Climate change is a global problem that will require coordinated international action by all countries. The Paris Agreement, to which 195 countries (including Australia) have agreed, aims to hold the increase in the global average temperature to well below 2 °C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5 °C. As its contribution, the Australian Government has committed to reducing emissions to 26–28 per cent below 2005 levels by 2030.

In the 5 years since SoE 2011, international climate science has advanced significantly. The Intergovernmental Panel on Climate Change published its Fifth Assessment Report in September 2013, confirming that humans have been the dominant cause of warming since the 1950s. A significant amount of Australia’s contribution to global and regional understanding of climate change was carried out under the Australian Climate Change Science Program, to which the Australian Government committed $15 million per year between 2011 and 2015. The 26-year program was replaced with the National Environmental Science Programme’s Earth System and Climate Change Hub in 2016 at an investment level of $23.9 million across 5 years.

Australian governments have implemented policies to reduce greenhouse gas emissions. Measures include labelling and minimum performance standards for appliances, changes to building codes to drive energy efficiency, and restrictions on land clearing. Both national and state market-based schemes have also been implemented to promote emissions reductions.

Since 2001, the Renewable Energy Target has encouraged the generation of electricity from renewable sources using tradeable certificates that are created by renewable energy generators. The Clean Energy Future package, legislated under the Clean Energy Act 2011, saw a cap-and-trade emissions trading scheme that started in July 2012, which included a carbon price covering more than half of Australia’s emissions, and the Carbon Farming Initiative, which provided incentives to reduce emissions in the land sector. As part of the Australian Government’s Direct Action Plan, the Clean Energy legislation was repealed in 2014 and the Emissions Reduction Fund (ERF) was introduced. The ERF involves crediting, purchasing and safeguarding emissions reductions. The Clean Energy Innovation Fund, announced in March 2016, will provide $1 billion to support emerging clean energy technologies.

Improved energy efficiency can reduce energy demands and is another way to reduce emissions. National strategies—such as minimum energy performance standards and mandatory energy rating labels for appliances, and construction codes, energy rating schemes and disclosure of energy performance for buildings—have aimed to increase energy efficiency. The National Energy Productivity Plan (NEPP), announced in 2015, will now form the overarching framework for improving energy efficiency. The goal of the NEPP is to improve Australia’s energy productivity by 40 per cent between 2015 and 2030.

Between December 2012 and June 2014, emissions from the electricity sector decreased in conjunction with a decrease in electricity demand. Emissions from the transport, industrial and agriculture sectors also decreased. By June 2015, emissions from the electricity sector had increased, but demand for electricity had flattened, suggesting an increase in the emissions intensity of delivered electricity. Emissions from the agriculture sector also decreased.

Emissions projections reported in 2016 suggest that Australia is on track to exceeding its emissions reduction target in 2020. However, many of the factors that contributed to the significant downwards revision in the cumulative abatement task are likely to change (e.g. growing seasons may improve; commodity prices may increase), so that the cumulative abatement task may be revised upwards in later projections. In addition, the significant debate about whether the ERF will be as effective as proposed by the Australian Government contributes to uncertainty around the cumulative abatement presented in 2016.