2.1
This Chapter examines the key issues raised during the Committee’s inquiry and sets out the Committee’s views on the two Bills, concluding with a recommendation.
Objects and guiding principles
2.2
As set out in Chapter 1, Clause 3 of the substantive Bill establishes the objects of the Bill which seek to establish a framework to address the challenge of climate change.
2.3
Inquiry participants proposed amendments to the Clause. In particular:
that clause 3(1) be amended to recognise Australia’s global prosperity and security; and
that clause 3(2)(f) relating to ‘aligning government and the private sector in the assessment of climate risks’ be deleted on the basis that governments should not just assess risk but ‘be charged with acting to control and treat identified risks in policy making and program delivery.’
2.4
Others questioned whether the Bill’s objectives to ensure that emissions remain within the limits agreed under the Paris Agreement may ultimately be superseded. For example, AgZero2030 submitted that the proposed international trajectory may need to be reconsidered:
Global warming of just 1.1°C already has caused decades of increasingly severe economic, health, social and environmental climate change impacts, including to our industry and rural Australia. … compounding impacts over future decades and centuries of reaching 1.5°C are severe and the impacts of 2°C warming are unthinkable. Global warming is accelerating, and there is a chance of hitting 1.5°C global warming by 2030 and 2°C before mid-century.
2.5
Nuclear for Climate Australia submitted that:
Aspirations should not displace credible limits which are needed if the Act [Bill] is to be workable. Unfortunately the 1.5°C limit may have been passed for all credible purposes and if so it should be deleted.
Guiding principles
2.6
Part 1, Division 2 of the substantive Bill outlines the seven guiding principles that decision makers must have regard to in making decisions under the Bill.
2.7
There were several witnesses who supported the guiding principles including Responsible Investment Association Australasia (RIAA):
The guiding principles provided in Division 2 are well founded and when considered together, they provide a sound underpinning for informed and considered decision making. RIAA regards these as being helpful to guide current and future decision making around a transition to net zero emissions by 2050.
2.8
The principles were also supported by ClimateWorks, who suggested that:
The proposed Act would establish clear principles for action. These would ensure that plans would look across environmental, social and economic benefits and costs to optimise Australia’s benefit. This is highly important given that climate change has such widespread yet varied impacts that are expected to affect different people, places and industries in different ways.
2.9
Some inquiry stakeholders proposed amendments to strengthen these clauses.
Clause 10: principle of effective, efficient and equitable action
2.10
RIAA was of the view that subclause 10(c), which seeks to ensure equity for households, businesses, workers, communities, and rural and regional Australia in decision making under the Bill, could be improved. In particular, RIAA considered that in considering the term ‘equity’, decision-makers should be invited to ‘take a longer-term view of climate risk, their impacts and how decisions are made now.’
2.11
The Western Adelaide Coastal Residents' Association (WACRA) considered that the principle should also seek to incorporate ‘new economic models/theories that address climate change, such as sustainable development and ‘green new deal’ models...’.
Clause 11: Principle of informed decision making
2.12
Some inquiry contributors considered that subclause 11(2), listing bodies whose research and public reports should take precedence in making decisions under the Bill, should be broadened to include:
Australian Research Council; and
the Smart Energy Council, Climate Analytics, National Farmers Federation, Farmers for Climate Action, Beyond Zero Emissions, WWF-Australia, Australian Conservation Foundation, COSBOA [Council of Small Business Organisations Australia], Insurance Council, Investor Group on Climate Change, Australian Industry Group, Business Council of Australia, unions, banks, superannuation funds, and other business groups such as tourism operators.
2.13
Australian Industry Group (AiG) observed that subclause 11(2)(f) requires consideration of the research and public reports of the Energy Security Board. AiG advised that this Board has no direct legislative basis and may cease to exist if its operation is not extended by National Cabinet’s Energy Reform Committee.
2.14
There was concern about the omission of the Australian university sector from this list as it is an important source of information for climate policy development. Australian National University Climate Change Institute (ANUCCI) submitted that:
Australian Universities have much greater research capacity in climate adaptation, emission-reduction and climate change policy and publish many times more peer-reviewed studies in these domains than do either BoM or CSIRO. So the exclusion of Australian Universities is highly problematic from the point of view of the Guiding Principles, effectively breaching them in the same section of the legislation.
2.15
Nuclear for Climate Australia expressed concerns about the selective list within the subclause, submitting that ‘[s]elected organisations are nominated as taking precedence over all other sources of information. Such a concept is flawed and assumes a level of infallibility which cannot be contested’.
Clause 12: Principle of risk based, integrated decision making
2.16
Some inquiry participants stated that Clause 12 could be improved. In particular, it was suggested that subclause 12(a), which requires the assessment of competing long, medium and short-term environmental, economic and community consequences relating to climate change:
be clarified to mean that universal assets such as ‘infrastructure, the healthcare and education systems as well as the workforce’ require long-term investment as they benefit all sectors of the economy; and
be further refined to ensure that regionally differentiated information is provided to local communities to help assess risks and aid better local decisions.
Clause 14: Principle of fair employment transition
2.17
The concept of a planned, fair and equitable transition to a lower carbon intensive economy in Clause 14 is one of the key tenets of the substantive Bill and was widely supported by inquiry participants. The concept is also defined at subclause 3(1)(a). Subclause 14(c) requires the ‘prioritising [of] employment transition opportunities to new or existing industries within [affected] communities’.
2.18
The Business Council of Australia (BCA) submitted:
The proposed legislation recognises the importance of ensuring people and community impacts are considered in the low-carbon energy transition. A fair employment transition will create new jobs, drive economic diversification and encourage investments. It ensures environmental sustainability, but also the need to manage the economic and social impacts. The proposed legislation reinforces the need for a collaborative approach that brings together all impacted stakeholders to enable a planned and coordinated transition to net-zero emissions.
2.19
The Australian Council of Trade Unions (ACTU) was of the view that Clause 14 of the Bill could be strengthened through the addition:
of ‘workforce’ in addition to ‘community engagement’ in subclause 14(a);
of the words ‘and ensuring those new opportunities provide similar levels of employment security and conditions’ at the end of subclause 14(c); and
of a reference to ‘avoiding forced redundancies’ in subclause 14(f).
2.20
In considering the clause, the ACTU expressed the view that ‘skill acquisition, skill transferability and skill enhancement’ for those most impacted by the transition to a lower carbon intensive economy was important.
2.21
The Electrical Trades Union also proposed that a statutory oversight body, such as a ‘Just Transitions Authority’ be embedded within the Bill, a concept also supported by other inquiry participants. Citing recent closures of power stations in Australia where limited assistance was provided for affected workers, the Union submitted that such a body could avoid circumstances where:
… employers commit to pooled redundancy and worker transfer mechanisms and then simply ignore their obligations or instead [decide] to pick and choose which workers will receive support and which workers will not, with no independent oversight and no transparency.
