Building the foundations for Australia’s carbon price Australia’s experiences in developing national inventory (MRV) systems

2 Scene setting Two critical aspects of MRV systems in Australia Evolution of institutions This presentation will cover the following: 12 3

Australia’s challenge: decreasing GHG emissions 3

Major design issues for Australia’s MRV system Maintaining compliance with international reporting obligations: national inventories Using MRV to support the drive for mitigation in the private sector..eg MRV for the carbon price Policy efficiency - efficient recognition of company and project level abatement at the national level Building the confidence of users of the data

5 Scene setting Two critical aspects of MRV systems in Australia Evolution of institutions 12 3

6 1991: GHG Inventory established 1999: Land Sector MRV Systems 2004: Integrated information systems 2007: National Greenhouse and Energy Reporting systems 2012: Carbon Pricing Mechanism Australia’s National GHG Inventory

1991: Which government produces the national inventory? Council of Australian Governments (1991) ─ Centralised inventory preparation with National Government  Prototype inventory produced in 1991  Reliance on existing data collection systems, published datasets  Prepared infrequently  Expertise spread across departments

1999: Which agency produces the national inventory? Council of Australian Governments (1991) Australian Greenhouse Office 1999 ─ Part of a major tax reform ─ Response to Kyoto Protocol ─ Annual inventory reporting to build capacity  Became Department of Climate Change in 2008

Department of Climate Change and Energy Efficiency (DCCEE) MinisterDCCEE Bureau of Resource Economics Australian Bureau of Statistics CSIRO GeoScience Australia Clean Energy Regulator

2007: NGER System Council of Australian Governments (1991) Australian Greenhouse Office (1999) National Carbon Accounting System ( ) Australian Greenhouse Emissions Information System (AGEIS) ( ) National Greenhouse and Energy Reporting (NGER) System ( ) ─ Mandatory reporting system for companies

National Greenhouse and Energy Reporting Act Supports both a national inventory system and a carbon pricing mechanism. 11 Energy Industrial Processes Waste CO2CH4N2OHFCsPFCsSF6 Mandatory reporting for all companies that reach an emissions threshold (around 500 companies).

2011: Passing of carbon price legislation Council of Australian Governments (1991) Australian Greenhouse Office (1999) National Carbon Accounting System ( ) Australian Greenhouse Emissions Information System (AGEIS) ( ) National Greenhouse and Energy Reporting System ( ) Carbon Pricing Mechanism, Carbon Farming Initiative (2011)

Electricity emissions: short and long run trends

Australia’s Carbon Pricing Mechanism 14 Emissions reporting 1July 2008 Fixed price emissions trading 1July 2012 Flexible price emissions trading with price controls 1 July 2015 Fully flexible emissions trading 1 July 2018 On average around 20 per cent of domestic liabilities are expected to be met using international permits National Greenhouse and Energy Reporting (NGER) Energy, industrial processes, waste (60% of the inventory) $A23/t in Maximum price control

Electricity emissions: short and long run trends

16 Scene setting Two critical aspects of MRV systems in Australia Evolution of institutions 12 3

National Inventory System objectives Policy efficiency  What if the national inventory is blind to mitigation action by companies?  What if the national inventory does not recognise the right level of mitigation action by companies?  What if there is a risk of double counting?

International National Greenhouse Accounting framework – aligning international, national, state, project estimation methods Company/project National

Nesting international, national, company/project level methods International IPCC Guidelines for estimation of national inventories UNFCCC accounting rules National National Inventory Reporting Company, Facility, Project NGER Measurement Determination Carbon Farming Methodologies

Co-ordinating estimation methods – NGERS Measurement Determination greenhouse-factors.aspx

Accounting: completeness across jurisdictions/entities National = sum of States National = sum of corporations + Households + Government National = sum of facilities

National Inventory System objectives Policy efficiency – supporting domestic abatement programs Building the confidence of users – both international and domestic

Quality Assurance - domestic External experts Australian National Audit Office (ANAO)  In 2009, ANAO performance audit - standard AAUS3500 User Reference Committee ─ Industry and green groups National Greenhouse Gas Inventory Committee ─ State representatives, CSIRO

Building confidence internationally UNFCCC annual review ─ facilitative, Kyoto Protocol ─ Increased focus on compliance, raises scrutiny/ pressure not a bad thing Bilateral dialogues with partner governments ─ Capacity building  Indonesia, Thailand,..... Malaysia.... Informal – Singapore, China ─ Mutual exchanges  Republic of Korea, New Zealand

QUESTIONS?