2.1
This chapter provides an overview of the broader context of the Climate Change Bill 2022 and the Climate Change (Consequential Amendments) Bill 2022, including Australia's experience and history of climate change, international efforts to tackle climate change, and future opportunities for Australia.
The reality of climate change
2.2
There is widespread scientific consensus that human activity, in particular the production of greenhouse gases, has caused atmospheric changes that in turn have led to significant, ongoing disruption to the world's climate.
2.3
The Intergovernmental Panel on Climate Change (IPCC) is the world's foremost authority on climate change. IPCC research confirms that the average global temperature has risen by approximately 1.1 degrees since the pre‑
industrial era. This rise has been accompanied by unprecedented changes in the atmosphere, oceans, cryosphere, and biosphere.
2.4
The global temperature will almost certainly continue to increase, but the rate and magnitude of the increase will be determined by our ability to limit future greenhouse gas emissions. The IPCC considers it is still technically feasible to limit the total increase to 1.5 degrees above pre-industrial levels. However, without a large and rapid reduction in emissions, the increase is likely to exceed 2 degrees before the end of the 21st century (and may be as high as 4 degrees). IPCC projections suggest these trajectories have vastly different outcomes: while a global rise of 1.5 degrees would result in substantial social and environmental challenges, a rise of 2 degrees or more may be unliveable in some parts of the world.
2.5
The scientific community's confidence in the integrity, rigour and accuracy of the IPCC's work was apparent in the evidence the committee received from experts including Professor Penny Sackett, Professor Frank Jotzo, Professor Nerilie Abram, Professor David Karoly, Professor Matthew England, the Australian Centre for Excellence in Antarctic Science, the ARC Centre of Excellence for Climate Extremes, and the Australian Academy of Science.
Committee view
2.6
The committee acknowledges that the general scientific position on climate change is unequivocal and unanimous. While our understanding of its impacts will undoubtedly continue to progress, there is no credible debate as to the existence of climate change, the causative role of greenhouse gas emissions, or the urgent need to limit global temperature increases. The science is settled.
The impact of climate change on Australia
2.7
The consequences of climate change are complex and interrelated, and our understanding of their full scope and magnitude continues to evolve. Professor Penny Sackett told the committee:
…as our understanding grows, although the scientific relationship between greenhouse gases and temperature rise is well understood, it has come to scientists as a surprise as they learn more and more about how the impacts are more severe at a given level of warming than previously thought. The two-degree world we might imagine now is a very different world to the two-degree world scientists were thinking we might see 10 years ago or even when the Paris Agreement was signed [in 2015].
2.8
Australia's average temperature is now approximately 1.4 degrees above pre‑industrial levels, a substantially greater rise than the global average. The rise in temperature has been accompanied by more frequent hot weather, fewer cold days, shifting rainfall patterns, and rising sea levels.
2.9
The IPCC's sixth assessment report paints a stark picture of Australia's vulnerability to severe and irreparable harm if climate change is not immediately addressed. Some of the key risks identified include a decline in agricultural production due to hotter and drier conditions, an increase in heat-related illness and death, the loss and degradation of coral reefs due to ocean warming, and the destruction of low-lying coastal areas due to sea level rise.
2.10
The potentially devastating impacts of climate change were of significant concern to many individual submitters, such as GetUp member Mary H who said '[t]he scientific evidence on the depth and urgency of the climate emergency is terrifying'.
2.11
Several submitters expressed particular concern for their children and other young Australians. GetUp member Peter E, a father of two children, said 'I am unashamed to admit that I am pretty scared of what the future holds for them', while GetUp member Cheryl H observed that 'kids are scared and they have a right to be'. Teenage climate campaigner Ms Anjali Sharma told the committee '[t]here is a general attitude of fear and trepidation among young people regarding the projected state of the climate'.
Extreme weather events
2.12
There is a well-established causal connection between climate change and extreme weather events. The CSIRO and the Bureau of Meteorology link ongoing, long-term climate change to significant disturbances in Australian weather patterns including extreme heat, heavy rainfall and coastal inundation, fire weather, and drought. The ARC Centre of Excellence for Climate Extremes warned in its submission that 'every additional fraction of a degree of warming increases the risk of extreme [weather] events'.
2.13
Many submitters shared their own experiences of extreme weather events and natural disasters with the committee. The Australian Trucking Association highlighted the direct impact of road closures and dangerous conditions on the trucking industry, while the Construction, Forestry, Maritime, Mining and Energy Union pointed out that its members have been at the forefront in responding to natural disasters and extreme weather events.
Economic impacts
2.14
The direct effects of climate change on infrastructure, agriculture, biodiversity, and human health will have considerable flow-on effects across the economy. Modelling conducted by the Swiss Re Institute suggests climate change could reduce global GDP by as much as 18 per cent by 2050 if not adequately addressed.
