Australia currently claims to be on track to meeting its Kyoto commitments, despite non-ratification.

The inclusion of the ‘Australia Clause’ to the Kyoto Protocol in 1997 is responsible for the dip in reported emissions after 1990. This clause requires Australia and the United Kingdom to include LULUCF sinks and sources in their calculations. This requirement creates a ‘free’ 37 million tonne per annum reduction in land clearing emissions for Australia due to changes in land clearing laws, and almost halves the required reductions from other sources.

The federal government has implemented a range of enabling and incentive based programs that were projected to create 46.3 million tonnes of abatement during 2003-2004. These initiatives were heavily subsidised by taxpayers and ran at an average cost of $4 per tonne of abatement. 

Although one of the programs, the Mandatory Renewable Energy Target scheme, is empowered by a penalty of $40/MWh (roughly equal to $40/tonne of CO2e), the federal government is currently opposed to a broad scale greenhouse emissions penalty scheme.  In particular, the federal government claims that such schemes are needlessly expensive, tax economic development, do not create long term solutions and do not adequately invest back into Australia’s economy.