australia’s greenhouse gas emissions estimates in the National Inventory Report 2014 (revised). The audit office reported that the Department had established appropriate processes to prepare, calculate and publish the 2014 inventory. The report concluded that emissions estimates were calculated using relevant contemporary data and appropriate quality assurance and that control procedures were in place for inventory data processing, emissions calculations and reporting. The Department calculated that the impact of data issues identified in the national inventory for the years from 1990–2014 was less than 0.1 per cent of total emissions in each year.

Capacity building activities

We continued to shape the global response to climate change by applying and sharing our expertise in emissions measurement and accounting to support the building of the capacities in developing countries to meet Paris Agreement obligations. This was done through direct bilateral support to the governments of Indonesia and Thailand to develop emissions measurement and reporting systems. Australia’s continued leadership of the Global Forest Observations Initiative provided necessary satellite data to developing countries for monitoring emissions from the land sector and guidance on how to use these data. The value of the initiative was also recognised by the direct involvement of the World Bank, Intergovernmental Panel on Climate Change and UNFCCC secretariats, Germany and the United Kingdom.Further elaboration of capacity building activities is set out in the case study ‘Shaping the global response to climate change—Thailand’ below.Our work with developing countries included support of Brunei Darussalam to host the second Asia-Pacific Rainforest Summit in August 2016. The summit attracted 600 attendees from business, civil society, academia and governments from more than 40 countries. The summit successfully promoted the importance of forests and the land sector in reducing emissions for countries in our region.

Domestic climate change action

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Performance criterion

Australia meets its obligations under international climate change agreements.

For reporting on domestic programs and policies to meet Australia’s international climate change obligations, including the 2020 and 2030 targets, see the targets under this activity on pages 93–104.

Case Study – Shaping the global response to climate change—Thailand

The Department is supporting Thailand’s efforts to implement the UNFCCC Paris Agreement. In partnership with Thailand’s Office of Natural Resources and Environmental Policy and Planning, we are supporting the design and development of the Thailand Greenhouse Gas Emissions Information System, known as TGEIS.

TGEIS is modelled on the Australian Greenhouse Emissions Information System. It will centralise Thailand’s greenhouse gas emissions estimations, national account compilation and international reporting into a single IT system. By producing timely, high-quality and transparent greenhouse gas emissions data, TGEIS will be a critical input into Thailand’s climate action. It will support the design and implementation of effective domestic emissions reduction measures and help fulfil Thailand’s international reporting obligations. Beyond the technical and environmental benefits it will deliver, TGEIS is being promoted as advancing Thailand’s economic transformation agenda, ‘Thailand 4.0’.

Thailand has publicly acknowledged our contribution to its climate change response. At the May 2017 UNFCCC negotiating session, Thai officials generously thanked the Department for our help in creating a system they believe will be the best in the developing world. The officials highlighted that our assistance will enable Thailand to apply the same emissions estimation guidelines as developed countries. This is a significant step towards one of the Paris Agreement goals: encouraging all countries to enter a more level playing field of rules and commitments.

Target Australia meets its 2020 emissions reduction target.Source PBS 2016–17 p. 54, Corporate Plan 2016–17 p. 31Result In progress

The Department provides climate change policy advice to the Government and contributes to the development and delivery of policies and programs geared towards meeting Australia’s 2020 emissions reduction target. This includes the Emissions Reduction Fund and its safeguard mechanism, the Renewable Energy Target and the Carbon Neutral Program. The National Greenhouse Accounts track progress towards Australia’s 2020 target. The latest accounts, the Quarterly update of Australia’s national greenhouse gas inventory: December 2016, report that Australia’s emissions for the year to December 2016 were 2 per cent below 2000 levels. They also report that emissions per capita and emissions per dollar of real gross domestic product (the emissions intensity of the economy) were at the lowest levels in 27 years (see Figure 2.7).www.environment.gov.au/climate-change/greenhouse-gas-measurement/publications The Department’s latest emissions projections, published in December 2016, estimate that Australia will over-achieve on its 2020 cumulative abatement task1