2.22
Professor Rosemary Lyster of the University of Sydney Law School cited the European Union’s Just Transition Mechanism:
… which will ensure that the transition towards net zero occurs equitably ‘leaving no one behind’. At least €150 billion will be mobilised over the period 2021-2027 in the most affected regions, to alleviate the socio-economic impact of the transition. Australia’s pathway towards net zero must be accompanied by a Just Transition Mechanism which is deliberate, targeted and well financed.
Clause 15: Principle of community engagement and self determination
2.23
Community consultation is an important element of the Bills. Some submissions, like the Australian Industry Group, highlighted that:
Deep expertise, wide consultation and independent standing are thus important characteristics for advice on the status and future of Australian climate policy.
2.24
Contributors proposed amendments to Clause 15, including that the Clause should:
make specific reference to Indigenous peoples; and
include the principle of ‘free, prior and informed consent’ which is already used by business and government decision makers throughout legal, government and community endeavours.
Risk assessments and adaptation plans
2.25
Part 2 of the substantive Bill requires the Climate Change Commission (CCC), as discussed below, to prepare and provide to the Minister a national climate risk assessment. An initial assessment is to be made within one year of the commencement of the Act, and subsequent assessments ‘no later than five years after the day on which the previous assessment was made publicly available.’
2.26
Part 3 of the substantive Bill requires that the Minister prepare a national adaptation plan no later than one year from the publication of the corresponding national climate change risk assessment.
National climate change risk assessments
2.27
The Committee was interested in understanding the work that the Australian Government had undertaken to date to assess risks relating to climate change. While no one single national risk assessment document exists, the Department of Agriculture, Water and the Environment (DAWE) advised that ‘a number of risk assessments have been done over the years and some of those have focused on specific sectors’.
2.28
Many inquiry participants supported the implementation of a national risk assessment. Some of the outlined benefits of this approach include:
Allowing for forward planning, enabling identification of technology needs across industries, and helping industries adapt:
National risk assessments and national adaptation plans, as proposed in these Climate Change Bills, would lead to greater risk awareness and allow for comprehensive forward planning, to ensure more viable and adaptable future industries. It would also enable the identification of technological needs across industries. ATSE supports the implementation of routine risk assessment and adaptation plans nationally as well as by sector, to help identify climate change-driven economic challenges across all industries. As an example, most significant agricultural industries already have national adaptation.
Supporting actions that allows Australia to grasp significant opportunities:
However, Australia is far from understanding its systemic vulnerability to climate change on a coordinated scale. Such understanding would provide a sound basis for mitigation and adaptation plans, as well as support action that allows Australia to take advantage of the significant opportunities. This in turn reduces investment risk, and therefore increases investment opportunity.
Preparing the country for impacts:
The government should support the built environment by establishing a National Climate Change Risk Assessment Framework to help business and communities recognise and manage the risks they face. This will clarify what governments expect the biggest risks to be, the sectors of the economy and environment most impacted and what action is necessary to mitigate and adapt to the risks posed.
Facilitating private sector investment flows:
Australia is far from understanding its systemic vulnerability to Climate Change, determining adaptation pathways and timing of adaptation pathways and timing of adaptation actions required and the level of investment needed…IGCC believes that a crucial first step, supported by the proposed national Climate Change risk assessment process under the Bill, is an up-to-date national assessment of infrastructure at risk to the effect of Climate Change and an indicative quantification of the investment required into adaption, to facilitate private sector capital flows.
Since 2006, Local Government NSW has surveyed councils every three to five years on their responses to Climate Change. Similar to the approach of the Climate Change Bills, 82 per cent of New South Wales councils have already conducted a Climate Change risk assessment. A national Climate Change risk assessment is needed, as some vulnerabilities are best addressed through Commonwealth parliamentary levers, national coordination and assessing interdependencies between infrastructure owners and government systems.
2.29
The United Kingdom’s Climate Change Committee (UKCCC), supported a shorter timeframe for assessments (every three instead of five years), noting that the Climate Change Act 2008 (UK):
… allowed three years for the first assessment to be completed and our experience has shown that it takes approximately three years to conduct the assessments each time.
2.30
Clause 18 of the substantive Bill outlines the factors to be taken into account by the CCC in preparing its national climate change risk assessment.
2.31
Two inquiry contributors were of the view that Clause 18 could be strengthened through amending it to require that the CCC consults additional organisations including:
COSBOA [Council of Small Business Organisations Australia], Insurance Council, Investor Group on Climate Change, Australian Industry Group and BCA; and
Australian universities and collaborators.
2.32
More generally, some inquiry participants proposed that Clause 18 could be strengthened by:
including existing Commonwealth strategies, policies and proposals;
building on previous risk assessments (rather than starting from a blank sheet);
assessing the effectiveness of climate adaptation responses from the prior period so that this can be included in risk assessment;
considering the parameters in which the risk assessment is expressed (e.g., financial impact, social impact);
not being limited to factors associated with the direct consequences of climate change such as extreme weather, heat stress, changed growing conditions, health impacts; but being expanded to include risks such as the risk of export commodities or infrastructure becoming stranded assets, due to the climate commitments of Australia’s trading partners;
considering cumulative impacts such as multiple, overlapping climate events and interdependencies between systems;
requiring that the cost to Australia of climate-induced disasters, including economic and non-economic losses, be specifically reported on in the risk assessment over the previous year for the first assessment and five years for subsequent assessments; and
including an understanding of areas of disruptive risks as a result of a decarbonising economy, as well as an up-to-date national assessment of infrastructure at physical risk from the effects of climate change.
2.33
ANUCCI was supportive of the risk assessment process set out in Clauses 17 and 18, stating:
A climate risk assessment is a sensible thing to do and the 5-yearly frequency is consistent with what other nations have done (e.g. the US).
2.34
However, whilst broadly supporting the risk assessment process ANUCCI believed the risk assessment process:
… focus[ses] on the negative aspects of climate change and does not address the opportunities arising except where it is in relation to mitigation. The usual framing of risks is that it is not limited to negative outcomes … the IPCC [Intergovernmental Panel on Climate Change] have defined risk in terms of negative impacts and it may be best to run with that. To compensate for this truncated approach, it is important to be straightforward about the possibilities of some opportunities arising (e.g. increasing rainfall in the north-west with consequent increasing grazing profitability, or warmer temperatures increasing forest growth potential in Tasmania).
Sector-based risk assessments
2.35
Whilst a coordinated risk assessment process was supported by a number of submitters, certain inquiry participants considered that the input of various economic sectors should be a paramount consideration for the CCC. Geelong Sustainability considered that the contribution across economic sectors to Australia’s national emissions was not uniform, and it is important for individual sector emissions to be assessed and managed.
2.36
Specific economic sectors were highlighted to the Committee as making substantial contributions to Australia’s emissions. These included transport (estimated at 19% of national emissions), agriculture (estimated at 13% of national emissions), livestock (estimated at 11% of national emissions), and health (estimated at 7% of national emissions). According to emissions projections produced by the Department of Industry, Science, Energy and Resources (DISER), the electricity sector accounts for 33% of national emissions. A broad estimate was also provided that Australia’s built environment sector contributes up to 25% of all emissions.