2.15
Analysis published by the Reserve Bank of Australia recognises that '[c]limate change creates risks for the Australian financial system that will rise over time to become substantial if they are not properly managed'. In its submission, the Financial Services Council confirmed that 'investment funds see climate risk as a real material financial risk to their investments'.
Insurance industry
2.16
The committee heard that the increasing frequency and severity of extreme weather events has had a substantial impact on the insurance industry, reducing the availability and affordability of insurance premiums in Australia. The Insurance Council of Australia expects worsening climate change to drive further increases in the cost of premiums and threaten the long-term viability of the industry.
Agriculture, regional and rural Australia
2.17
The effects of climate change are particularly evident across rural and regional Australia, where populations are already grappling with drought, floods, bushfires, and water shortages. Rural and regional communities are uniquely exposed to certain consequences of climate change, including:
…changes to the distribution of pests and diseases, interruptions to supply chains and transportation networks, altered seasonality and work schedules, and pressures on the agricultural workforce.
2.18
Climate change is of particular concern to the agricultural sector. Crops and livestock are dependent on the natural environment and directly susceptible to changes in conditions. Between 2001 and 2021, changes in seasonal conditions reduced average annual farm profits by an estimated 23 per cent. As Farmers for Climate Action put it, 'Australian farmers are on the front lines of climate change'.
Impact on vulnerable communities
2.19
Vulnerable and marginalised communities bear a disproportionate share of the burdens imposed by climate change. Those already experiencing financial or social disadvantage have fewer resources to cope with, adapt to and recover from the effects of climate change. The IPCC describes climate change as a 'poverty multiplier'.
2.20
Doctors for the Environment Australia and the Climate and Health Alliance highlighted the immediate and long-term health risks of environmental damage. The Australian Council of Social Service drew the committee's attention to the particular harm to First Nations communities, which was reiterated by other submitters, including the Environmental Defenders Office and the Australian Religious Response to Climate Change.
Australia's historical emissions reduction targets
2.21
Australia is a longstanding participant in global efforts to address climate change and was one of the first signatories to the United Nations Framework Convention on Climate Change (UNFCCC) at the Rio Earth Summit in 1992.
2.22
The Kyoto Protocol was an international agreement under the UNFCCC intended to reduce the atmospheric concentration of greenhouse gases. The Protocol included binding emission reduction targets for certain industrialised countries and economies in transition.
First Kyoto Protocol commitment (2008–2012)
2.23
Australia's initial commitment under the Protocol was to limit greenhouse gas emissions to 108 per cent of 1990 emission levels by 2012. Australia exceeded this target.
Second Kyoto Protocol commitment (2013–2020)
2.24
In the second commitment period, Australia committed to limit emissions to 99.5 per cent of 1990 emissions levels by 2020 (which was equivalent to a 5 per cent reduction on 2000 levels by 2020). Australia also exceeded this target.
The Paris Agreement
2.25
The Paris Agreement succeeded the Kyoto Protocol as the binding international agreement under the UNFCCC. Consistent with IPCC reporting, the overarching goal of the Agreement is to limit global temperature increase to well below 2 degrees and pursue efforts to limit it to 1.5 degrees.
2.26
The Agreement facilitates five-year cycles of increasingly ambitious action carried out by signatory countries, which must develop and maintain nationally determined contributions (NDCs). NDCs are the central mechanism by which countries outline their short and long-term emissions reduction targets, how they intend to achieve those targets, and the means by which they will monitor and verify their progress.
2.27
The former government submitted Australia's first NDC in 2015, committing to reduce greenhouse gas emissions by 26–28 per cent below 2005 levels by 2030. In June 2022, the Albanese government submitted an updated NDC committing to reduce emissions by 43 per cent below 2005 levels by 2030 and achieve net zero emissions by 2050.
Emissions reduction targets
International emissions reduction targets
2.28
Parties to the Paris Agreement have set out their 2030 emissions reduction targets in NDCs. More than half also have a long-term goal of net zero emissions, including Australia's key allies and trading partners (see Table 2.1).
Table 2.1:
International emissions reduction targets
|
|
|
|
|
United States of America
|
50–52% below 2005 level
|
Net zero
|
|
United Kingdom
|
68% below 1990 level**
|
Net zero*
|
|
Canada
|
40–45% below 2005 level*
|
Net zero*
|
|
Japan
|
46% below 2013 level
|
Net zero*
|
|
China
|
65% reduction in 'carbon intensity' below 2005 level
|
Net zero by 2060
|
|
India
|
45% reduction in 'emissions intensity' below 2005 level
|
Net zero by 2070
|
|
Republic of Korea
|
40% below 2018 level
|
Net zero*
|
|
New Zealand
|
50% below 2005 level
|
Net zero*
|
^ Nationally Determined Contributions.