1 Australia’s 2020 emissions reduction target under the Cancun agreement is to reduce emissions to 5 per cent below 2000 levels in 2020, expressed as an emissions budget. A trajectory to achieve the emissions budget is calculated by taking a linear decrease from 2009–10 to 2019–20, beginning from the Kyoto Protocol first commitment period target level and finishing at 5 per cent below the emissions in 2020. The cumulative abatement task for the 2020 target is the difference in

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Target Australia meets its 2020 emissions reduction target.by 224 million tonnes of carbon dioxide equivalent (tCO2-e) including carryover2, or 97 million tCO2-e without carryover (Figures 2.8 and 2.9). www.environment.gov.au/climate-change/publications/emissions-projections-2016The previous projections, in April 2016, estimated that Australia would over-achieve on its 2020 target by 78 million tCO2-e with carryover (Figures 2.8 and 2.9). The changes since the April 2016 estimate reflect significantly lower than expected emissions growth across the economy, due in particular to:

factoring in the closure of Hazelwood power station in Victoria in April 2017

increased energy efficiency leading to reduced demand for electricity

reduced levels of land clearing leading to lower emissions in the land sector.

Emissions projections are informed by a range of factors, including contributions from the Government’s climate change policies. During 2016–17, we contributed to climate change programs and policies to achieve the 2020 target. The high-level outcomes of these are summarised below.

Emissions Reduction Fund

The Emissions Reduction Fund rewards businesses and the community for undertaking projects to reduce their emissions by issuing Australian carbon credit units. They can then sell these credits back to the Government under contracts awarded through a reverse auction process or sell them to other private sector purchasers. The Clean Energy Regulator is responsible for administering the fund including issuing Australian carbon credit units. More information is on their website. www.cleanenergyregulator.gov.au/ERF/project-and-contracts-registers/project-register Under the fund, the Department is responsible for developing the methods of emissions reduction activities that are eligible for the scheme. During 2016–17, we released six draft determinations, including variations of existing methods, for public consultation. The Minister for the Environment and Energy made variations to two methods: the method for reducing fugitive methane emissions at coal mines and the method for reducing emissions by improving beef cattle herd management. The Clean Energy Regulator held two fund auctions, one in November 2016 and another in April 2017. The two auctions contracted 45.6 million tCO2-e of emissions reductions at a cost of $500 million. Total contracted abatement for the Emissions Reduction Fund over the five auctions since April 2015 now stands at 189 million tCO2-e. More than $300 million remains for future purchases.

Safeguard mechanism

The Emissions Reduction Fund’s Safeguard Mechanism began on 1 July 2016. The objective of the mechanism is to ensure that emissions reductions purchased by the Government are not offset by significant increases in

cumulative emissions over the period 2013 to 2020 between projected emissions and the target trajectory.2 Carryover refers to Australia’s over-performance during the Kyoto Protocol’s first commitment period.

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Target Australia meets its 2020 emissions reduction target.emissions above business-as-usual levels elsewhere in the economy.It does this by setting emission limits (baselines) for around 140 businesses with facilities that emit more than 100,000 tCO2-e a year. These baselines apply to facilities representing around half of Australia’s emissions. The Clean Energy Regulator, which implements the Safeguard Mechanism, is working with facilities to establish baselines in accordance with the legislation.

Carbon Neutral Program

In 2016–17, the Department delivered workshops to encourage businesses around the country to participate in the Carbon Neutral Program. In December 2016, we released draft standards for carbon neutral buildings and carbon neutral precincts for public consultation. Based on advice received during consultations with the property sector and other businesses, the standards are likely to increase the number of program participants. We are on track to finalise the standards in 2017.Four new participants joined the program in 2016–17, and there was a strong increase in participant use of Australian carbon credit units for offsetting. During the 2016 calendar year, Carbon Neutral Program participants offset 70,000 tCO2-e of emissions through Emissions Reduction Fund projects and almost 60,000 tCO2-e through other Australian projects.

Renewable Energy Target

For a summary of outcomes, see the target ‘Electricity generation from eligible large-scale sources reaches the legislated target of 33,000 GWh in 2020’ on pages 99–101.