2.37
Despite some high emissions sectors, the Committee was told that many sectors were working towards lowering their emissions and contributing to the broader emissions reduction effort, including superannuation, banking and financial services, fashion;; farming, social, health; property development; mining and energy.
2.38
The Planning Institute of Australia (PIA) emphasised to the Committee that planning could contribute to improving the emissions of other sectors, such as the built environment sector. The PIA submitted that:
… planners only have a broad appreciation of the contribution of their decisions towards achieving a net-zero target of 2050 for the built environment sector … [a national framework] could be a vehicle to set out the goals (and carbon budgets) for the built environment sector [providing] consistency around plan- and decision-making …
2.39
Doctors for the Environment cited the health sector’s work in the United Kingdom to reduce its emissions:
In the UK, the National Health Service (NHS) has committed to reaching net zero emissions for its carbon footprint by 2040, with an ambition for an interim 80% reduction by 2028-2032. The NHS achieved an 11% reduction in GHG emissions between 2007 and 2015 while the level of health care activity rose by 18%. By 2017, the associated financial savings associated with environmental sustainability (mainly energy, waste and water) rose to £90 million annually.
National adaptation plans
2.40
The Bill provides that the Minister must prepare a national adaptation plan in response to each climate change risk assessment, an issue which found broad support among inquiry stakeholders.
2.41
The Department of Agriculture, Water and the Environment (DAWE) was asked about how the Australian Government currently measures its progress on climate adaptation. The Department advised the Committee that:
... we don't currently have a set of measures or targets that try to roll that up into outcomes, and we are not currently measuring progress towards adaptation outcomes. Now, as you know, we are about to go through a process of developing a new National Climate Adaptation and Resilience Strategy. We will do that in consultation with states and territories and with a range of other stakeholders. It may be that through that process we will develop a set of outcomes as part of that.
2.42
UniSuper expressed one view as to why adaptation plans were required under the Bill:
Australia needs to develop a more comprehensive understanding of its systemic vulnerability to climate change, determining adaptation pathways and timing of adaptation actions required and the level of investment needed.
2.43
The Property Council of Australia also supported the development of national adaptation plans on the basis that the current lack of a national policy framework and actions to mitigate the effects of climate change will have and has already had consequences.
2.44
In considering these clauses, inquiry stakeholders could see the benefits of having a clear national adaptation framework because it would:
provide clarity and focus across governments; and
set national direction, establish priorities and coordinate effective action.
2.45
Some inquiry stakeholders considered amendments to this clause to clarify its intention including that:
clause 19(3) require the adaptation plan to outline how the guiding principles of the substantive Bill are reflected;
the adaptation plan be evidence-based and derived from the best available science;
it should oblige Commonwealth agencies to prepare adaptation plans to reveal potential vulnerabilities and to help inform the national plan; and
the broad and non-specific wording of the clause may not address all sectors of the economy.
2.46
The UKCCC submitted that from its own experience with its similar legislation:
Measuring progress in adapting to climate change is inherently challenging due to the future uncertainty over the amount of climate change we will experience and the effectiveness of different adaptation options in managing these risks. Different parts of the UK will experience different climate impacts and require different adaptation options. The lack of available quantitative data is a real challenge.
2.47
According to the UKCCC, it had sought to address the challenge of assessing the progress of adaptation measures by implementing:
a framework of scoring the quality of plans and whether actions are being taken that demonstrably reduce either vulnerability or exposure to current and future climate change; and
measurements for changes in vulnerability, exposure and adaptation action across different sectors, and for which ‘new indicators of attributed impacts as context for the overall assessment of progress are being developed.’
2.48
The ACT Climate Change Commission proposed that the Bill could require the establishment of:
… a dedicated National Adaptation Centre … The Centre could conduct research in its own right, but its primary value would be as an interface between different sectors (research, business, community and policy), both as a repository of knowledge and learning, and to provide capacity building.
2.49
In its 2021/22 Budget, the Australian Government established the Australian Climate Service (ACS). The ACS will connect and leverage the Commonwealth’s extensive climate and natural hazard information into a single national view. The service will work with customers to provide data and intelligence to support each phase of the national disaster continuum: Prevention, Preparedness, Response, Recovery, Relief and Resilience.
An emissions reduction target and emissions budgets
2.50
The aspect of the substantive Bill on which much of the evidence to the inquiry focussed, was the establishment, under Clause 22, of a target of 31 December 2050 for Australia to reach net zero emissions. The Bill also provides that the Minister may determine an earlier target date, and for the CCC to review and, if required, recommend to the Minister that the target be amended. Part 5, Division 1 of the Bill also requires that the Minister set an emissions budget in advance for the emissions budget periods stipulated in the Bill.
2.51
The inquiry’s evidence pointed to a desire, by some individuals, community groups and institutional stakeholders for a target to be set and achieved—including a substantial number of submissions generated by advocacy campaigns expressing support for the Bill. In commenting on the rationale for this interest, participants provided varying views to the Committee. The BCA, for example, submitted:
We believe the central issue now is setting a national target of net-zero emissions by 2050 and, critically, outlining a pathway to achieve this goal. The high-level policy framework outlined in the proposed legislation represents an important starting point for the development of a clearly defined, nationally guided and coordinated climate policy response.
2.52
A number of stakeholders expressed concerns about the impacts a legislated target may have on private sector abatement, the duplication of existing efforts, unclear accountability mechanisms, and limitations of abatement ambition.
2.53
Some key themes emerged from the evidence about the benefits of setting a target. These were that a legislated target for Australia to reach net zero emissions by 2050 would:
be consistent with the work of the IPCC and broad international scientific consensus;
provide policy certainty;
improve investor confidence and certainty for business;
align with the same commitment made by many of Australia’s international trading partners such as New Zealand, the United Kingdom, Japan and South Korea;
align with the same commitment made by many international and domestic corporations; and
result in improved health outcomes for all Australians.
2.54
Some, like the Australian Medical Association, supported the Bills on health grounds:
Climate change is a health issue and one which poses an emergency for the Australian community. Just as Australia has responded well so far to COVID-19 by relying on scientific evidence, it must do the same in responding to the health emergency that climate change poses.
2.55
Renny Bradtke submitted that:
Legislating Net Zero by 2050 is an invaluable way that Australia can become a world leader in combatting climate change. A streamlined approach based on equitable principles will benefit all communities and allow all Australians on a business and individual level to work towards a common goal.
2.56
Citizens’ Climate Lobby Australia expressed the view that:
Goals and targets are powerful motivators and help focus and concentrate the efforts of all actors and stakeholders. They enable greater cooperation and an important sense of working together for a national good. And where leaders in government, business and community share the same goal it creates a sense of national purpose. The legislated target in this Bill will give direction for all sectors of the economy and society to invest, create and work towards.
2.57
The Australian Conservation Foundation submitted that:
The economic opportunity for Australia to reach net zero emissions for our own economy and to assist other countries through clean exports is substantial. Australia stands to gain jobs, strengthen economic growth and long-term export opportunities if these opportunities are unlocked through a national legislated climate action framework.
