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On 28 July 2022, the Senate referred the provisions of the Climate Change Bill 2022 (the bill) and the Climate Change (Consequential Amendments) Bill 2022 (the Consequential Amendments bill) (collectively, the bills) to the Environment and Communications Legislation Committee for inquiry and report by 31 August 2022.
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The bills would formalise Australia's emissions reduction targets in legislation, to contribute to the global goals of limiting temperature rise in line with the objectives of the Paris Agreement.
Conduct of the inquiry
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In accordance with its usual practice, the committee advertised the inquiry on its website and wrote to relevant organisations inviting submissions by 10 August 2022.
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The committee published 186 submissions, which are listed at Appendix 1 and are available on the committee's website at aph.gov.au/senate_ec. As noted below, the committee received more than 2800 additional member statements that were attached to GetUp's submission.
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The committee also held public hearings on 18 and 19 August 2022 in Canberra and via videoconference. A list of witnesses who gave evidence at the hearings is available at Appendix 2.
Acknowledgement
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The committee would like to thank those individuals, institutions and organisations that contributed to the inquiry, particularly given the inquiry's short timeframe.
Scope and structure of the report
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This report comprises four chapters:
Chapter 1 provides background information relating to the bills and outlines the bills' purposes and key provisions;
Chapter 2 provides broader contextual information on the bills;
Chapter 3 outlines support for the Climate Change bill and examines a range of key issues raised in submissions and public hearings, including emissions reduction targets, the annual climate change statement, the development of future targets and an independent review of the legislative framework. It also sets out the committee's view on these issues and provides a recommendation; and
Chapter 4 provides evidence related to the Consequential Amendments bill and other issues related to the bills. It also sets out the committee's view on these issues and provides recommendations.
Note on references
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In this report, references to the Committee Hansard are to the proof (uncorrected) transcripts. Page numbers may vary between the proof and the official transcripts.
Background to the bills
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Climate change is causing significant impacts in Australia, in our region, and globally. The 2019–20 Black Summer bushfires and 2022 Eastern Australia floods are among the most severe domestic impacts, while similar phenomena have been seen across the world. Much of the western United States has been affected by drought and catastrophic summer wildfires since early 2020. In June and July 2022, floods in China damaged over 500 000 homes and washed away roads. Summer 2022 heatwaves in Europe caused at least 1500 deaths, damage to infrastructure and wildfires across the continent.
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Climate change is likely to produce increasing intensity and frequency of extreme events, with wider distribution, extended duration, and increasing complexity of linked impacts.
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The Minister for Climate Change and Energy, the Hon Chris Bowen MP, has described climate change as 'one of the most urgent and pressing issues of our time'. Stronger action is therefore required to mitigate further catastrophic impacts of climate change and to keep the objectives of the Paris Agreement on climate change within reach.
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The Paris Agreement, to which Australia is a party, aims to strengthen the global response to the threat of climate change, by holding the increase in the global average temperature to well below 2 degrees above pre-industrial levels, and working to hold temperature increase to 1.5 degrees. It also aims to direct funding towards lowering greenhouse gas emissions and climate resilient development.
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During the 2022 Federal Election campaign, the then Opposition announced its Powering Australia policy. As part of this policy, it committed to reduce Australia's emissions by 43 per cent by 2030.
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On 24 May 2022, the Prime Minister, the Hon Mr Anthony Albanese MP in his opening remarks to the Quad Leaders' Meeting in Tokyo, pledged that the government would take ambitious action on climate change and increase support to our regional partners. Mr Albanese recognised climate change as the main economic and security challenge for the island nations of the Pacific.
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Subsequently, the Pacific Island Forum Foreign Ministers Meeting welcomed Australia's renewed commitment to the Forum's climate change priorities and Australia's interest in hosting a United Nations Framework Convention on Climate Change Conference of Parties in partnership with Pacific Island countries.
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In June 2022, the government formally communicated to the Secretariat of the United Nations Framework Convention on Climate Change that Australia would reduce its greenhouse gas emissions by 43 per cent below its 2005 levels by 2030 and reaffirmed its target to achieve net zero emissions by 2050.
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On 27 July 2022, the government introduced the bills, which are designed to enshrine these targets in domestic law. On 4 August 2022, the bills were amended before being agreed to in the House of Representatives. The effects of the amendments have been incorporated into discussion of the purposes of the bills below. Where appropriate, 'the amended bill' is used to signify amendments passed by the House of Representatives.
Key provisions of the bills
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This section provides an outline of the five key elements of the bill, including:
setting emissions reduction targets in Commonwealth law;
the Minister to make an annual statement on climate change to Parliament;
the Climate Change Authority to advise the Minister on the annual climate change statement;
the Climate Change Authority to advise the Minister on the development of future greenhouse gas emissions reduction targets; and
regular independent reviews of the legislation.
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This section also provides an overview of the Consequential Amendments bill.
Climate Change Bill
Emissions reduction targets
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The purpose of the bill is to ensure that Australia's emissions reduction targets are recorded not only in international agreements, but also in Commonwealth legislation. Formalising the targets in legislation is intended to provide certainty to the Australian public and businesses about the commitments and highlights the critical importance of the targets for the nation's future.
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A key object of the bill is to set out Australia's greenhouse gas emissions reduction targets, which will contribute to the global goals described in Article 2 of the Paris Agreement, namely:
to hold the increase in the global average temperature to well below 2°C above pre-industrial levels; and
to pursue efforts to limit the temperature increase to 1.5°C above
pre-industrial levels.
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The bill would legislate a 43 per cent reduction target in greenhouse gas emissions by 2030 and net zero emissions by 2050. The 43 per cent emissions reduction target would be implemented as both a point target and a staged 'emissions budget' from 2021 to 2030.