Figure 2.7: Emissions per capita and per dollar of real GDP (including land use, land use change and forestry), 1991 to 2017

Figure 2.8: Change in cumulative emissions reduction task over time, 2020 target

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Source: Australia’s emissions projections 2016.

Figure 2.9: Change in projected 2020 emissions level in recent projections

Source: Australia’s emissions projections 2016.

Case Study – Monitoring of land re-clearing and regrowth using satellite data

As part of fulfilling Australia’s international reporting commitments, the Department uses Landsat satellite data to estimate carbon emissions and sequestration from forests. We process Landsat images collected since 1972 to track land use changes in Australia.

In 2016–17, we implemented improvements to satellite data analysis, in collaboration with Commonwealth Scientific and Industrial Research Organisation (CSIRO) and Geoscience Australia. These improvements have extended the capability of the system to monitor the entire

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range of woody vegetation, including sparse woody vegetation (5 per cent to less than 20 per cent canopy cover) and forest lands (20 per cent or more canopy cover). This enabled us to compile a complete record of land clearing and regrowth history from 1972 to 2016 for the entire continent at a resolution suitable to detect project level activities, allowing us to report net emissions from land use changes under the UNFCCC and the Paris Agreement.

Our latest report, submitted in May 2017, showed that about 56,000 ha of primary forest were converted to other land uses in 2015—a reduction of 90 per cent from 600,000 ha in 1990. There was about 301,000 ha of additional clearing of secondary forests in 2015 for pasture maintenance purposes. This reflects land management practices of managing bush encroachment or forest regrowth on pastures and the use of woody vegetation for fodder. An important driver of reductions in net emissions from the land sector across Australia has been a declining rate of primary forest conversion to other land uses.

The image above shows clearing and managed regrowth of forest reported in the national inventory over an area under an Emissions Reduction Fund project, demonstrating the additional benefit of being able to use the inventory data to assess regrowth activities funded through Australian Government initiatives such as the Emissions Reduction Fund and 20 Million Trees Program.

Case Study – North East Arnhem Land Fire Abatement Project

The North East Arnhem Land Fire Abatement project in the Northern Territory is a recently registered Emissions Reduction Fund project contributing to Australia’s emissions reduction targets and providing invaluable environmental, social, cultural and economic benefits.

Operated by the Yirralka Rangers in north east Arnhem Land, the project is undertaking early dry season fire management to avoid high intensity wildfires later in the season, reducing greenhouse gas emissions and protecting the natural and cultural assets of the Laynhapuy Indigenous Protected Area.

In 2016, the Yirralka Rangers traversed 10,000 km of remote country by vehicle and 4,200 km by helicopter to undertake ground and aerial burning. Their hard work resulted in a very productive year, earning more than 110,000 Australian carbon credit units through the fund, where one Australian carbon credit unit represents one tonne of emissions reductions.

The project successfully bid into the Clean Energy Regulator’s fourth reverse auction in November 2016, where they contracted 100,000 tonnes of abatement, allowing the project to sell their Australian carbon credit units to the Australian Government over coming years. Across the five auctions to date, the average price for contracted fund projects is $11.83 per tonne of emissions reductions achieved. Private investors and corporations can also purchase Australian carbon credit units from projects like the North East Arnhem Land Fire Abatement project to voluntarily offset their carbon emissions and support environmental, cultural and social co-benefits.

The North East Arnhem Land Fire Abatement project is the fifth fire project to be registered in Arnhem Land by ALFA (NT) Ltd—a company owned exclusively by Aboriginal people with custodial responsibility for those parts of Arnhem Land under active bushfire management. The five fund fire projects they support cover almost 80,000 km2—an area larger than Tasmania—and have been issued with over 1.8 million Australian carbon credit units to date.

ALFA (NT) Ltd emphasises the high value of co-benefits generated by Indigenous fire projects, including Indigenous employment, supporting Aboriginal people to return and remain on their country, biodiversity protection, transfer of knowledge to younger generations, maintaining Aboriginal languages, and higher standards of mental and physical health.

