Via the ABC:
Do Australia’s greenhouse gas emissions account for more than 5 per cent of the global total once exports are included, as Mike Cannon-Brookes says?
The claim
In a recent speech to the United Nations, Prime Minister Scott Morrison sought to downplay Australia’s contribution to world greenhouse gas emissions, arguing the nation is responsible for just 1.3 per cent of the global total.
An alternative view is that Australia’s culpability is in fact much greater — after billions of dollars’ worth of fossil fuel exports are factored in.
IT entrepreneur and outspoken climate change commentator Mike Cannon-Brookes issued a recent tweet claiming that Australia’s share of the global total rises to more than 5 per cent once the emissions embedded in its exports are included.
“The science is clear,” Mr Cannon-Brookes tweeted. “Coal is the #1 source of climate damage. Our world is at war & Aus is one of the principal arms dealers!”
“As only 25m people, we generate + export over 5% of the world’s emissions today.”
Is it correct that Australia is responsible for more than 5 per cent of the world’s emissions if exports are included? RMIT ABC Fact Check investigates.
The verdict
Mr Cannon-Brookes has overstated the extent to which Australia’s exports contribute to global greenhouse gas emissions.
There are, broadly, two ways to interpret Mr Cannon-Brookes’s claim.
The first is to assume he was referring to Australia’s total domestic emissions, plus the emissions embedded in its exports, as a proportion of total world emissions.
Fact Check estimated that Australia’s domestic emissions plus the emissions embedded in its exports added to 1,712 million tonnes in 2016.
This represents roughly 3.6 per cent of total global emissions for that year, the latest reliable figures for global emissions.
This is somewhat less than the over 5 per cent claimed by Mr Cannon-Brookes.
The second interpretation is that Mr Cannon-Brookes was referring only to emissions linked to burning fossil fuels, as is common with this type of analysis.
If the calculation is restricted to emissions from fossil fuel combustion — excluding land-use changes and agriculture among other things — Australia’s domestic fossil fuel emissions plus emissions from its fossil fuel exports were roughly equivalent to 4.8 per cent of the global total for fossil fuel emissions in 2016.
Although Mr Cannon-Brookes did not specify in his tweet that he was referring to emissions linked only to burning fossil fuels, this figure aligns more closely with his claim.
However, the equation is not so simple. If Australia’s “exported” fossil fuel emissions are to be compared against a global total, “imported” emissions should be netted out to avoid double counting.
Put another way, if Australia is to be held accountable for its fossil fuel exports, its fossil fuel imports should equally not be counted in Australia’s domestic total. For consistency, that responsibility should be attributed to the country selling the product.
Fact Check estimated that removing Australia’s imported fossil fuel emissions from the total reduces Australia’s share of world emissions from fossil fuel combustion from about 4.8 per cent to about 4.4 per cent. Or, for total emissions, the total falls from 3.6 per cent to 3.3 per cent.
Whether a resource-rich country such as Australia should be accountable for emissions embedded in exports requires a subjective judgment about whether emissions should be attributed to the seller or user of fossil fuels.
Nevertheless, experts consulted by Fact Check pointed out, examining the emissions embedded in exports is a useful exercise in its own right as it underscores the vulnerability of the Australian economy to future international measures to tackle climate change by curbing the use of fossil fuels.
Greenhouse gas emissions accounting
There are three methodologies for carving up emissions between countries.
The most common (sometimes referred to as territorial-based carbon accounting) is used by the United Nation’s Intergovernmental Panel on Climate Change to track progress towards Kyoto and Paris climate commitments.
It attributes emissions to activity that takes place within a country’s borders.
Under this approach, Australia’s vast coal and liquefied natural gas (LNG) exports are not counted in the national greenhouse gas tally, except through “fugitive” emissions generated in the production and processing of those exports within Australia’s borders.
What matters under this approach, from an international carbon accounting perspective, is the country where the emissions are released into the Earth’s atmosphere, for example through the combustion of a fossil fuel.
An alternative is sometimes referred to extraction-based accounting. It attributes emissions to the country that extracted a fossil fuel, regardless of whether the fossil fuel was subsequently exported or consumed domestically.
