Convergence of Greenhouse Gas Emissions in Australia: A Regional Analysis

Abstract

Australia’s emissions from fossil fuels and industry have been on the rise since 2014 and may fall short of its required 2030 Paris Agreement target of 26-28% (below 2005 levels). While much effort has been made by various states and territories in setting emission targets and the uptake in renewable energy sources, significant inroads need to occur in order to meet the 1.5˚C target. Understanding the dynamics of greenhouse gas (GHG) emissions at the regional level is thus essential for policymakers in achieving emission targets given the decomposition of industry at the regional level. We investigate the convergence process of three important GHG emissions – carbon dioxide, nitrous oxide and methane emissions – at regional level over the period 1990 to 2017. Our results identify multiple convergence clusters in GHG emissions highlighting the need for tailored policies at the regional level. To gain an understanding in the factors driving these results, we analysed the determinants of the convergence process and identified that state income per capita, urbanisation, and international trade play a crucial in the convergence path off GHG emissions.