The Yirralka Rangers and the Laynhapuy Indigenous Protected Area are supported by the Australian Government’s Indigenous Protected Area and Working on Country—Indigenous Ranger programs. These programs maintain and enhance the biodiversity of the land and sea,

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protect cultural sites, develop alternative sources of income and build the Yolngu people’s skills and capacity to undertake activities like those covered by the fund. The role of the Yirralka Rangers goes beyond the physical to the nurturing of spiritual components—essential to the Yolngu people’s relationship with their land.

‘Caring for country is not just about plants and animals, it is also about songlines and sacred sites within the country. Under Yolngu law we must protect these places. Ranger djama (work) is good because it gives us more ways to fulfil our obligation to look after country while continuing to live on our ancestral lands. Living on the homelands is the vision of our old people.’—Mungurrapin Maymuru, Yirralka Rangers Cultural Manager

Target Electricity generation from eligible large scale sources reaches the legislated target of 33,000 GWh in 2020. With support from small scale and other renewable energy generation, such as the Small-scale Renewable Energy Scheme and the Solar Programs, this delivers 23.5 per cent from renewable sources in 2020.

Source PBS 2016–17 p. 54, Corporate Plan 2016–17 p. 31, PAES 2016–17 p.36Result In progress

The Renewable Energy Target scheme comprises the Large-scale Renewable Energy Target and the Small-scale Renewable Energy Scheme.

Large-scale Renewable Energy Target

Accredited large-scale renewable energy power stations have reported generation of about 18,300 GWh of renewable energy above their baselines for 2016. This is an increase on the 16,000 GWh reported as generated above baseline in 2015.The number of accreditations of new renewable power stations was considerably higher in 2016 than in any of the previous three years (Figure 2.10). As at June 2017, there were 615 large-scale renewable energy power stations accredited under the Renewable Energy Target.The Clean Energy Regulator estimated that 6000 MW of new renewable energy capacity would need to be committed over 2016 to 2018 and built by 2019 to meet the 2020 target. In 2016, 1350 MW of new capacity was committed. This is lower than was considered necessary for satisfactory progress towards the 2020 target. However, investment activity accelerated in the second half of 2016, with 1024 MW of new projects committed between July and December 2016. A further 1418 MW was committed between January and June 2017, with 1229 MW considered likely to be committed in the near future. As at 30 June 2017, the combined 3977 MW total of committed and probable projects is more than half of the 6000 MW required, providing greater confidence than 12 months ago that the 2020 target will be achieved. The Clean Energy Regulator has advised in its annual statement released in March 2017 that the 2020 target is achievable provided the investment momentum continues in 2017.

Figure 2.10: Renewable power stations accredited, January 2013–June 2017

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Source: Clean Energy Regulator.

Target Electricity generation from eligible large scale sources reaches the legislated target of 33,000 GWh in 2020. With support from small scale and other renewable energy generation, such as the Small-scale Renewable Energy Scheme and the Solar Programs, this delivers 23.5 per cent from renewable sources in 2020.

Small-scale Renewable Energy Scheme

Unlike the Large-scale Renewable Energy Target, the Small-scale Renewable Energy Scheme does not have specific targets. As at 30 June 2017, more than 2.7 million small-scale systems were installed under the Small-scale Renewable Energy Scheme. The Clean Energy Regulator estimates that these small-scale renewable energy systems, such as household solar photovoltaic systems, will generate around 7700 GWh of electricity a year, while solar hot water systems and air source heat pumps will displace around 3400 GWh of electricity use a year. Since 2011 there has been a decline in small-scale system installations, in part due to reductions in the level of state and Australian Government support. This trend is expected to continue, given the relatively high penetration rates that have now been achieved. Starting in January 2017, support under the Small-scale Renewable Energy Scheme for each new system is gradually reducing each year. While the number of installations has declined since 2011, the average capacity of installed solar photovoltaic systems has increased from 2.3 kW to 5.6 kW.

