What would halving Australia's greenhouse emissions over 1990 levels look like? How would it affect our economy, and our lives?

McKinsey & Company's report An Australian Cost Curve for Greenhouse Gas Reductions found that a "significant reduction in Australian GHG emissions is achievable — 30 per cent below 1990 levels by 2020 without major technological breakthroughs or lifestyle changes. These reductions can be achieved using existing approaches and by deploying mature or rapidly developing technologies to improve the carbon efficiency of our economy."[1]

The net cost of this 30% cut was calculated to be as low as $290 per household per year, if prompt action is taken across the widest possible base of the economy. This cost, less than $1 per day, represents a small fraction of the increase in annual household income of well over $20,000 expected by 2020. Given the magnitude of the risk we face, GetUp believes Australians are prepared to do more to meet the challenge.

Australia has one of the most carbon-intensive economies in the developed world, in part because we also have some of the cheapest energy in the world. Around 75% of our electric power comes from coal — the dirtiest form of conventional power generation. The Howard government often claimed that this carbon intensity makes the job of reduction harder. But in fact, the opposite is true. If we were to get down to the same level of carbon efficiency that already exists today in Europe, we would already have reduced our emissions by over 50%. On the other hand, Europeans, who already emit much less than us, are committing to reduce further. [2]

So how much would it cost to do more? There are many cheap, and sometimes money-saving, opportunities to reduce emissions that were not included in the McKinsey report (eg public transport). But for argument's sake, let's take a highly conservative approach, ignoring all of these cheap opportunities, and assume that all additional reductions would cost $80 per tonne of CO2. This is well above the price of the most expensive measure considered in the report ($65), and twice the current European price of $40. Reducing our emissions by 50% instead of 30% would require an additional 110 megatonnes of reductions. Doing the maths, the total cost of the economic activity required would amount to $11.7 billion or around $3 per household per day [3]. By comparison, this is roughly the cost of the Australian advertising industry [4] , and significantly less than the economic cost of road accidents [5].

Australians would still be significantly wealthier in 2020 than they are today — this amount represents less than 5% of the extra income we are projected to have by that year.

What would Australia be like if we halved our emissions by 2020? Without doubt, we would need to make bold, rapid changes to our economy. New industries will need to be created and expanded — in energy efficiency, industrial-scale reafforestation, renewable energy, and new clean tech industries. Hundreds of thousands of new jobs will be created, spurred by our investments in these activities. In Germany, already 250,000 people are employed in the renewable energy sector and renewable energy exports have boomed [6]. New buildings will be designed very differently to the way they are designed today, to be more energy efficient, in some cases helping generate their own power and feeding it back into the grid.

To enable people to make the shift away from private cars, and away from the pollution, congestion and road fatalities they cause, we may need to take innovative steps — investing in free, reliable public transport and pedestrian- and bike-friendly neighbourhoods. The private cars that we do need can be hybrids and eventually full electric vehicles, supported by charging infrastructure. The power required will need to be supplied by a rapidly increasing supply of renewable energy, as we phase out coal-fire power plants. Like the rest of the world, we will no longer have the luxury of cheap flights, and our most trafficked inter-city flight paths could be replaced by fast trains, as they are in many other countries. There will also be a myriad of substitutions and subtler shifts in the kinds of products and services we consume — where we source our food, which items become cheaper and which become more expensive.

These are big changes for any society to undertake in 12 years. And for many of us, change can be scary — especially changes as big as these. But the alternative, the cost of not making these big changes, is much worse. And the benefits of early action to reduce emissions will be far more than just achieving a safe climate future: they will also revitalise our communities as people walk, cycle and take public transport more. They will create hundreds of thousands of new green-collar and green-professional jobs. If we halve our emissions by 2020 over 1990 levels, we will have pulled together as a society, overcoming old differences in one united effort to address the greatest challenge of our generation. And perhaps most importantly, we will raise the bar for other, larger nations, amplifying our impact and reversing a decade of obstructionism. With among the most to lose, and starting from among the highest levels of emissions — if we don't aim to make major cuts, who will?

It is time for bold leadership in the debate on climate solutions. GetUp is confident that Australia is innovative enough and resourceful enough to make large changes in a short period of time, as has happened in previous periods of human history. Much greater material sacrifices have been made by generations who are still with us today. The very survival of our species depends on a rapid, major response. We must rise to the challenge.

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[1] Executive Summary, McKinsey & Company (2008) An Australian Cost Curve for Greenhouse Gas Reduction, Sydney.
[2] Current EU policy commits to further reductions of 30% by 2020, provided other developed nations do their part: EU Climate action and renewable energy package.
[3] Adding the cost of the McKinsey 30% scenario ($2.9 billion) to the incremental cost of the additional 20% reductions (110 M x $80 = $8.8 billion)
[4] AUSTRALIA: Ad spend tipped to top $10bn this year, The Age, Thursday, 15 April 2004.
[5] $17billion annual bill for road trauma, University of Queensland, 15 June 2006.
[6] Laura Blue/ Schwandorf, Lessons from Germany, Time, April 28, 2008 at 46.