Experts contacted by Fact Check for guidance in assessing Mr Cannon-Brookes’s claim noted that extraction-based accounting calculations typically compare only emissions from fossil fuels. This excludes those emissions not caused by the combustion of fossil fuels, such as from land-use and agriculture.
A third approach is sometimes referred to as consumption-based accounting. It is more complex and less transparent, but it takes into consideration trade flows by counting emissions embodied in manufactured products at the point where those products are consumed, rather than produced.
This is particularly significant when examining a country such as China, which uses vast quantities of fossil fuels to manufacture products consumed elsewhere, for example, in Europe, North America and Australia.
Fact Check has examined Mr Cannon-Brookes’s claim from a territorial-based accounting perspective and from an extraction-based accounting perspective.
Australia’s “territorial” emissions versus global emissions
Estimates of global emissions are published by the Potsdam Institute for Climate Impact Research (PIK), as detailed by climate data visualisation website Climatewatch. The PIK is an independent, not-for-profit organisation that undertakes research in the field of climate science, funded by German national and local government bodies and the European Union, among others.
Experts told Fact Check its data is consistent, allowing “like-for-like” comparisons between countries, and across years.
The latest figures available are for 2016. For that year, the PIK estimates total global emissions of about 47,200 million tonnes of carbon dioxide equivalent.
The PIK also publishes comparable data for individual countries. It estimates Australian emissions totalled 552 million tonnes in 2016, excluding land-use and forestry.
This suggests Australia’s domestic emissions made up roughly 1.2 per cent of the global total in 2016.
In Australia, the Department of the Environment and Energy publishes national emissions figures.
It estimates that Australia emitted 532.3 million tonnes of greenhouse gas emissions in calendar year 2016, including land-use and forestry (which reduced emissions that year due to activities such as tree planting).Excluding land-use and forestry, the figure was 550 million for calendar 2016.
Electricity generation remains the biggest contributor to Australia’s emissions, followed by emissions from the transport sector and emissions from “direct combustion” (through, for example, heating or manufacturing production).
Fossil fuel emissions
When it comes to fossil fuel emissions — a more limited measure that excludes sectors such as agriculture — the International Energy Agency (IEA) publishes data for world emissions and for individual countries.
Its figures show that Australia’s fossil fuel emissions totalled 392.4 million tonnes in 2016, representing about 1.2 per of a global total of 32,314.2 million tonnes.
“Exported” emissions
Australia’s exported emissions principally come from two sources: coal and liquefied natural gas, or LNG. Australia also exports relatively small amounts of crude oil and liquefied petroleum gas (LPG), a refinery product.
Australia imports crude oil and various refinery products such as automotive fuel and aviation fuel. These imports are counted in Australia’s domestic emissions under the territorial accounting system, as they are used within Australia’s borders.
Fact Check used the Department of Industry, Innovation and Science publication Resources and Energy Quarterly as a source of data for Australia’s exports.
The emissions embedded in these exports were then calculated by converting exports into appropriate units and applying “energy content factors” and “emissions factors” for various fossil fuels, detailed in the Department of the Environment and Energy’s National Greenhouse Accounts Factors.
The department’s Guide to Australian Energy Statistics 2017 was also used for key assumptions.
The guide notes that determining the energy content of a given quantity of Australian coal or LNG is “an exercise that can involve a significant degree of uncertainty”.
“For example, the energy content of a tonne of coal can vary according to its region or locality of origin and according to the maturity of the mine from which it was extracted,” the guide says.
“Similarly, conversion factors for other primary energy sources such as crude oil, natural gas and wood, can also vary by region and other factors.”
Although more recent export data is available, Fact Check relied on 2016 figures, as this is the latest year for which the PIK global emissions data is available.
What happens to Australia’s fossil fuel exports?
To state the obvious, Australia’s fossil fuel exports are used by other countries to produce power, fuel and manufactured products.
The emissions produced by these exports ultimately depends on what they are used for.
Different “emissions factors” are applied for different fossil fuels, and different uses.
As the Department of Energy and Environment puts it in its National Greenhouse Accounts Factors publication: “It is important to note that an emission factor is activity-specific. The activity determines the emission factor used.”