Renewable energy generation

The Department estimates that renewable energy contributed about 16 per cent of total electricity generation in the 12 months to December 2016, up from 14 per cent in the previous 12 months. This is the highest share of renewables since the late 1970s. Non-renewable generation decreased by 1.4 per cent over the same period (Figure 2.12).Generation from wind and both large-scale and small-scale solar continued to grow over the last 12 months. Hydro generation recovered to levels similar to those achieved in 2013–14 (Figure 2.11).www.environment.gov.au/energy/publications/australian-energy-update-table-o

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Figure 2.11: Per cent renewable generation year to date, June 2014–December 2016

Source: Department of the Environment and Energy, 2017.

Figure 2.12: Electricity generation year to date, June 2014–December 2016

Source: Department of the Environment and Energy, 2017.

Target A doubling of Australian Government expenditure on clean energy research and development on 2015 levels by 2020 consistent with Australia’s Mission Innovation pledge.

Source PBS 2016–17 p. 54, Corporate Plan 2016–17 p. 31Result In progress

Australia joined the global Mission Innovation initiative when it was launched at the Paris Climate Change Conference in November 2015. Australia pledged to double Government clean energy research and development expenditure of $104 million over the five years to 2020–21. During 2016–17, the baseline expenditure was revised to $108 million, reflecting differences between projected spend and actual spend in 2015–16, as well as improved data on clean energy research and development activities.Based on projected data, Australia’s clean energy research and development expenditure is expected to have declined slightly to $104 million during 2016–17.

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Target A doubling of Australian Government expenditure on clean energy research and development on 2015 levels by 2020 consistent with Australia’s Mission Innovation pledge.However, there was qualitative progress in areas, which should support expenditure growth in future periods.In September 2016, the Government reinstated $800 million in funding to the Australian Renewable Energy Agency (ARENA) over five years, commencing from the 2017–18 financial year. ARENA spends across the clean energy innovation chain—research and development, demonstration, and deployment. Only spending on research and development contributes to the Mission Innovation pledge. The ARENA board decides where it directs funds.In May 2017, the ARENA board released a detailed investment plan setting out four investment priorities that will guide how ARENA’s new funds are directed over the coming years. It also opened a new grant funding round of approximately $20 million targeting research and development projects aligned with the investment plan. www. arena.gov.au/about/funding-strategy-investment-plan/ In June 2017, CSIRO published a Low Emissions Technology Roadmap for Australia, which made recommendations on Australia’s future clean energy research and development priorities, including where to focus domestic research and opportunities to collaborate internationally to deliver clean energy solutions for Australia. Further information on the roadmap is provided under the ‘Energy market reform and energy efficiency programs’ activity, page 125. We engaged closely with our international partner countries throughout the year on priority research areas for multilateral collaboration, and we represented Australia at the second Mission Innovation ministerial meeting in Beijing in June 2017.

Performance criterion

Support ARENA and the CEFC to increase the investment of funds into the Australian economy supporting clean energy technologies, including the number of projects progressing beyond the research and development phase of the innovation chain.

Source PBS 2016–17 p. 56, Corporate Plan 2016–17 p. 31Result Achieved

The Department supported processes to have Australian Government priorities reflected in the investment mandate of the Clean Energy Finance Corporation (CEFC) and in the general funding strategy of ARENA. We helped to set ARENA’s forward year funding allocation and the allocation of CEFC funding to particular investment funds, including the Clean Energy Innovation Fund. We continued to provide governance support, including board appointments and ministerial liaison. We supported ARENA by providing staff and corporate services under a service level agreement. ARENA supported projects to increase the supply of renewables in Australia, in particular to speed up the commercialisation of promising renewable energy technologies or solutions so that Australians can have affordable access to them as soon as possible. As at 30 June 2017, ARENA had committed $1.032 billion to over 317 projects. This has been matched by $2.530 billion in co-funding from private investors, making the total $3.562 billion.The CEFC committed a record $2.1 billion to new investments in the Australian clean energy sector in 2016–17, contributing to projects with a total value of $6.5 billion.