2.58
Some were of the view that the target should be brought forward to 2040 or even earlier. The ACT Climate Change Council submitted that:
… it is important to note that it is unlikely that global warming can be held to 1.5°C (with very little to no overshoot) if all nations adopt a net zero target date as late as 2050, particularly if all greenhouse gases are not substantially reduced in the next decade.
2.59
The Climate Council advised that ‘… science already compels a strengthening of this target …’ and recommended that the date for net zero emissions initially be set for 2040, with an interim target of reducing emissions by 50% by 2030.’
2.60
On the other hand, the National Farmers Federation advised the Committee that it did not agree with a net zero by 2050 target being set on the basis that:
… simply legislating a target is not a pathway to meaningful action on climate change. Despite a lack of policy certainty in the past 10 years, significant action has been taken by the private sector and industry. While there is a role for overarching legislation, any legislation (and regulation) must be economically sensible, unobtrusive, equitable and advantageous to deliver on ground programs that benefit agricultural interests and do not provide unnecessary regulatory impediment.
Reviewing and amending the target
2.61
The substantive Bill includes provisions for the target to be reviewed and amended. In particular, the Minister may determine an earlier day than 31 December 2050, and the Commission must review the target when setting an emissions budget at the request of the Minister.
2.62
The Law Council of Australia expressed its concern that allowing the Minister to determine a new target date under clause 22(2):
… may have the potential to undermine the value of setting a target day in the first place, resulting in substantial ongoing lobbying to bring it forward. As such, it may reduce certainty and transparency about how when or how this will occur, with business and policymakers being required to factor in the consequential risks into their decision-making. One option may be to amend the Bill to only enable the target day to only be amended by legislation, rather than by legislative instrument.
2.63
The Law Council noted that the provision allows the Executive to:
… retain some level of control over whether the Target of net zero emissions will be met earlier and how, meaning that flexibility is retained in addressing any resulting social, economic and environmental issues and concerns. It is also a matter for Parliament to decide how best to strike the balance between achieving sufficient certainty and affording flexibility.
2.64
The Smart Energy Council was of the view that should a more ambitious target be determined by the Minister, emissions budget periods (see below) should be adjusted, and reviews of the target conducted commensurate with updated emissions budget periods. For example, a target of net zero by 2040 could mandate a review of the target every three years.
Adequacy of Australia’s current targets
2.65
In considering the work that Australia is currently undertaking to meet its international obligations and domestic commitments, in the absence of a legislated net zero emissions by 2050 target, a number of concerns were raised. First was Australia’s emissions reduction ambition from now until 2030, and second, the lack of an Australian emissions reduction target beyond 2030.
Emissions reduction to 2030
2.66
Chapter 1 of this report broadly outlined Australia’s international and domestic climate change commitments under the Paris Agreement and cited Australia’s current emissions target of a 26% to 28% reduction in emissions below 2005 levels by 2030.
2.67
DISER submitted that according to its latest Emissions Projections Report produced in 2020:
Australia is on track to overachieve on its 2030 target by 403 Mt CO2-e, including overachievement from previous commitment periods; and needs to reduce an additional 56 Mt CO2-e (26% target) to 123 Mt CO2-e (28% target) by 2030 to meet its Paris target when overachievement from previous commitment periods is excluded.
2.68
Presenting a comparative table to the Committee entitled Change in emissions and renewable energy comparators for selected countries, DISER gave evidence that since ‘… 2005, Australia has seen declines in absolute emissions, emissions per capita, and emissions per unit of GDP.’
2.69
DISER further described the evidence before the Committee advising that:
… the change in per capita emissions from 2005 to 2018, on a per capita basis our emissions actually decreased by minus 29 per cent. That is actually one of the highest in the world …
The other thing that we reported here was change in emissions per unit of GDP. That is minus 51 per cent from 2005 to 2018—again, one of the highest reductions globally. This goes to both the fact that we have increase in population but also the structure of our economy, the sort of exports that we have as an energy and resource producer. It is actually very significant in terms of the emissions per unit of GDP as well.
2.70
Some inquiry submitters held different views. The Institute for Energy Economics and Financial Analysis (IEEFA), while not disputing the statistical accuracy of DISER’s evidence, put to the Committee that the Department was:
… presenting what we would consider to be a false narrative that Australia as making strong progress on green house gas (GHG) emissions reductions relative to leading countries. The Department choose to cite the per capita reduction from 2005-2018, knowing the 2005 was one of the five highest recordings in Australian recorded history. If the Department had chosen 2000 as the base year, there would be no material improvement in our national GHG emissions in the last two decades …
2.71
It is noted that that this view was not put to the Department for its response in hearings or in questions on notice.
2.72
The Australia Institute further analysed the data in the Department’s table, noting it was statistically correct, while advising the Committee that:
The fourth column, titled “New renewable energy capacity installed per person 2019 (watts)”, appears to draw exclusively from the International Renewable Energy Agency (IRENA) Renewable energy [statistics] 2020 report. DISER seems to extract 2018-2019 data of nine countries and three supranational organisations, to calculate the per-capita change in renewable energy capacity over the year. While the statistic itself is calculated correctly, it misrepresents IRENA’s data.
2.73
It is noted that that this view was not put to the Department for its response in hearings or in questions on notice.
Emissions reduction beyond 2030 and towards 2050
2.74
DISER advised the Committee that it has modelled emissions reduction projections consistent with the Government’s reporting obligations under international agreements, and that it regularly advises Ministers on IPCC reports about net zero projections. The Department provided evidence that it is undertaking ongoing work on long term emissions projections and will provide advice to Government on how long term emissions reductions can be met as part of the forthcoming long term emissions reduction strategy.
2.75
Although the Paris Agreement does not require a 2050 target and does not require a 2035 target until 2025, submitters to the inquiry expressed concerns about the lack of a Commonwealth emissions reduction target beyond 2030. The Clean Energy Council commented that:
The current reluctance of the Australian Government to establish a goal beyond 2030 leaves a lot of guesswork for investors about the likely market dynamics and investment conditions for their assets, increasing the risk premiums applied to Australian projects.
2.76
The Centre for Policy Development submitted that:
What has been missing to date is a ‘north star’ to guide these efforts, and a mechanism for coordinating responses across the many institutions with key roles to play. This is widely recognised by leaders and stakeholders across the public and private sectors.
2.77
Submitters to the inquiry noted that all Australian states and territories had already made commitments to reach net zero emissions by 2050. The Australian Government has also committed to achieving net zero emissions as soon as possible, and preferably by 2050.
2021 United Nations Framework Convention on Climate Change Climate Summit (COP 26)
2.78
As stated in Chapter 1, Australia is due to participate in the 2021 United Nations Framework Convention on Climate Change Climate Summit (COP 26) conference in December 2021. DISER advised that:
… the government has also committed to producing a long-term emissions reduction strategy and to have that out well ahead of COP26, which will be in Glasgow in November this year. The analysis and work is ongoing in the department, and that will absolutely provide advice to the government and therefore support a long-term emissions reduction strategy.