In reality, determining exactly how Australia’s fossil fuel exports are used is difficult. Consequently, in line with some resource companies that have undertaken “scope 3” analyses to estimate the emissions more broadly linked to their business activities,
Fact Check has assumed Australia’s fossil fuel exports are each used for a single purpose. For example, it is assumed all exported metallurgical coal is combusted for steel making and all thermal coal is combusted for power generation.
Different assumptions can produce slightly different results. By necessity, the calculations undertaken by Fact Check are estimates.
Fact Check has generally used the emissions factors from the category in the National Greenhouse Accounts Factors described as “stationary combustion of solid, gaseous and liquid fuels”.
The document explains: “Estimates of emissions from the combustion of individual fuel types are made by multiplying a (physical) quantity of fuel combusted by a fuel-specific energy content factor and a fuel-specific emission factor.”
In undertaking a scope 3 accounting analysis to estimate the greenhouse gases linked to its operations, resource giant BHP used similar assumptions and a similar methodology for its estimates of emissions from its fossil fuels used by its customers.
The principal greenhouse gas generated by the combustion of fossil fuels for energy is carbon dioxide. Small quantities of methane and nitrous oxide are also produced, depending on the actual combustion conditions.
Australia’s coal exports
In 2016, Australia exported 391.2 million tonnes of coal, made up of 201.9 million tonnes of thermal coal (used mainly for power generation) and 189.2 million tonnes of metallurgical coal (used mainly for steel production).
That was more than double the 186.7 million tonnes exported in 2000.
Australia’s exported coal is regarded as high quality by international standards, with a relatively high energy content, as previously discussed by Fact Check.
Emissions for exports of metallurgical and thermal coal have been calculated separately as the energy content and emissions factors are different.
The following tables show the figures used by Fact Check to estimate the greenhouse gas content of Australia’s thermal and metallurgical coal exports.
As explained in the National Greenhouse Account Factors, the first three columns are multiplied, and then divided by 1,000 to produce the amount of carbon dioxide equivalent in tonnes. (The division is necessary because the emissions factor is expressed in kilograms, while the emissions are expressed in tonnes, or 1000 kilograms.)
Fossil fuel combusted 2016 exports, million tonnes Energy content, gigajoules per tonne Emissions factor, kilograms CO2-e per gigajoule Greenhouse gas emissions, million tonnes CO2-e Thermal coal 201.9 27 90.23 491.9
Fossil fuel combusted 2016 exports, million tonnes Energy content, gigajoules per tonne Emissions factor, kilograms CO2-e per gigajoule Greenhouse gas emissions, million tonnes of CO2-e Metallurgical coal 189.2 29 92.02 504.9 Notes: Export data from the Department of Industry, Innovation and Science, Resources and Energy Quarterly, historical data, table 16; emissions calculated using the methodology outlined in Department of the Environment and Energy, National Greenhouse Accounts Factors. Energy content for exported thermal and metallurgical coal taken from Department of Environment and Energy, Guide to the Australian Energy Statistics 2017; totals may not add due to rounding
In total, Australia’s coal exports produced approximately 996.8 million tonnes of carbon dioxide equivalent in 2016. That alone was almost double Australia’s total domestic emissions.
Australia’s gas exports
Australia’s exports of liquefied natural gas (LNG) have also boomed, increasing more than five-fold over the past decade.
In 2016, Australia exported 45.0 million tonnes of LNG, according to the Department of Industry, Innovation and Science publication Resources and Energy Quarterly.
Fact Check converted this into gigajoules, assuming 1 tonne of LNG contains 54.4 gigajoules of energy. This assumption is consistent with the Department of Environment and Energy publication, Guide to the Australian Energy Statistics 2017.
The following table shows the figures used to estimate the greenhouse gas content of Australia’s 2016 LNG exports.
Fossil fuel combusted 2016 exports, million tonnes Energy content, gigajoules per tonne Emissions factor, kilograms CO2-e per gigajoule Greenhouse gas emissions, million tonnes of CO2-e LNG 45 54.4 51.53 126.1 Notes: Export data from Department of Industry, Innovation and Science, Resources and Energy Quarterly, historical data, table 16; emissions calculated using the methodology outlined in Department of Environment and Energy, National Greenhouse Accounts Factors; assumes 1 tonnes of LNG contains 54.4 gigajoules of energy; Department of Environment and Energy, Guide to the Australian Energy Statistics 2017
In total, Australia’s 2016 LNG exports contained roughly 126.1 million tonnes of carbon dioxide equivalent.