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Performance criterion

Support ARENA and the CEFC to increase the investment of funds into the Australian economy supporting clean energy technologies, including the number of projects progressing beyond the research and development phase of the innovation chain.The CEFC’s total commitments since it began investing in 2013 now stand at almost $4.3 billion, contributing to a diverse range of projects with a total value of $11 billion.The Government has now established three funds through the CEFC, drawing on its existing legislated funding. These are:

the $200 million Clean Innovation Fund, which provides support for emerging technologies from demonstration through to commercial deployment. ARENA is jointly managing this fund

the $1 billion Sustainable Cities Investment Program for clean energy projects that support the Government’s Smart Cities Plan by improving the productivity, liveability and accessibility of cities

the $1 billion Reef Program, which will contribute to the implementation of the Government’s Reef 2050 plan by investing in clean energy projects that improve water quality by reducing the levels of nutrients, sediments and pesticides in land-based run-off, and reducing amounts of marine debris.

Case Study – AGL virtual power plant

Through ARENA, the Department is providing up to $5 million towards AGL Energy Limited’s $20 million virtual power plant project.

The virtual power plant will use batteries that ‘talk’ to each other through a cloud-based platform to form a connected system that operates as a 5 MW solar power plant. The batteries will be installed in up to 1000 homes and businesses in Adelaide.

The cloud-based system will allow AGL to operate the system virtually rather than sourcing electricity from large power stations. It will harness power from the sun, captured and stored from rooftop solar panels. This virtual power plant will support the grid in times of instability and provide electricity to the grid in periods of peak demand.

This innovative project, the first of its kind, will enable home owners and small businesses to use more of the energy generated from their own rooftop solar systems to lower their power bills, reduce emissions and help to stabilise the electricity grid.

Case Study – Innovative CEFC financing programs reduce emissions and increase productivity

The CEFC has financed more than 1000 clean energy assets for businesses across Australia to help them lower their energy consumption and reduce their carbon emissions.

Working with some of Australia’s largest banks—National Australia Bank, Westpac and the Commonwealth Bank—the CEFC is making it easier for businesses to invest in clean energy technologies with the benefit of discounted asset finance. Overall CEFC has committed more than $600 million to national programs that offer finance to businesses wanting to upgrade to renewable, energy-efficient and low-emissions technologies.

Switching to more productive and energy-efficient equipment and processes typically reduces the energy costs of a business by 10 to 20 per cent.

The many success stories from CEFC co-financing programs include:

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Cane farmers who switched from winch irrigation to lateral irrigation have achieved electricity savings of more than 50 per cent, enabling them to increase productivity by irrigating areas they could not previously manage.

Farmers who financed self-propelled sprayers with wider booms have increased productivity by reducing the time it takes to spray their fields. One farmer reported that the new sprayer had halved fuel costs.

A road-base supplier who used the funding to buy stone crushers and excavators has saved around 35 per cent on fuel costs.

A manufacturer who installed new beam lines to cut, drill and weld steel has increased job turnaround while using far less energy.

A flower producer who replaced diesel with biomass has reduced overall energy costs.

Analysis against the activity’s intended resultIn 2016–17, Australia remained on track to meet its 2020 emissions reduction targets, made progress towards its 2030 target and supported an effective international response to climate change. Australia’s ratification of the Paris Agreement and the Doha Amendment to the Kyoto Protocol in November 2016 reaffirmed our commitment to shaping an effective global response to climate change.

We contributed to securing Australian influence in the UNFCCC negotiations and other international forums and promoted international climate change action in line with Australia’s interests. As Australia’s national focal point for the Intergovernmental Panel on Climate Change, we contributed to refining the panel’s guidance on emissions estimation to reflect Australia’s world-leading research and modelling expertise, promoted the comparable treatment of all countries in international review processes and built confidence in the quality of emissions estimates.

The Department successfully implemented the Government’s climate change policies, as detailed in the performance tables above.

Our December 2016, emissions projections showed that Australia is expected to surpass its 2020 abatement target. These projections indicated that reaching our 2030 target will require 990 million to 1055 million tCO2-e in emissions reductions between 2021 and 2030.

We are leading the Government’s 2017 review of climate change policies, with broad consultation, to ensure that Australia is in the best position to achieve our 2030 target. We began the review in February 2017 and will complete it by the end of 2017. In 2016–17, the Minister released terms of reference for the review, and we engaged with business, industry and other organisations on its scope, and released a discussion paper for public consultation on issues, including opportunities and challenges of reducing emissions on a sector-by-sector basis.