* This target is legislated.
** The UK also has a legislated target of a 57 per cent reduction by 2030.
Source: United Nations and national government sources.
2.29
The diplomatic benefits of stronger domestic climate action are discussed at paragraphs 3.26–3.28.
Revision of emissions reduction targets
2.30
Parties to the Paris Agreement are expected to submit revised NDCs every five years, with the next round due in 2025. However, in recognition that existing commitments are not collectively sufficient to achieve the global temperature goals of the Agreement the parties have agreed to revisit and strengthen their NDC targets by the end of 2022.
State and territory emissions reduction targets
2.31
All Australian states and territories have emissions reduction targets in place, as do many local governments (see Table 2.2).
Table 2.2:
State and Territory emissions reduction targets
|
|
|
|
|
New South Wales
|
50% below 2005 level
|
Net zero
|
|
Queensland
|
30% below 2005 level
|
Net zero
|
|
South Australia
|
50% below 2005 level
|
Net zero
|
|
Tasmania‡
|
-
|
Net zero
|
|
Victoria
|
45–50% below 2005 level*
|
Net zero*
|
|
Western Australia
|
-
|
Net zero
|
|
Australian Capital Territory
|
65–75% below 1990 level*
|
Net zero by 2045*
|
|
Northern Territory
|
-
|
Net zero
|
* This target is legislated.
‡ Net zero emissions achieved.
Source: state and territory government sources.
Corporate and sectoral targets
2.32
Many Australian companies have established their own emissions reduction targets, including Coles Group, Woolworths Group, Woodside Petroleum, Fortescue Metal Group, Lendlease and Transurban Holdings. The committee heard that approximately 70 per cent of the ASX 200 has adopted net zero commitments, which have become 'the norm for Australian businesses'. Twenty-three of Australia's largest companies, representing 23 per cent of Australia's direct greenhouse gas emissions, are participating in a voluntary pilot initiative to report their climate commitments and progress to the Clean Energy Regulator.
2.33
In addition, a range of sector-specific targets have been endorsed by various industry groups and peak bodies across Australia. These cover sectors as diverse as the red meat industry, the healthcare system, and the fashion industry.
Transition presents opportunities
2.34
The challenges posed by climate change are accompanied by significant opportunities as Australia—and the world—adapts to climate change, mitigates its effects, and transitions to a lower emissions future. As the Minister for Climate Change and Energy has observed, 'with the right ambition, action and cooperation, Australia can seize the once-in-a-generation opportunity ahead of us and thrive in a net zero world'.
The economic upside
2.35
The domestic and global response to climate change has significant economic potential for Australia. The Department of Climate Change, Energy, the Environment and Water told the committee there is potential for $131 billion in new technology and jobs by 2030. A report by the Business Council of Australia suggests that addressing climate change could add as much as $890 billion to Australia's GDP by 2070. Professor Matthew England put it succinctly: 'there is a lot of money to be made from emissions reductions'.
2.36
The Blueprint Institute was similarly optimistic, especially in relation to the benefits to regional areas:
Abundant opportunities exist for regional Australians, businesses, manufacturers, and industries to create new jobs, and profit from new technologies, demand for new materials, and new export markets… Much of the infrastructure that must be built to secure future economic prosperity and emissions reductions will be contingent on the support and cooperation of regional landowners and communities.
Revitalising regional Australia
2.37
The committee received extensive evidence that the parts of Australia most vulnerable to the effects of climate change are also well placed to take advantage of the opportunities to address it. More than 80 per cent of jobs generated by the Powering Australia plan will be in rural and regional Australia. Farmers for Climate Action noted that 'there are huge economic opportunities for farmers and regional Australians'. Regional advocacy group The Next Economy agreed that 'regional areas are well placed to take advantage of the many economic opportunities related to the work we need to do'.
Emerging markets and industries
2.38
Pursuing emissions reduction opportunities across the Australian economy has considerable potential to facilitate growth in new and emerging markets and industries.
Renewable energy
2.39
The most immediate opportunities will be driven by the transition to renewable energy sources. Under the Powering Australia plan, the government will invest $20 billion to update the electricity grid to support more renewable power, with the aim of increasing the share of renewables in the National Electricity Market to 82 per cent by 2030. The Australian Energy Market Operator anticipates an excess of low-cost renewable energy, which could be either exported or used to accelerate domestic industrial production and energy-intensive digital industries.