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The government has emphasised that the targets in the bill do not limit Australia's emissions reduction ambitions. A note in the amended bill clarifies that the 43 per cent target acts as a floor, rather than a ceiling:
…the achievement of a target involves reducing Australia's net greenhouse gas emissions to a level that is at or below the target. Accordingly, nothing in [subsection 10(1)] limits Australia's ability to reduce its net greenhouse gas emissions beyond 43% below 2005 levels by 2030.
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The bill would place obligations on the Commonwealth, but not the states or territories. The bill would not exclude or limit the operation of compatible state or territory legislation.
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The government's power to set new or adjusted emissions reduction targets under the Paris Agreement would not be constrained by the bill. However, any new or adjusted future target would be required to represent an increased ambition from the previous target.
Annual climate change statement
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The third object of the amended bill promotes accountability and ambition. This subsection requires the Minister to prepare and table in each House of Parliament an annual climate change statement.
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The Minister would be required to prepare an annual climate change statement within six months after the end of each financial year. The statement would encompass:
national progress towards achieving emissions reduction targets;
international developments relevant to addressing climate change;
current climate change policies;
the effectiveness of climate change policies towards achieving emissions reduction targets and reducing emissions in the sectors covered by those policies; and
the impact of climate change policies, including their social, employment and economic benefits, on rural and regional Australia.
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The Minister would be required to table a copy of the annual climate change statement within five sitting days after its preparation was completed. In practice, this would mean that each financial year's annual climate change statement would be likely to be tabled in February of the following year. In evidence given at a public hearing, the department indicated that the first annual statement is expected to be completed by the end of 2022, for tabling in February 2023.
Advice from the Climate Change Authority
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The Climate Change Authority (CCA) would be required to advise the Minister on the preparation of the annual climate change statement. The CCA may undertake public consultation in the preparation of this advice but is not required to do so. The bill is silent on how public consultation would be undertaken. Written advice to the Minister on the statement must be published on the CCA website, and tabled in Parliament within 15 days of it being provided to the Minister.
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If the Minister were to not accept a material aspect of the CCA's advice on the annual climate change statement, the Minister would be required to table a written statement of reasons within five sitting days after preparation of the statement is complete.
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The Minister would also be expected to address the Parliament on the statement. Members and Senators would have an opportunity to respond to the statement.
Development of future targets
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The Paris Agreement proposes that countries should prepare, communicate, and maintain nationally determined contributions (NDCs) to emissions reduction every five years. Parties to the Paris Agreement are also called on to revise existing NDCs to set more ambitious targets, in accordance with guidance adopted by the Conference of the Parties (COP).
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At COP26 in November 2021, parties agreed to the Glasgow Climate Pact. The pact calls on parties to 'revisit and strengthen the 2030 targets in their nationally determined contributions as necessary to align with the Paris Agreement temperature goal by the end of 2022'.
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The bill requires the CCA to advise the Minister, if requested, on emissions reduction targets for new or adjusted NDCs under the Paris Agreement. The Minister must seek advice on targets for new nationally determined contributions at least once every five years, but is not required to seek advice on targets for adjusted NDCs.
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The Commonwealth must only communicate a new NDC in accordance with the Paris Agreement that includes a 2035, 2040 or 2045 target if the CCA has given advice.
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In preparing advice on the development of future targets, the CCA would be required to undertake public consultation. The bill is silent on how public consultation would be undertaken.
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The advice given to the Minister must include an explanation of how the emissions reduction targets have taken into account global average temperature thresholds set out in Article 2 of the Paris Agreement.
Reviews of the legislation
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To ensure accountability, the bill proposes regular independent reviews of the legislation. The first review would take place after five years, with subsequent reviews every ten years. Each review would be informed by public consultation. Reviewers would be required to provide a written report to the Minister, who would be required to table that report within 15 sitting days of receiving it.
Climate Change (Consequential Amendments) Bill
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The Consequential Amendments bill would insert the consideration of emissions reduction targets into 14 pieces of existing federal legislation. This legislation covers Commonwealth departments, entities and schemes that are, or could be, contributing to national emissions reduction. Embedding emissions reduction targets in legislation would ensure that relevant Commonwealth departments, entities and schemes can contribute to the delivery of those targets and provide a springboard for achieving new or adjusted targets in future.
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The Consequential Amendments bill would update references to international climate agreements within the amended legislation, to reflect the adoption of the Paris Agreement. This would include the commitments in Article 2 of the Paris Agreement, including the global temperature thresholds, as a key consideration for the CCA when performing its functions.
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The emissions reduction targets captured in the Consequential Amendments bill encompass both the legislated targets in the bill and also any new or adjusted targets set under the Paris Agreement. This would ensure that the legislation to be amended will continue to implement Australia's obligations under the Paris Agreement as those obligations progress.
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The Consequential Amendments bill would not 'limit or constrain the exercise of powers or performance of the existing functions of the relevant entities and schemes'.
Human rights
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The Explanatory Memoranda to the bills note that the government 'recognises that climate change can impact upon the enjoyment of human rights' and that the bill is consistent with all treaties to which Australia is a party. The Explanatory Memoranda also state that the bills are compatible with human rights because they promote the protection of human rights.
Comment of the Scrutiny of Bills Committee
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The Senate Standing Committee for the Scrutiny of Bills has not yet considered the bills. Consideration of the bills is anticipated for early September 2022.
Financial impact of the Bills
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The Explanatory Memoranda note that there is no financial impact associated with the bills. The Explanatory Memorandum to the bill also notes that the government's Powering Australia plan includes a separate commitment to ensure the Climate Change Authority is adequately resourced for all of its functions, which will be addressed through the budget process.