This country note features selected environmental indicators from the OECD Core Set, building on harmonised datasets available on OECD Data Explorer. The indicators reflect major environmental issues, including climate, air quality, freshwater resources, waste and the circular economy, and biodiversity. Differences with national data sources can occur due to delays in data treatment and publication, or due to different national definitions and measurement methods. The OECD is working with countries and other international organisations to further improve the indicators and the underlying data.
Environment at a Glance: Australia
Australia is the world's sixth largest country and has the third-largest ocean territory. It is also the driest inhabited continent. The country’s steady economic growth has helped improve the living standards of a growing population. The economy is service based but highly resource-intensive due to the high level of extraction and use of metal ores and fossil energy materials, and low population density.
The continent is relatively flat, with the planet’s lowest average elevation. It is endowed with a wide variety of natural resources. This includes abundant energy resources: fossil fuels (coal, natural gas, oil), renewables (wind, solar, geothermal, wave, tidal and biomass), uranium, as well as significant other metal and mineral resources (aluminium, iron, gold, copper, nickel, zinc and mineral sands). Australia is one of 17 megadiverse countries with 10% of global biodiversity and a high level of endemic species. The country has a variety of ecosystems, from tropical wetlands and rainforests to eucalypt forests, a central desert and coral reefs, such as the Great Barrier Reef. While it is among the world’s less densely populated countries, Australians live mostly on the eastern, southeastern and southwestern coasts in dense urban areas. Environmental responsibilities are shared between the Commonwealth (federal) government, six states and two territories, and over 560 municipalities.
Australia has significantly raised its climate ambitions, with the 2022 Climate Change Act doubling the target for emissions reductions by 2030 and setting the goal of reaching net zero emissions by 2050. Australia also signed up to the Global Methane Pledge in 2022, joining 130 governments who are collectively targeting a reduction in methane emissions of at least 30% by 2030 across all sectors.
However, the net zero commitment requires a faster trajectory and increased efforts in energy efficiency and renewable energy (IEA, 2023). Although Australia has reached relative decoupling during the past two decades, energy supply and production-based CO2 emissions have increased since 2000.
The per person production-based and demand-based (or footprint) greenhouse gas (GHG) emissions have started to decline since the mid-2000s. Due to its mining sector and use of fossil fuels, they remain well above the OECD averages. Since 2014, demand-based emissions are lower than production-based ones, meaning that Australia is a net exporter of GHG emissions embodied in final demand.
Energy industries are the largest source of GHG emissions, followed by transport and agriculture. The land use, land-use change and forestry (LULUCF) sector went from a net carbon emitter to a carbon sink since 2015, despite the wildfires of recent years.
Australia’s energy mix is largely dominated by fossil fuels. Although the share of coal, peat and oil shale in total energy supply declined from about 45% in 2000 to less than 30% in 2023, coal mining still dominates Australia’s energy production. Australia is the world’s second largest coal net exporter by volume and exports more than three-quarters of the country’s coal output.
Australia also produces and exports large volumes of natural gas, of which the proven reserves have grown significantly in recent years with the commercialisation of large volumes of unconventional gas (i.e. coal‑bed methane). Overall, around 80% of the country’s total energy production is exported (OECD, 2023[1]). The share of natural gas in total energy supply increased from less than 20% in 2000 to 27% in 2023, and that of oil from 32% to 35%.
The share of renewables in total energy supply is low, at 10% in 2023, and has not increased much since 2000. By contrast, the share of renewables in electricity production has increased rapidly, from 8% in 2000 to 34% in 2023. Most of the growth stems from solar photovoltaics (PV), as high state-level targets and power purchase agreements (PPAs) are driving the expansion of utility-scale renewables. At the household level, Australia has the highest penetration in the world, with one in three households having solar PV installations. Australia now aims for clean electricity sources to account for over 80% of its power mix by 2030 (IEA, 2023[2]).
Air emissions have been decoupled from economic activity but emission intensity remains high, driven by industrial and transport activities. Australia addresses national air quality issues through a coordinated effort between the Commonwealth government in cooperation with individual states and territories under the National Clean Air Agreement that was established in December 2015.
A National Environment Protection (Ambient Air Quality) Measure establishes national ambient air quality standards and a national framework for the monitoring and reporting of six common air pollutants to which most Australians are exposed: carbon monoxide (CO), ozone (O3), sulfur dioxide (SO2), nitrogen dioxide (NO2), lead and particles.
Population exposure to PM2.5 is above the 2021 guideline value of 5 µg/m3 recommended by the World Health Organization, but remains low by OECD standards. Regional differences are important, from 5.7 microgrammes/m3 in South Australia to 9.8 in the New South Wales.