By applying and sharing our expertise in capacity building and international partnerships and delivering programs that enable developing countries to meet Paris Agreement obligations we continued to shape the global response to climate change. We represent Australia on, and chair, the lead team of the multilateral partnership Global Forest Observations Initiative. We are leading the development of methodology for the initiative. This gives us an unprecedented opportunity to influence global climate change institutions, including the UNFCCC, the Reducing Emissions from Deforestation and Forest Degradation in Developing Countries (UN-REDD) program and the World Bank’s capacity-building programs.

Activity: Adapting to climate change The Department supports research and produces practical information and tools to help businesses, governments and communities to identify climate change impacts, take appropriate actions and build their capacity to adapt to a changing climate. We work with Australian

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Government agencies to improve their understanding and consideration of climate risk and opportunities to their operations, programs and policies.

Our climate adaptation work links closely with our environmental science and research enabling activity (see page 135), which improves our understanding of climate change and promotes informed decision-making.

Results against performance criteria and targetsIntended result: Provide the guidance, information and national coordination needed to ensure that Australian Government operations and activities are resilient to climate change impacts, and that businesses and communities are better placed to manage their own risks.

Performance criterion

Data and information generated or commissioned by the Department are used by stakeholders and/or support evidence-based decision-making.

Source PBS 2016–17 p. 55, Corporate Plan 2016–17 p. 33Result Achieved

In 2016–17, the Department commissioned a range of tools, information and data to assist evidence-based decision-making. In particular, we provided funding for Phase 2 of the National Climate Change Adaptation Research Facility’s Project Plan 2014–2017. Phase 2 of the plan focuses on decisions concerning coastal assets, communities and ecosystems.

CoastAdapt

In May 2017, as part of Phase 2 of the Project Plan 2014–2017, the National Climate Change Adaptation Research Facility released the final version of CoastAdapt, its online tool for managing coastal climate risk. Results from the user testing of the beta version of the tool included the following:

Respondents to the online user feedback survey were overall very satisfied with CoastAdapt and were very likely to recommend CoastAdapt to others.

Qualitative feedback from 19 workshops held around Australia in September–October 2016 indicated that CoastAdapt is a useful ‘one stop shop’ for climate change related information.

Within the first quarter of its release, CoastAdapt had received 6152 visitors. As of May 2017, the overall number of new visitors rose to 14,317, with the monthly average rising to around 2000 visits.

www.coastadapt.com.au

Practical knowledge for adaptation

Through funding from the Australian Government, in 2016–17, the National Climate Change Adaptation Research Facility completed and began disseminating a series of information products including synthesis summaries, climate change adaptation briefing notes, policy guidance briefs and the adaptation library for policymakers and decision makers. The material contains relevant and accessible information that synthesises adaptation research. Themes and content were informed by stakeholder engagement and cover issues such as extreme weather events, community vulnerability and resilience, and regional hotspots. An independent organisation is collecting information about the use of these products. Results so far indicate that end users, including local governments, have found them to be valuable resources. As of 30 June 2017, there had been

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Performance criterion

Data and information generated or commissioned by the Department are used by stakeholders and/or support evidence-based decision-making.28,000 visitors to the National Climate Change Adaptation Research Facility’s websites to access information and tools and 1344 registrations for a series of webinars on the material.

Adaptation research networks

Through funding from the Australian Government, in 2016–17, the National Climate Change Adaptation Research Facility continued to oversee four adaptation research networks. The networks, hosted by four universities across Australia, are communities of researchers and practitioners working to advance climate change adaptation knowledge. The networks are producing a series of research plans, which identify critical gaps in the information that governments, industry and the community need to develop and implement effective adaptation responses to climate change. The National Climate Change Adaptation Research Facility reviewed five of the existing research plans. The reviews identified priority questions to inform future research across the Australian research community.www.environment.gov.au/climate-change/adaptation/climate-change-adaptation-program/research-facility

Performance criterion

The Department supports capability development across Government in adaptation and understanding climate risk.