2.79
The Centre for Policy Development considered what Australia’s attendance at COP 26 might require in terms of making future emissions reductions commitments, concluding that:
Australia will need to take concerted and ambitious action to ensure the competitive position of Australian firms and industry in a greening global economy, embrace opportunities inherent in the transition, and prepare for climate related risks transmitted to Australia through trade and capital markets. … a successful global response will reduce the physical and economic risks of rising temperatures, but also increase the risk that significant Australian industries are left stranded.
Emissions budgets
2.80
In order to meet the proposed 2050 target, Part 5, Division 1 of the Bill requires that the Minister set emissions budgets for a prescribed emissions budget period. Importantly, the Minister must ensure that the net emissions for an emissions budget period do not exceed the emissions budget for the corresponding period.
2.81
In developing Australia’s emissions reduction target to 2030, DISER advised that an emissions budget was calculated for the periods to 2020 and 2030. For the latter period, DISER submitted to the Committee that:
Australia considers its 2030 emissions budget as a ten year commitment from 2021 to 2030. The emissions budget is calculated by taking a straight line from 2020 to 2030, beginning from the 2020 target of 5 per cent below 2000 levels and finishing at 26 per cent and 28 per cent below 2005 levels in 2030. Australia’s progress is assessed as the difference in cumulative emissions between projected emissions and the emissions budget from 2021– 2030.
2.82
Inquiry contributors were supportive of setting emissions budgets as part of the path to reaching net zero emissions. The UKCCC advised that:
The use of emissions budgets … to provide stepping stones to the long-term target will help to ensure that near-term actions are taken that are consistent with the long-term goal. With decade or longer lifetimes of our vehicles, heating and cooling systems, and multi-decade lifetimes of our infrastructures, the pathway to Net Zero must lay the groundwork now to enable a cost effective and well-managed transition.
2.83
WWF-Australia commented on the importance of emissions budgets:
… to drive ambition, innovation and be guided by the best available and current science. The science clearly states that what we do in the next decade will be ‘critical’ to whether we can keep the worse effects of climate change averted. Setting regular 5 yearly budgets will help to keep us on track, to ensure we are being ambitious enough given the urgency of the climate emergency we are facing.
2.84
Other participants like RIAA proposed that the five yearly emissions budgets proposed by the Bill are ‘functionally in line with how New Zealand and other trading parties [sic] are managing their respective Emissions Budgets’ and having two consecutive budgets would help with improving ‘business planning, valuations and capital allocations’.
2.85
The Centre for Policy Development also found that the Bills’ five yearly budgets, rather than ten yearly, would:
…give the Australian people a regular independent appraisal of the carbon budget. If enacted in 2022, the proposed 5-year cycle of risk assessments and budgets fits well with the 5-year UNFCCC cycle of global ratcheting under the Paris Agreement, and ensures review cycles can take account of key global developments.
2.86
Business Council for Sustainable Development Australia highlighted the benefits of emissions budgets to business which would include:
providing a strong emissions constraint within which there could be flexibility for policy settings to accommodate other priorities, such as industry growth and cost management;
helping businesses innovate in products and services that are likely to become increasingly valuable by creating clear indicators of what would be needed; and
when creating forward visibility of Australia’s decarbonisation implications and needs, improving the opportunity for preparation.
2.87
On the other hand, the Australian Industry Greenhouse Network argued that the Australian Government already seeks a large volume of reported data on emissions from the private and public sectors. As such, rather than implementing emissions budgets, it was of the view that:
A greater level of clarity regarding existing policies and measures is preferable to creating additional legislation. The Government produces an expansive data set on emissions, which reflects emissions reductions achieved through existing policies as well as voluntary activity.
These (and other) reporting tools cover what could be called emissions budgets, capturing a significant amount of information. It would be impractical to replace these mechanisms, however there may be value in making this information accessible in an aggregated format.
Setting emissions budgets
2.88
With the exception of the first budget period after the commencement of the Act, an emissions budget for each five year budget period is to be set five years in advance as per the dates set out in the Bill.
2.89
The Smart Energy Council considered that a shorter period for each emissions budget was necessary to enable more ambitious action to be considered within each period. Contrastingly, Origin Energy Limited proposed that ‘a period longer than 5 years be considered, to align with normal financing horizons.’
2.90
AiG submitted that the emissions budget periods specified in the Bill would need to be reconfigured as:
These timelines no longer seem achievable given the Bills are now being considered at the end of 2020. Setup of the Commission and initial advice by February 2021 does not seem possible with adequate time for preparation and consultation. A solution would be to introduce a relative timeline, for example "within 6 months of the commencement of this Act" or similar.
2.91
Inquiry contributors proposed a number of amendments to strengthen Clauses 26 to 29 dealing with how emissions budgets are set, including:
a clause addressing the need for transparent and robust mechanisms for reporting on carbon budgets, closely aligned with relevant IPCC guidelines; and
a clause specifying that the emissions budgets must be consistent with progressively tracking towards the Target.
2.92
Clause 28 lists fourteen matters to which the CCC and Minister must have regard when determining how the emissions budget and the net zero target may be met. Inquiry contributors submitted amendments to improve the interpretation of this list, including:
in subclause 28(2)(a)(ii), considering ‘opportunities’ as well as risks and uncertainties associated with the reduction of emissions and removal of greenhouse gasses;
deleting subclause 28(2)(b)(iv), to remove the requirement that that budgets be ambitious on the basis that emissions budgets should be based on analysis of effectiveness, efficiency and fairness;
in subclause 28(2)(b)(x), adding to the subclause requiring consideration of the ‘likely impact on employers and workers’ by adding the words ‘and their communities and the adequacy of transition support measures’; and
in subclause 28(2)(b)(xi), in considering the ‘likely impact on taxation’, the phrase should also refer to ‘get[ing] revenue from big polluters (rather than the general public)’ and taxation ‘to reduce resource and energy demand’.
Emissions reduction plans
2.93
The Bill sets out the requirements for emissions reduction plans that the Minister must prepare, setting out the policies and strategies for meeting each emissions budget.
2.94
Various submissions highlighted the benefits of emissions reduction plans, including the Australasian Centre for Corporate Responsibility (ACCR), who found:
In order to contribute Australia’s fair share to global carbon pollution reduction, short-term and detailed planning are needed in addition to a long-term, net-zero horizon. This need is addressed in the bills’ inclusion of five-year carbon budgets (in other words, hard limits on carbon pollution) and five-year plans to guide the mandated carbon pollution cuts.
2.95
RIAA considered that Clause 30(4)(a), which requires the Minister to obtain and consider the advice of state and territory ministers with responsibility for climate change or emissions reduction, could be strengthened if the Minister (or alternatively, the CCC) were to seek advice from a broader group of stakeholders including regulators and financial services businesses:
… that are both large investors in and lenders to the business and household sectors of Australia and whose investments made on behalf of beneficiaries shall be materially impacted by the emissions budgets set.
2.96
Clause 30(3)(a) of the Bill stipulates that an emissions reduction plan must include ‘sector-specific policies to reduce emissions and increase removals of greenhouse gases’. In regard to this clause, the Smart Energy Council submitted that sectorally-based plans are ‘vital in all sectors including energy, transport, agriculture, industry and buildings’.