Crude oil and refinery products
Australia exported 12,905.1 million litres of crude oil in 2016. This was equivalent to 10.324 million tonnes, assuming one tonne of domestically produced (indigenous) crude oil contains 1,250 litres, the conversion factor detailed in the Department of Environment and Energy publication, Guide to the Australian Energy Statistics 2017.
Fossil fuel combusted 2016 exports, million litres 2016 exports, million tonnes Energy content, gigajoules per tonne Emissions factor, kilograms CO2-e per gigajoule Greenhouse gas emissions, million tonnes of CO2-e Crude oil 12,905.1 10.324 46.3 69.90 33.4 Notes: Export data from Department of Industry, Innovation and Science, Resources and Energy Quarterly, historical data, table 16; emissions calculated using the methodology outlined in Department of Environment and Energy, National Greenhouse Accounts Factors; figures converted from million litres into tonnes assuming 1 tonne of Australian crude oil equals 1250 litres; Department of Environment and Energy, Guide to the Australian Energy Statistics 2017
This converts into 33.4 million tonnes of carbon dioxide equivalent.
In 2016, Australia also exported 2,245,000 kilolitres of liquefied petroleum gas (LPG), containing 3.5 million tonnes of carbon dioxide equivalent.
Fossil fuel combusted 2016 exports, kilolitres Energy content, gigajoules per kilolitre Emissions factor, kilograms CO2-e per gigajoule Greenhouse gas emissions, million tonnes of CO2-e LPG 2,245,000 25.7 60.60 3.5 Notes: Export data from Department of Industry, Innovation and Science, Resources and Energy Quarterly, historical data, table 16; emissions calculated using the methodology outlined in Department of Environment and Energy, National Greenhouse Accounts Factors.
In addition, Australia also exports various other refinery products, but the amounts are relatively small and have not been quantified by Fact Check.
Australia’s “exported” fossil fuel emissions
These figures suggest in 2016 Australian exports of fossil fuels contained approximately 1,160 million tonnes of greenhouse gas emissions. This was more than double Australia’s domestic emissions (using the PIK data).
When added together, the total for domestic and exported emissions rises to 1,712 million tonnes.
As discussed, in 2016, according to the PIK data, global emissions totalled 47,200 million tonnes. This suggests Australia’s domestic emissions, plus its exports, made up about 3.6 per cent of the global total.
While this is somewhat less than the figure cited by Mr Cannon-Brookes, it is important to note that different assumptions and data sources produce different results.
As experts noted, extraction-based accounting calculations typically compare only emissions from fossil fuels. This excludes those emissions not caused by the combustion of fossil fuels, such as from land-use, agriculture and waste.
Australia’s domestic emissions from fossil fuels in 2016 totalled 392.4 million tonnes, according to the International Energy Agency. Adding in emissions embedded in fossil fuel exports brings this total to roughly 1,552 million tonnes.
The same data shows global emissions from the combustion of fossil fuels reached 32,314 million tonnes.
That suggests Australia’s domestic emissions from the combustion of fossil fuels, plus emissions embedded in its fossil fuel exports were equivalent to about 4.8 per cent of the world total in 2016.
Although Mr Cannon-Brookes did not specify in his tweet whether he was referring to emissions linked to burning fossil fuels, this figure is more consistent with his claim.
It is also similar to the conclusion of a July 2019 report by consulting firm Climate Analytics.
It found that Australia’s fossil fuel exports and domestic fossil fuel emissions accounted for “about 5 per cent” for the global total for fossil fuels.
What about fossil fuel imports?
While Australia is a massive exporter of coal and liquefied natural gas, it is also an importer of fossil fuels, including crude oil, petrol, aviation fuel, and diesel.
Failing to net off emissions from Australia’s fossil fuel imports leads to a degree of double counting.
If Australia is to be held accountable for its fossil fuel exports, its fossil fuel imports should equally not be counted in Australia’s domestic total. For consistency, that responsibility should be attributed to the country selling the product and counted once as part of the global total.