Despite some variations, Australia's water stress level over the last 20 years remains low. However, this national estimate hides important sub-national variations both on a spatial and temporal basis. Total rainfall for Australia in the 2021-22 financial year was above average. Regionally, rainfall was above average for much of the eastern mainland states, pastoral South Australia and central Australia. Parts of south-eastern Queensland and north-eastern New South Wales recorded highest on record rainfalls. There were also areas that received below average rainfalls, notably northern parts of the Northern Territory, parts of the Queensland gulf country, parts of the Western Australian goldfields, south-eastern South Australia and western Tasmania.
Australia's abstraction intensity has remained reasonably constant over the past five years. In 2021-22, there was more rainfall than usual, which increased the availability of surface water. As a result, less groundwater was used in that year. Desalination plants also reduced their production for water supply services in the last two years, as more water was available from other sources. Desalination plants, however, still have an important role in Australia’s water management. They provide an alternative source of water that is not affected by climate variability.
Over 90% of the Australian population is connected to a wastewater treatment plant, of which more than half to advanced, tertiary treatment.
The rural residential population connected to the sewerage treatment is very small in Australia, and the data is not available.
The generation of municipal waste per person, at 497 kg/person/year in 2023, has declined in recent years and is now lower than the OECD average. Still almost of municipal waste is landfilled, while the share of recycling has decreased and the share of composting increased.
Per person domestic material consumption has decreased during 2000-08 and remained relatively stable since, at a level much higher than the OECD average. This is due to the coal and mining sectors, reflected in the material mix, with a share of metals much higher than other OECD countries.
Australia is one of the few countries with a material footprint lower than domestic material consumption. This is also explained by exports in the coal and mining sectors.
Australia’s biodiversity is both rich and unique; between 7 and 10 percent of all species on Earth occur in Australia. A report prepared for the Australian Biological Resources Study in 2009 estimated that 566 398 species exist in the country. Australia’s biodiversity has developed largely in isolation over many millions of years, making it one of the world’s megadiverse countries with a high level of endemism across a broad range of taxa. Australian biodiversity has been influenced by the range and diversity of environmental conditions in Australia, which are different from most other countries due to characteristics such as nutrient-poor soils, natural climatic variability, high fire frequencies and a generally flat topography.
Australia’s native vegetation is extraordinarily diverse, rich in species and complexity and has many unique physical features. Native vegetation is a vital component of the nation’s biodiversity with about 85% of Australia’s plant species endemic to the continent. Although Australia retains much of the estimated original extent of native vegetation cover, its condition is variable and masks an underlying issue in the decline of many ecological communities. Vegetation clearance has not been evenly spread across Australia and, consequently, some individual vegetation communities now occupy less than 1% of their original estimated extent and many others are highly fragmented. In some cases, the threats to the condition and extent of these and other native vegetation communities are ongoing (CBD, 2022[3]).
Australia has a very high percentage of land used for meadows and pastures, 43%. Forests represent only 17% of land used.
With about 22% of protected terrestrial areas, Australia is above the OECD average but below the 2030 GBF target of 30%. By contrast, the country has largely surpassed the GBF target of 30% for marine protected areas, a unique achievement in the OECD area.
This section shows selected policy instruments based on data available for most OECD countries and does not provide a complete overview of countries’ policy mix to achieve their environment-related objectives. Interpretation should consider the country specific context.
The share of environmentally-related tax revenues in GDP has declined alongside the OECD average. The sudden drop in 2022 is due to a temporary 50% cut in fuel excise from 30 March to 28 September 2022 to ease cost of living pressures associated with high international oil prices (OECD, 2023[1]).
The share of environmentally-related tax revenues in total revenues has also declined. Like most OECD countries, the energy and transport bases command almost all revenues, with the pollution tax base providing a tiny share.
In December 2022, the federal government announced that it would provide up to AUD 1.5 billion to enable energy price caps for the next 12 months. These caps are targeted at households receiving income support, pensioners, and small businesses. Prices are to be capped at AUD 12 per gigajoule on new wholesale gas sales and AUD 125 a tonne for coal used for electricity generation. This funding is contingent on the state and territory governments matching the federal funding, which means that a total of AUD 3 billion is available to maintain the price caps.
The federal government provided AUD 330 million from FY2020-21 to FY 2023-24 for natural gas exploration, production and infrastructure, and liquid fuel storage as part of its COVID-19 stimulus package. Several states have programmes that encourage hydrocarbon exploration. On the consumption side, most Australian states and territories provide rebates to low-income households, particularly on residential electricity usage, with the bulk of the electricity generated in the country of fossil-fuel origin. These were augmented by one-off energy subsidy payments as part of most states and territories’ COVID-19 responses (OECD, 2023[1]).