2.97
The Australian Academy of Technology and Engineering (ATSE) noted that:
A multi-sectoral approach is important to ensure responsibility is shared, rather than focused on, or avoided by, any particular sector. The approach proposed in the Bills will also assist in standardising emissions inventory methodologies across sectors, which are variable at present.
A multi-sectoral approach will further enable the development of sub-sectoral targets, which will be helpful in ensuring national engagement. For example, within agriculture, the profile of emissions varies (CH2, N2O, CO2) and a sub-sectoral approach would encourage the development of appropriate technologies for each of these profiles.
Monitoring, reporting and accountability
An independent Climate Change Commission (CCC)
2.98
The substantive Bill establishes a CCC which has a range of functions relating to the advice and preparation of emissions budgets, emissions reduction plans, national climate change risk assessments, national adaptation plans and low emissions technology statements. The key object of the Consequential and Transitional Provisions Bill (see below) would be to abolish the Australian Government’s CCA, replacing it with the CCC.
2.99
The concept of an independent CCC found support from a number of inquiry participants, and many pointed out that the proposal shares commonalities with a similar model operating in the United Kingdom.
2.100
Submitters told the Committee about the benefits they believed that a CCC could bring Australia. The UKCCC, in its submission to the inquiry, advised that:
The creation of an independent Climate Change Commission (Part 6) will help to ensure that the 2050 target, emissions budgets, climate risk assessments as well as the policy to meet and respond to them are evidence-based. The monitoring requirement on the Commission ensures that the Government can be held to account on delivering progress towards the targets agreed by Parliament and that unforeseen circumstances can be responded to. Our experience is that clear independence, an evidence-led approach, and proper resourcing, sufficient to have internal specialist analytical capability, is key to fulfilling our advisory and monitoring roles effectively.
2.101
Planners Declare was of the view that:
Comprising experts and policy professionals from all sectors, such a body will provide integrity to the uptake of science and further advance the link between environmental and scientific inquiry to planning and construction legislation. The IAC [independent Climate Change Commission] will assist the de-politicisation of climate change, propelling commitment to science-led and evidence-based advancements in industry-specific outputs and ensuring accountability in all sectors.
2.102
The Centre for Policy Development was also enthusiastic about the proposal to establish a CCC, submitting to the Committee that:
This is a critically important function for an issue that will play out over decades. If a net zero commitment is the ‘north star’ upon which action can accelerate, then the regular carbon budgets and risk assessments would provide a clear compass for planning and decision making across government. Despite ambitious targets, it can be difficult for regulators, state governments, businesses, and the courts to know if climate mitigation action is ‘enough’. The proposed Commission fills this gap with a quantitative carbon accounting framework.
2.103
Other stakeholders suggested that there are alternative approaches to the proposed CCC. For example, AiG suggested the Australian Government could encapsulate long term goals in authoritative policy statements, extending the current cycle of emissions reporting, or alternatively bolster the role of the existing CCA in providing such advice.
2.104
Inquiry stakeholders considered the impact of the Bill, particularly on the role and operation of the CCA. The CCA itself confirmed that:
The Bills as presented would have the effect of ceasing the operations of the Climate Change Authority, through repeal of the Climate Change Act, and replacing it with a new Climate Change Commission.
2.105
The Committee considered the status of the CCA’s current work program and was advised by Mr Brad Archer, Chief Executive Officer of the CCA that in the past two years, the agency had not been requested by the Minister to undertake any statutory reviews under its mandate, but had conducted a review of the ERF and two self-initiated research reports over that time period. In 2021, the agency would undertake a review into ‘trade investment opportunities in a low-emissions world’.
2.106
Supporting the retention of the CCA, AiG was of the view that:
Independent advice could be provided by the existing Climate Change Authority, potentially with amendments to its legislation along the lines of the Bills. The CCA has produced high quality advice and assessment with consistently wide and deep consultation. On the other hand, recent governments have preferred more internal Departmental processes or temporary special-purpose reviews, rather than drawing on the CCA. Bolstering and re-centreing [sic] the CCA, potentially with a requirement similar to the Bills’ for a Ministerial response, could be an alternative to the new body envisaged in the Bills.
2.107
The National Farmers Federation was concerned that the proposed CCC would not be suitable in the Australian context:
While the framework may have worked in the UK, its applicability in the Australian context is questionable, and some elements of the Bill are undesirable and lacking pragmatism. Notably, Australian climate policy has not enjoyed policy bipartisanship which has underpinned success in the UK. Australian industry is also significantly export-exposed, including agriculture, and broader geographic challenges warrant further consideration of the details of the current Bill.
Appointment and membership of CCC
2.108
Clause 37(1) of the Bill provides that the Minister appoints each member of the CCC (except the Chief Scientist) by written instrument. Some submitters held concerns about this manner of appointment. For example, Greenpeace Australia Pacific submitted that:
We consider that ministerial discretion in issues such as this, that affect company investment plans, can lead to incentives for undue influence on future Ministers. With that in mind, the selection of members of the Commission needs to be carried out by a panel of judicial officers, or professors with relevant expertise in climatology, law, economics and ecology. There should also be heavy restrictions on the Minister’s power to remove members.
2.109
Clause 37(2) stipulates the experience and knowledge that the Minister should consider when appointing members to the CCC. Some submitters, whilst supportive of the CCC established by the Bills, proposed that in addition to the qualifications listed in the Clause, the CCC’s membership should be more diverse, inclusive of persons representing or with knowledge of:
biodiversity and the environment;
mitigation or emissions reduction science;
international climate law; and
2.110
Concerns were expressed by some submitters that steps needed to be taken to ensure that members of the CCC declared potential conflicts of interest, particularly past or present links to or employment in fossil fuels-related industries.
2.111
ANUCCI also considered that the length of appointments for CCC members of up to ten years may be too long, stating that:
It is normal for such roles to be shorter than 10 years to allow for evolution of the committee and to limit possibilities for stacking and gridlocking. For example, terms of 2 to 3 years with an option for a single extension are regularly seen in such institutions.
Parliamentary Joint Committee on Climate Adaptation and Mitigation (PJCCAM)
2.112
Clause 48 of the Bill appoints a new Parliamentary Joint Committee on Climate Adaptation and Mitigation (PJCCAM), with functions relating to the CCC as set out in Clause 50, including approval of its members.
2.113
Some submissions were supportive of this arrangement. For example ClimateWorks submitted:
The creation of an independent climate change commission, requirements for the skills needed on the commission and a cross-party approach to approval of commissioners would create confidence and trust in the nature of the advice to Government.
2.114
WWF-Australia considered the benefits that arose from the establishment of other parliamentary joint committees:
The examples provided by parliamentary committees with oversight of Commonwealth statutory bodies like the Joint Committee of Public Accounts and Audit, the Joint Committee on the Australian Commission for Law Enforcement Integrity and the Parliamentary Joint Committee on Intelligence and Security demonstrate the importance and value of parliamentary oversight to:
prevent the risks of political interference or insufficient action; and
achieve better, well integrated and more timely outcomes.