Source PBS 2016–17 p. 55, Corporate Plan 2016–17 p. 33Result Achieved

The Australian Government Disaster and Climate Resilience Reference Group (see next performance criterion) is developing tools, guidance and case studies to enable Australian Government agencies to consider disaster and climate resilience in policies, in programs and for assets. The Department is leading this activity.

Climate Risk and Information Services Platform

We worked with CSIRO to finalise the Climate Risk and Information Services Platform—a prototype online decision support tool. The prototype was developed in partnership with Infrastructure Australia and brings together expertise on best practice adaptation, and climate data and projections. It assists decision makers in the infrastructure sector to consider how to manage implications from a changing climate on their project or program. Future iterations have the potential to assist decision-making across different sectors and geographic locations.

Climate Compass

The Department worked with CSIRO to develop a five-step process to assist Australian public servants to manage climate risks to their policies, programs and assets at all stages. The process can be applied at any stage from strategic policy to operational decision-making. The proposed process will undergo user testing in 2017–18.

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Performance criterion

National coordination, including collaboration with jurisdictions, leading to identification of cross-cutting climate risks and development of future national climate change adaptation priorities and resilience measures.

Source PBS 2016–17 p. 55, Corporate Plan 2016–17 p. 33Result Achieved

In 2016–17, to improve governance and coordination of work on disaster and climate resilience, climate science and climate risk, the Department supported several national bodies in their work on climate risk information. We managed the new Australian Government Disaster and Climate Resilience Reference Group and the new National Climate Science Advisory Committee and continued our participation in the intergovernmental Adaptation Working Group. These three groups play important roles in identifying cross-cutting climate risks, articulating adaptation and climate science policy and research priorities, and informing strategies and actions to ensure an effective national response to climate change.

Australian Government Disaster and Climate Resilience Reference Group

The Department took on the role of co-chair, with the Attorney-General’s Department, of the new Australian Government Disaster and Climate Resilience Reference Group. The group’s purpose is to better integrate disaster and climate resilience into policies, programs and asset management at the national level. The group includes representatives from 22 Australian Government agencies. It first met in July 2016 and then in November 2016, March 2017 and June 2017. In March 2017, the group agreed and began to implement a work plan to guide priorities and track progress. Under this plan, we are leading activities to:

develop tools, guidance and case studies to enable Australian Government agencies to consider disaster and climate resilience in policies, programs and assets management (see previous performance criterion)

oversee the mapping of Australian Government policies, programs and assets that relate to disaster and climate resilience and identify linkages and interdependencies

establish an officer-level network of representatives from all member agencies.

National Climate Science Advisory Committee

In December 2016, the Government established the National Climate Science Advisory Committee. The Department manages the committee jointly with the Department of Industry, Innovation and Science. The committee’s role is to improve the strategic planning and national coordination of climate science. The committee comprises 12 members (including ex officio members) with expertise across climate change science and adaptation, climate modelling, Antarctic and meteorological fields. It will develop and advise the Government on a nationally aligned and integrated approach to climate science to inform the direction and sustainability of Australia’s climate science capability and research priorities. At its first meeting in March 2017, the committee considered the challenges and changes to Australia’s climate science capability, ways to increase engagement with the international climate science community, and the development of a national strategy on climate science. The committee expects to meet two to three times a year.

Adaptation Working Group

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Performance criterion

National coordination, including collaboration with jurisdictions, leading to identification of cross-cutting climate risks and development of future national climate change adaptation priorities and resilience measures.The Department continued to work with the states and territories through the quarterly meetings of the Adaptation Working Group. This group’s achievements in 2016–17 included contributing to the development of the CoastAdapt tool for managing coastal climate risk and sharing knowledge and information on adaptation approaches across jurisdictions.

Analysis against the activity’s intended resultStrong engagement and collaboration between the Department and our partner agencies is vital to achieving successful national coordination to improve climate change resilience and climate risk management. Our investment in these relationships and in tools such as CoastAdapt allowed us to provide guidance, information and coordination to build climate resilience across the Australian Government in 2016–17. These investments meant that businesses and communities are better placed to manage their own risks.

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