In total, 38.4% of GHG emissions in Australia were subject to a positive Net Effective Carbon Rate (ECR) in 2023. Explicit carbon prices in Australia consist of emissions trading system (ETS) permit prices, which cover 24.3% of GHG emissions in CO2 eq. Fuel excise taxes, an implicit form of carbon pricing, cover 14.3% of emissions in 2023. About 13% of GHG emissions have a Net ECR above EUR 60 per tonne of CO2 eq., a mid-range estimate of current carbon costs. Net Effective Carbon Rates are highest in the road transport sector, which accounts for 13.4% of the country's total GHG emissions. The Net ECR is on average zero in the agriculture and fisheries sector. The agriculture and fisheries sector accounts for 1.4% of GHG emissions (OECD, 2024[4]). .
The government and state-owned energy RD&D budget peaked in 2013 at AUD 1 124 million, but dropped thereafter before reaching AUD 460 million in 2021. By international comparison, public funding for energy RD&D accounted for 0.019% of gross domestic product (GDP) in 2020, half the IEA (International Energy Agency) average. This does not reflect Australia’s research and development tax incentive which is an important driver for innovation investment by the private sector (IEA, 2023[2]).
With a 2020-22 average of 10.2 environmentally-related inventions by national residents per million inhabitants, less than half of the OECD average, Australia is not a major player in environmentally-related patenting. The share of environmentally-related in total inventions has followed the OECD average, at 7.6% in 2022.
Australia’s development co-operation focuses on countries in the Indo-Pacific region. Australia’s total official development assistance (ODA) increased in 2023 to USD 3.3 billion (preliminary data), representing 0.19% of gross national income (GNI).
In 2022-23, Australia committed 45% of its total bilateral allocable ODA in support of the environment and the Rio Conventions up from 35.8% in 2020-21. The DAC average was 39%. Four per cent of screened bilateral allocable ODA focused on environmental issues as a principal objective, compared with the DAC average of 9.6%. Forty-five per cent of total bilateral allocable ODA focused on climate change overall, up from 34.4% in 2020-21 (the DAC average was 34.8%). Australia had a greater focus on adaptation (42.5%) than on mitigation (22.9%) in 2022-23. Four per cent of screened bilateral allocable ODA focused on biodiversity overall, down from 6.5% in 2020-21 (the DAC average was 7.6%). Australia committed USD 76.1 million in support of the conservation and sustainable use of the ocean in 2023, USD 14 million less than in 2022. The 2023 value is equivalent to 3.1% of Australia’s bilateral allocable ODA. (OECD, 2025[5]).
References
[3] CBD (2022), Country profiles: Australia, https://www.cbd.int/countries/profile?country=au.
[2] IEA (2023), Australia 2023 Energy Policy Review, OECD Publishing, Paris, https://doi.org/10.1787/ebff8fca-en.
[5] OECD (2025), Development Co-operation Profiles, OECD Publishing, Paris, https://www.oecd.org/en/publications/development-co-operation-profiles_04b376d7-en/australia_b4d74d53-en.html.
[4] OECD (2024), Pricing Greenhouse Gas Emissions 2024: Gearing Up to Bring Emissions Down, OECD Series on Carbon Pricing and Energy Taxation, OECD Publishing, Paris, https://doi.org/10.1787/b44c74e6-en.
[1] OECD (2023), OECD Inventory of Support Measures for Fossil Fuels: Country Notes, OECD Publishing, Paris, https://doi.org/10.1787/5a3efe65-en.
An understanding of the agricultural nitrogen balance is particularly important in the management of nutrient run-off into the Great Barrier Reef. See the Paddock to Reef Program as part of the Reef 2050 Water Quality Improvement Plan.
Fertilizer Australia (data to 2017).
National Water Account Urban Regions 2020 | Commonwealth Bureau of Meteorology, Water Account, Australia, 2018-19 financial year | Australian Bureau of Statistics
This recent paper provides guidance on the types of information sources required to calculate an agricultural nitrogen balance – this is for SW Western Australia cropping systems based on an historical database (2010-2015) - Harries et al., 2021.
The Australian national State of the Environment report 2021, https://soe.dcceew.gov.au/
Urban National Performance Report 2019-20 financial year | Commonwealth Bureau of Meteorology, Regional Water Information
OECD (2019), OECD Environmental Performance Reviews: Australia 2019, OECD Environmental Performance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9789264310452-en
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