Greenhouse gas (GHG) emissions in Australian states and territories: Determinants and policy implications

Abstract

In order to implement effective climate mitigation policies, it is imperative to understand the determinants of GHG emissions. Our research indicates, no state and territory level analysis of Australia, for the determinants of GHG emissions has yet been carried out. This paper identifies the main determinants that affect GHG emissions growth in Australia and assesses their impact in the main Australian states and territories. It performs a rigorous statistical analysis and contrasts the significance of determinants using Feasible Generalised Least Squares (FGLS) Regression and the Linear Panel Data Model with Random effects for the period 1990–2018 for seven states and territories of Australia. We find a mix of GHG determinants in being significant for different states and territories while some show none of the determinants as being significant. Environmental policy analysis is later carried out and then compared with the empirical findings of this study. It is found that it is only in the latter half of the period under observation that some states and territories have instituted encouraging climate change policies while the rest lag behind. Heterogeneous climate mitigation policies, at state and territory level, will have to be implemented to decouple the significance of GHG emissions from its determinants. Also, the ready and comprehensive availability of data for unique variables, such as Savanna burning, will give clearer direction to heterogeneous and customized climate change policy solutions. Lastly, climate mitigation success in TAS (Tasmania), could serve as a leading case study to institute similar renewable energy measures in other states and territories.