NSW State of the Environment 2015

Recent newspaper report alerted me to the fact that the latest edition of the NSW State of the Environment has come out.
The newspaper article highlights a figure from the report that emissions of green house gasses (GHGs) in NSW have only fallen by 1% since 1990 (1990 being a benchmark year under the Kyoto Protocol, and in fact Australia as a nation had an agreed increase in emissions from that 1990 benchmark).
Looking at the report a bit more carefully unpacks some of the reasons for it. Electricity demand, which is one of the largest factors determining GHG emissions, has been falling over the last six years. This is paralleled with a significant change in composition of electricity generating capacity, with no new coal-fired plants, and significant addition of new gas, wind and solar capacity. Surely, this should result in significant reduction in total state GHG emissions, right?
Well, not exactly, because as the report states, the energy consumption in the NSW transportation sector has experienced strong, stable and sustained growth, which is predicted to continue in the future. In the same time, we have not seen major changes in emission efficiency of the NSW vehicle fleet. While there is some penetration of electric and hybrid vehicles this is still very, very small. As a result, transportation is now the single largest GHG emitting sector of the NSW economy.
And it doesn’t look like improvement can be expected any time soon. Trucks and cars are cheap (nominal prices have barely changed over the last 10-15 years, which makes real prices low in relative terms), petrol is cheap (cheapest that I have seen certainly over the last ten years, and again I am talking nominal prices), and public transport is expensive (catch a bus and a train to and from pretty much anywhere in Sydney, and it will be at least $10 on your Opal).
So, we will keep driving, ‘enjoying’ the traffic jams in Sydney, and sending GHGs in the atmosphere. Well done NSW!

Author: Tiho Ancev

Tiho Ancev is a Professor of Agricultural and Resource Economics in the School of Economics, University of Sydney. His main research areas are agricultural, environmental, natural resource and energy economics. Tiho’s main contributions have been in water economics and policy, economics of energy, economics of air pollution and climate change policies, and economics of precision agriculture and agricultural input use. He has published widely on these topics in top international peer reviewed journals. Tiho has led and contributed to national and international research projects in these research areas. He is currently the Managing Editor-in-Chief of the Australian Journal of Agricultural and Resource Economics.