In 2016, Australia imported about 21,185 million litres of “crude oil and other refinery feedstock”, 6,440 million litres of petrol (automotive gasoline), 5,645 million litres of aviation fuel, 17,885 million litres of diesel and 966 million litres of liquefied petroleum gas, according to the Department of Industry, Innovation and Science publication Resource and Energy Quarterly.
Fact Check calculated the emissions embedded in these imports, again using the methodology outlined in the Department of Environment Energy’s National Greenhouse Accounts Factors, with key assumptions taken from the department’s Guide to Australian Energy Statistics 2017.
Australia’s fossil fuel imports Quantity Emissions (million tonnes CO2-e) Crude oil (million tonnes) 18.263 57.3 Diesel (million litres) 17,886.2 48.5 Automotive gas (million litres) 6,439.8 14.9 Aviation fuel (million litres) 5,644.9 13.0 LPG (million litres) 996.0 1.5 Total emissions 135.2 Notes: Import figures from Department of Industry, Innovation and Science, Resources and Energy Quarterly, historical data, table 31(3); emissions calculated using the methodology outlined in Department of Environment and Energy, National Greenhouse Accounts Factors; assumes 1 tonne imported crude oil equal to 1160 litres (average for imports); Department of Environment and Energy, Guide to the Australian Energy Statistics 2017
If Australia’s fossil fuel imports, containing an estimated 135.2 million tonnes of carbon dioxide equivalent, are netted off, Australia’s share of the global emissions from fossil fuel combustion falls from roughly 4.8 per cent to roughly 4.4 per cent, while Australia’s share of total emissions falls approximately from 3.6 per cent to 3.3 per cent.
What happened to Australia’s emissions after 2016?
As discussed, Fact Check has relied on data for 2016 because this is the latest year for which the PIK global emissions figures are available. It is, however, possible that Australia’s share of the global total has increased since then.
In 2018, for example, Australia exported 70 million tonnes of LNG, up 56 per cent compared to the 45 million tonnes exported in 2016.
Coal exports have, however, remained relatively stable in recent years. In 2018, Australia exported 386.5 million tonnes of metallurgical and thermal coal, down slightly from the 391.2 million tonnes exported in 2016.
The latest available IEA data for fossil fuel emissions is for 2017. It shows Australia’s fossil fuel emissions fell slightly to 384.6 million tonnes, representing about 1.2 per cent of the global total (32,839.9 million tonnes), the same proportion as in 2016.
What the experts say
Professor Frank Jotzo, Director of the Centre for Climate Economics and Policy at Australian National University, said accounting for the greenhouse gas emissions embedded in fossil fuel production was often used as a moral argument to emphasise an indirect responsibility of fossil fuel producing and exporting countries.
“Standard national emissions inventories count the emissions that arise from activities within that country, including the burning of fossil fuels,” Professor Jotzo said.
“So they focus on actions that are most directly under a country’s control.”
Professor Jotzo said understanding the extent of emissions embedded in exports provided an insight into the vulnerability of large export industries to climate change policies.
“There is extremely little room long-term for fossil fuels in a net-zero emissions world economy, and probably almost no room for thermal coal,” he said.
Climate Council senior researcher Tim Baxter said the three different methods of accounting for emissions each provided only a partial picture of Australia’s contribution.
“Whichever way you look at it, Australia’s emissions are globally significant, and whichever way you look at it, they are increasing.”
Mr Baxter said it was common in extraction-based accounting for calculations to include only those emissions from fossil fuels.
“A significant proportion of global emissions come from land-use, agriculture and waste, none of which are caused by fossil fuels. If these were discounted in Mr Cannon-Brookes’s numbers, then it is possible to get to a number like 5 per cent,” he said.
Tim Buckley, director of Energy Finance Studies, Australasia, at the Institute for Energy Economics & Financial Analysis, said adding exported emissions (sometimes referred to as “scope 3” emissions) was regarded as contentious, potentially involving a degree of double counting, unless “imported emissions” were deducted.
But Mr Buckley said the exercise was useful because it provided a clear indication of a country’s exposure to climate risks.
“Australia as the world’s third largest fossil fuel exporter is very exposed. Japan as a country reliant on 95 per cent imported fossil fuels for its energy needs is also very economically exposed,” Mr Buckley said.