2.115
The National Farmers Federation did not support the creation of the new PJCCAM on the basis that:
... the relevant Minister should retain responsibility for ministerial appointments, administrative functioning and expenses, and should not cede responsibility of such functions to a Joint Parliamentary Committee. For example, the Federal Cabinet is responsible for the appointment of High Court judges, and not referred to Parliament itself — there is no rationale for the proposal and there does not appear to be an Australian precedent for this Act. Decision-making should be consistent with policy priorities of elected Governments and appears to be precedential in the Australian parliamentary system. Checks and balances are already in place through existing review mechanisms (Senate estimates) and elections.
Climate risk reporting by Commonwealth entities
2.116
In addition to facilitating the replacement of the CCA by the CCC, the Consequential and Transitional Provisions Bill would amend the Public Governance Performance and Accountability Act 2013 (PGPA Act) to insert a provision (a new subsection 19A) requiring that the accountable authorities of Commonwealth entities must consider and report on climate change risks when performing their duties or exercising their powers.
2.117
The Law Council of Australia expressed concern that this amendment may have a disproportionate impact across the Commonwealth:
… a broad range of people and entities is captured by the definitions for ‘accountable authority’ and ‘Commonwealth entity’ under the Accountability Act. This means that the obligation proposed by the new section 19A will be expansive in application. For example, it will extend to the Director of the Australian Institute of Criminology when performing his or her functions relating to the conduct and publication of criminological research in Australia, and to the Clerk of the Senate when performing his or her administrative functions for the Department of the Senate.
2.118
As an alternative, the Law Council proposed that:
… the Committee may wish to consider narrowing the categories of people and entities to whom the new section 19A applies. Reference may be had to the Climate Change Act 2017 (Vic) (Victorian Act), in which the equivalent obligation to the obligation proposed by section 22 of the Consequential Bill is limited, and applies only to specific decisions or actions made under a list of six Acts. These Acts all provide for functions which have clear relevance to the objects of environmental or land management and/or protection and, by extension, climate change-related risk or impacts.
2.119
An alternative proposed by the Law Council, should the Bills pass the Parliament, was that:
… the proposed Climate Change Commission could provide education and training to applicable Commonwealth entities and their accountable authorities. This would promote proper understanding and meaningful application of the duty, noting that it will, however, come with its own administrative burden and cost.
Fossil fuel export emissions
2.120
Clause 25 of the substantive Bill requires that the proposed CCC must report to the Minister on the effect of Australia’s fossil fuel export emissions in meeting the objects of the Bill before the one year anniversary of the commencement of this Act; and at the end of each two year period after that anniversary.
2.121
The ACTU submitted that this requirement could be problematic, advising that:
Requiring the reporting of end-use emissions in other countries from exports may be problematic for 2 reasons: 1) it is beyond what is required under the Paris Agreement and potentially leads to double counting of emissions in Australia and internationally, and 2) it assumes emissions from combustion internationally are known and accounted for by Australian regulators, which is unlikely to be the case.
Low emissions technology statement
2.122
Clause 70 of the substantive Bill requires that the CCC prepare and provide the Minister with an annual report which must include a ‘low emissions technology statement’. That statement is to incorporate a summary of progress towards the Commonwealth’s defined technology goals; an update of global technological developments; and reviews of the investment portfolios and performance of two relevant Australian Government entities, the Clean Energy Finance Corporation and the Australian Renewable Energy Agency.
2.123
Inquiry contributors were supportive of this requirement, noting that an annual low emissions technology statement is already a subset of the Australian Government’s existing Technology Investment Roadmap policy framework. The Government has committed to table these annual statements in Parliament. Ms Zali Steggall, Federal Member for Warringah and sponsor of the Bills, noted in her submission to the inquiry that the statement:
… will provide feedback to the public on progress towards developing these technologies. These statements will be part of the Commission’s reporting requirements which also includes … progress targets and adaptation plan implementation.
2.124
A number of submitters pointed to the benefits that a low emissions technology statement could deliver. Verdia Pty Ltd submitted to the Committee that:
The assessment would help publicise existing and potential technologies that can help reduce emissions, as well as demonstrate the economics of substituting low-emission for high emission technologies.
2.125
The Smart Energy Council was of the view that assessments via the statement could unlock Australia’s:
… enormous potential to generate substantial levels of renewable energy and develop into an energy exporting superpower and any means by which to fast track multi-GW scale renewables plants … with capacity to export electricity must be considered.
2.126
ATSE submitted to the Committee that while it supports the use of routine technology readiness assessments:
… the integration of the measures detailed by the Bill with the Australian Government’s National Technology Roadmap for Low Emissions Technologies will not constitute a sufficient technology readiness assessment. Australia is far from technology ready, as our national emissions performance demonstrates, but we have an excellent opportunity to use regular technology assessments to assess the areas of greatest need and opportunity. This should be a co-ordinated, multi-sectoral and national approach, much broader than the five areas nominated by the National Technology Roadmap.
Committee comment
Object and guiding principles
2.127
The Committee supports clause 3(1) of the substantive Bill, recognising that a changing climate presents a significant challenge to Australia, and agrees that there is a need for Australia to adapt to meet its international commitments and for the benefit of its people, environment and economy.
2.128
The Committee notes commentary from certain inquiry stakeholders that the international consensus to limit global warming to well below 2°C and pursuing a limit of 1.5°C above pre-industrial levels may already or soon be superseded. In the Committee’s view, Australia should continue to support, contribute to and work towards internationally agreed goals and meet its own commitments to limit global greenhouse gases. Only a global solution will be effective in limiting global warming. All countries have a role to play and Australia should continue to play its part by supporting and working towards internationally agreed goals.
2.129
The Committee believes that the guiding principles in the Bill express some key concepts that could usefully be taken into account in future Australian Government climate change policy.
2.130
Clause 11(2) lists a number of Australian Government agencies which produce research and reports that are to guide decisions made under the Bill. The Committee considers that the work and efforts of a broad range of experts and stakeholders, including the non-government and academic sectors, should also be considered in framing climate change-related decisions and policy in Australia. This is an important principle that should form part of the basis for any Australian Government climate policy.
2.131
Clause 14 outlines the principle of fair employment transition. The Committee notes that many submissions highlighted the importance of considering the impact on industries and workers of transitioning to a less carbon-intensive economy. This is an important principle that should form part of the basis for any Australian Government climate policy.
Risk assessments and adaptation plans
2.132
The Committee welcomes the Australian Government’s commitment to a new adaptation strategy and the development of a long term emissions reduction strategy. The Committee considers that the Australian Government should develop a clear climate change risk framework that is updated on a regular basis to ensure that stakeholders are informed of, and can mitigate, relevant risks. The framework should be inclusive of the work already being undertaken by the Commonwealth and states and territories. Key principles such as those espoused in the substantive Bill at Clause 18 should form part of the Commonwealth’s risk assessment.