2.40
The Blueprint Institute argued that while changes to the grid are not without costs, they must also be seen as 'investments', which 'will reap significant rewards given Australia's inherent advantages in a renewable energy economy'.
2.41
Professor Frank Jotzo noted that, unlike other countries facing this transition, there are 'no practical physical limitations' to generating renewable energy in Australia. Moreover, the Business Council of Australia gave evidence that:
… in a world where extraction is cheap, and at the marginal cost almost zero, but storage and transportation is expensive, you're far more likely to see industry move to the places where energy is sourced… What that means is that you would naturally expect a lot of energy intensive industries to become far more attractive investment propositions in Australia.
Electric vehicles
2.42
The Australian Manufacturing Workers' Union noted that the shift towards electric vehicles 'represents a significant opportunity for Australia to rebuild and expand its manufacturing industry'.
2.43
The Powering Australia plan includes a series of measures aimed at expanding Australia's electric vehicle market including consumer subsidies, development of a National Electric Vehicle strategy, and a commitment to increase the number of electric vehicles in the Commonwealth fleet.
Other low-emission technologies
2.44
Australia's highly skilled workforce, strong scientific and industrial research capacity, unique geography, and abundant natural resources will make it well placed to lead the development of a variety of other products and technologies. These include battery storage and transmission, low-emissions livestock feed, marine methane reduction, and sustainable aviation fuel.
Critical minerals
2.45
Australia is naturally endowed with many of the critical minerals, including lithium, nickel, cobalt, manganese, vanadium, zinc, and copper, which will support a rapid transition to a clean energy economy. In terms of economic inventories, for many of these critical minerals, Australia ranks in the top ten worldwide.
2.46
The Chief Executive Officer of the Minerals Council of Australia, Ms Tania Constable, told the committee, 'the opportunity to supply the minerals and metals for the low-emissions global future is immense'. Ms Constable acknowledged that this would require significant additional investment in the Australian and global mining sectors in order to meet increasing demand. Professor England noted that Australia has 'an abundance of lithium and silicate and copper, all the things that are needed to drive a low-carbon economy'.
2.47
This view was echoed by Science & Technology Australia, which identified a dual opportunity for Australia in both:
[p]roducing the critical minerals needed for renewable technologies, and also converting the raw materials into products – adding value to our exports with vast benefits to the nation's economy.
Demand-side responses
2.48
There are also opportunities to pursue a range of demand-side responses to climate change, including the rollout of energy efficient consumer technologies. Reducing the overall energy consumption of existing technologies, for example by using heat pumps and electric vehicles, delivers an immediate reduction in greenhouse gas emissions while the underlying energy sources undergo decarbonisation.
2.49
Demand-side responses have the additional benefit of reducing direct costs to consumers. Dr Simon Bradshaw of the Climate Council remarked: '[a]ction on climate change is very much action on cost of living as well'.
Transforming the workforce
2.50
The emergence of new technologies and industries will be accompanied by new opportunities for the workforce. Initiatives under the Powering Australia plan are expected to create more than 600 000 additional Australian jobs. The Minister for Climate Change and Energy has said:
Australia is on the path to becoming a renewable energy superpower and with that comes the potential for high-skill, high-paying sustainable jobs in industries such as renewable manufacturing, green hydrogen, offshore wind and energy efficiency.
2.51
Energy sector representatives emphatically agreed:
What the doubling of deployment [in the energy sector] means is jobs. It just means jobs, jobs, jobs and jobs in Australia. So there are just huge opportunities.
2.52
In addition to direct employment within the energy sector, there will be extensive flow on effects:
… these are huge infrastructure projects which are going to need mines and minerals, which they're going to need someone to manufacture and process and refine. And then we're going to need people to construct and build.
2.53
The committee heard that new employment opportunities are not limited to energy, manufacturing, and industry:
Solving the climate crisis is an opportunity to rebuild our public sector, revitalise our cities and towns and create good jobs in industries ranging from construction to the arts.
2.54
In addition, there is an opportunity to develop Australia's domestic scientific and research capacity, capitalising on Australia's role as a leader in southern hemisphere climate science.
Keeping up with global markets
2.55
Transition also presents an opportunity to strengthen trade-exposed industries and maintain Australia's position as a competitive and attractive investment option. As the Financial Services Council explained:
Globally, there is already a shift in the allocation of capital toward sustainability friendly destinations, driven by investor demand and long-term risk appetite, and it is important that Australia can take advantage of this shift.
Committee view
2.56
The committee acknowledges that Australia is facing significant risks due to the growing impacts of climate change. At the same time there are enormous opportunities to develop new businesses, industries, and employment, right across the economy. The committee encourages governments, industry, and the wider community to work together to capitalise on the opportunities presented by the domestic and global response to climate change.