2.133
The Committee is pleased to note that some sectors are alive to the risks posed by climate change and have planned or are considering mitigation frameworks. The level of climate risk—that is, the degree to which the world emits emissions—impacts sectors of the Australian economy differently. It is important to understand how changes in the globe’s climate impact specific sectors of the economy, and it is also important to have a clear understanding of those sectors that produce significant greenhouse gas emissions. If Australia is to successfully meet its international emission reduction commitments while maintaining a strong economy with high standards of living, risks associated with both the impact of global climate change and the contribution to climate change must be managed and mitigated.
2.134
The Committee considers that the Australian Government, through the upcoming refresh of its National Climate Resilience and Adaptation Strategy, should ensure that a robust mechanism to measure Australia’s progress against this framework is developed, implemented and reported.
An emissions reduction target
2.135
Australia has committed to reducing its carbon emissions to between 26% and 28% on 2005 levels by 2030. Evidence presented to the Committee by DISER suggests that Australia is on track to exceed this ambition. This is an achievement that should be acknowledged.
2.136
The Committee acknowledges that many of Australia’s key trading partners, including the United Kingdom, United States, Japan and New Zealand have determined to achieve net zero emissions by 2050, and it notes that in the case of New Zealand its net-zero target excludes biogenic methane emissions from agriculture which account for approximately half of New Zealand’s net emissions. The Committee also notes that China, Australia's largest trading partner, has undertaken to reach net zero emissions by 2060 and India has recently said that while it supports a global commitment to net zero it will not commit to a national level net zero target due to the costs involved.
2.137
While (as noted above) Australia has already committed to achieving net zero emissions as soon as possible, and preferably by 2050, the Bill proposes a specific date by which Australia is to achieve net zero emissions—that is, by 2050. The Committee was advised that work to consider Australia’s emissions reduction pathway beyond 2030 is ongoing, in line with the Government’s net-zero objective.
2.138
Any future modelling of emissions reduction targets should consider the impact those targets may have on a range of economic and social scenarios. In particular, consideration should be given to how the economic sectors and workers that will be most impacted by the transition to a low-emissions economy can be accommodated, re-tooled and equipped to thrive.
2.139
While it is important that Australia reach the milestone of net zero, it is equally important that the Australian Government determine its own responsible, evidence-based, technology-neutral and equitable pathway to achieve that milestone. The protection of Australian jobs and economic growth should be prerequisites to any emissions reduction target.
2.140
The Committee believes that the Australian Government should determine the emissions reduction proposition that it wishes to present at the COP 26 conference in December 2021. The Australian Government should either seek to clarify when it will achieve net zero emissions, or articulate what it can achieve by 2050. In either case, the chosen pathway demonstrating how the target will be achieved should be defined to provide the Australian public, business and workers with greater certainty.
Emissions budgets
2.141
In the Committee’s view, the setting of emissions budgets and emissions reduction plans is consistent with accepted international best practice. Such mechanisms provide useful emissions reduction progress indicators as well as environmental, business and community certainty.
2.142
The Committee understands, from the evidence presented by DISER, that emissions budgets have been calculated and are in place for Australia’s existing emissions targets to 2030. The Committee is therefore confident that the Australian Government would similarly institute related emissions budget targets to meet its emissions reduction goals post-2030, once these are finalised.
Monitoring, reporting and accountability
Climate Change Commission
2.143
The Committee is of the view that the establishment of a Climate Change Commission as required by the Bill is unnecessary. While the Committee appreciates that the proposal draws from the United Kingdom model and could encompass a variety of functions, it considers that there are risks to steering formal policy decisions away from the Parliament and the Executive. In the Committee’s view, it is the domain of elected representatives within the Parliament and the Executive to determine and seek mandates from the Australian public for Australian climate policy. The Committee does not support measures that risk weakening the ability of the Australian public to pass judgement on alternative climate policies at elections or risk diluting the decision-making responsibility of the Parliament or Executive.
2.144
The Bill seeks to ensure that the Australian Government has access to depoliticised, independent and considered scientific and expert advice. In the Committee's view, functions and expertise on matters such as risk assessment, climate adaptation, emissions reduction and emissions budgets, already exist within the bureaucracy through agencies including DISER, DAWE and CCA.
2.145
As such, the creation of an independent body to provide advice could duplicate existing roles and resources or at worst, lead to conflicting advice. Moreover, consideration needs to be given to the disruptions and costs of replacing an agency that is currently undertaking significant and valuable work, the CCA, in order to establish a new one with broadly similar functions.
2.146
Rather than endorsing establishment of the CCC as proposed in the substantive Bill, the Committee acknowledges that the Australian Government’s existing emissions reduction monitoring and reporting processes are world-leading and in line with international and domestic commitments. Further, the Committee considers it important that the Australian Government remains world-leading by embracing opportunities for continuous improvement.
2.147
In this respect, the Committee is cognisant of the evidence it received suggesting that the capacity of the CCA to provide expert advice and assessments to government may not be sufficiently utilised at present. Rather than seek to replace the CCA with the CCC, it may be more efficient to consider how the CCA could be better utilised and more fully engaged in monitoring Australia’s climate performance and providing advice to support the Government and its responsible agencies in developing and implementing relevant policies.
Transparency and reporting
2.148
The Committee recognises best–practice reporting and accountability practiced by the Australian Government, and supports ongoing transparency by way of quarterly reporting on emissions, annual forecasts and annual low emissions technology statements. The Committee also believes any commitment to future targets should be accompanied by an explanation on how such targets would be achieved.
2.149
The Committee further notes that the presentation of the Australian Government’s first low emissions technology statement in 2020 represented a significant step in the development of Australia’s Technology Investment Roadmap. The Australian Government should ensure that future iterations of the Statement continue to underpin a technology neutral and evidence-based approach within which new and emerging technologies—including emerging nuclear technologies—can be objectively assessed.
Climate risk reporting by Commonwealth entities
2.150
The Committee is concerned that that the consequential Bill would not only abolish the existing CCA, but would also place additional obligations on all Commonwealth entities. In the Committee’s view the proposed amendment to the PGPA Act is potentially problematic because it would create an additional burden upon all Commonwealth agencies, and one which may not be appropriate or necessary for all agencies.
Recommendation
2.151
In summary, the Committee recognises that the climate is changing and action is required to decarbonise Australia’s economy and meet Australia’s international obligations. The Committee is also cognisant of the need for climate action to be achievable, evidence-based, technology neutral and accountable. The Committee regards a credible plan setting out how decarbonisation will be achieved, while protecting Australian jobs and economic growth, as an essential prerequisite to any emissions reduction target.
2.152
The Committee notes that the Australian Government has committed to achieving net zero emissions as soon as possible, and preferably before 2050, and that DISER is undertaking ongoing work on how long term emissions reductions can be met as part of the forthcoming long term emissions reduction strategy.
2.153
The Committee considers that Australia’s climate objectives can and should be achieved using existing climate policy architecture, without any weakening of the ability of the Australian public to pass judgement on alternative climate policies at elections or risk diluting the decision-making responsibility of the Parliament or the Executive. Nevertheless, the Committee also believes future climate policy should draw on some of the positive ideas in the Bills, as set out in this report.
2.154
The Committee recommends that the Bills not be passed.
Ted O’Brien MP
Chair
23 June 2021