The need for emissions reduction targets with integrity
I thank the committee for the work it has done in relation to this inquiry. I also thank all those witnesses and submitters for their contributions.
Human influence on the climate system is now an established fact. Australia has warmed by 1.4 degrees Celsius since 1910, more than the global average of 1.1 degrees Celsius.
The impact of climate change is being felt across the country. The Black Summer bushfires caused $2.3 billion damage and cost Australian agriculture between $4 and $5 billion. The recent flooding in northern NSW and Queensland caused more than $4.3 billion in damage. Our health has suffered, with increased deaths caused by heat and smoke inhalation, and declining mental wellbeing associated with a changing climate. The natural environment is in a state of decline. The most recent State of the Environment report is clear that climate change is wrecking ecosystems and destroying Australian biodiversity.
Australia is particularly vulnerable to the impacts of global warming. Temperatures are going to continue to rise, and the impacts of climate change are going to become more pronounced.
The good news is that decisive action will reduce the level and impact of warming. The transition to a clean energy future presents unparalleled opportunities for Australia. Blessed with an abundance of solar, wind and rare earth minerals, we are perfectly situated to become a renewable energy superpower.
The buds of this opportunity are already being seen. Australia leads the world in rooftop solar technology. The electricity supplied to households in my electorate, the Australian Capital Territory, is 100 per cent renewable. A green hydrogen precinct in northwest Australia is showing promise of significant green hydrogen production.
Bold action is needed if Australia is to take full advantage of these incredible opportunities.
Although I advocated for more ambitious emissions reduction targets, I welcome legislation that enshrines Australia’s emissions reduction targets. This is best practice and will give much needed certainty to investors looking to provide the large-scale capital required for the clean energy transition.
A national climate law should provide a comprehensive, unifying basis for climate change policy. The bills should provide a framework for future action on climate.
Regrettably, the bills themselves do not provide an over-arching or comprehensive position on climate policy, other than to set a mid-term and long-term emissions reduction target. The bills fall short on measures of accountability, transparency, fairness, scientific backing, and a proactive frame around policy development.
I therefore provide comments and recommendations on improvements to the bills that would give the emissions reduction targets integrity.
Transparency on the impact of Federal Government Budget measures
The committee’s report acknowledges the importance of providing greater transparency around progress towards meeting Australia's emissions reduction targets. Furthermore, the committee’s report notes submissions that call for further transparency around the impact of Budget measures and government policies on achieving emissions reduction targets. For example, the Australian Council of Social Service (ACOSS) submitted that policies could be assessed before or after their implementation to measure their effects on achieving emissions reduction targets. Similarly, Climate Action Network Australia submitted that carbon impact assessments of Budget measures should describe their impact on greenhouse gas emissions.
I support the government's intention to provide greater transparency on progress toward emissions targets, and believe further transparency measures are required. An annual Budget statement detailing the impact of Budget measures on emissions reduction targets would provide further transparency and accountability.
The statement would be released alongside the budget papers and require that the government show how decisions in the budget impact on the emissions reduction targets. Every budget night, as the Treasurer delivers his or her speech, Australians will know whether taxpayer money is being spent in a way that reflects Australia’s climate commitments.
The government has committed to reducing the Australian Public Service’s greenhouse gas emissions to net zero by 2030, it would be sensible to start by measuring the impact that budget measures have on emissions.
Recommendation
The Climate Change (Consequential Amendments) Bill 2022 (the Consequential Amendments Bill) be amended to create mechanisms in the Charter of Budget Honesty Act 1998 that provide transparency to the impact that Federal Government Budget measures have on greenhouse gas emissions.
New or revised NDCs to be automatically reflected in legislation
The committee’s report acknowledges evidence that emissions reduction targets proposed in the bills would not automatically be updated when Australia increases its National Determined Contribution (NDC) under the Paris Agreement. ACOSS submitted that this was problematic because the annual climate change statement and the actions of agencies affected by the Consequential Amendments Bill would remain connected to the legislated target. Under the bill as drafted, connecting the annual climate change statement and the actions of agencies to new targets under the Paris agreement would require further legislation.
Several environmental groups called for Australia's NDCs under the Paris Agreement to be reflected in the bills to ensure parliamentary scrutiny and accountability on how targets are being met.
Several groups proposed amending the bill so that updating the legislated emissions target could be done by way of a legislative instrument.
Providing a regulatory mechanism for updating the legislated target in accordance with new or adjusted NDCs under the Paris Agreement would avoid the potential for separate targets to coexist, facilitate enhanced parliamentary scrutiny, improve accountability, and promote compliance with Australia's international obligations under the Paris Agreement.
Recommendation
That the Climate Change Bill 2022 (the bill) be amended such that new or adjusted Nationally Determined Contributions are reflected as emissions reduction targets without the need for further legislative amendment.
Regular reviews of progress
The committee’s report acknowledges that the review process included in the bill would only examine the technical operation of the legislation, and would not investigate the emissions reduction targets, nor progress towards achieving them.
While noting that the annual climate change statement would be required to include some information in this regard, several submissions recommended that the legislation provide for a stronger, more comprehensive process of regular independent review. For example, the National Environmental Law Association submitted that reviews should include examination of Australia's progress against the emissions reduction targets and that reviews should be conducted every two years.
These bills provide an important framework for climate policy. Their adequacy in addressing the significant challenge of climate change should be considered earlier and with greater frequency. The climate cannot wait five years to improve this legislation.
Recommendation
That the bill be reviewed within two years of the legislation coming into effect and at least once every five years subsequent to that review. The reviews should include a consideration of whether the emissions reduction targets set out in section 10 should be more ambitious considering the factors set out in section 15.
The Minister’s annual statement
Content of the statement
The bill provides that the Minister must make an annual climate change statement addressing Australia’s progress towards its emission reduction targets and other related matters. The Minister’s statement is the key mechanism for parliamentary oversight and monitoring of Australia’s progress. The committee received a wide range of suggestions to improve the completeness, reliability and utility of the statement.
Several submissions called for the annual climate statement to include an assessment of various risks presented by climate change. The committee’s report draws on evidence from academic, environmental and financial submitters proposing that an assessment of key climate risks be incorporated in the statement (see paragraphs 3.44 to 3.46). In addition to this evidence, the Bob Brown Foundation called for the annual climate statement to include proposals for meeting the emissions reduction target and explain how those proposals would affect different sectors of the economy, in a similar way to the Climate Act 2008 (UK).
Another element that would improve the annual statement is a thorough consideration of transitional issues. As the committee’s report notes, one of the underlying principles of the Paris Agreement is a just transition for the workforce (see paragraphs 4.45 to 4.47). A wide range of submitters to the inquiry argued that this should be more fully integrated into the legislative framework, including union groups and the ACTU, the Environmental Defenders Office, ACOSS, the National Environmental Law Association and Ms Zali Steggall MP.
The bill allows the Minister to consider sources of advice other than the Climate Change Authority (CCA) in preparing the annual climate statement. The Law Council of Australia submitted that the annual statement should outline what other sources of advice the Minister had regard to in preparation of the statement.
The annual statement on climate change is one of the significant accountability measures in the bill. To be effective, it must consider the impact of climate risk and provide a plan of what the government intends to do to address the risk.
Recommendation
Section 12 of the bill be amended so that the Minister’s annual statement is required to include the following:
An assessment of the physical, national security risks and transition issues such as job loss and economic inequality created by climate change and the climate trajectory.
A breakdown of how much of the carbon budget has been spent on a sector-by-sector basis, including the electricity generation, industrial, transportation and agricultural sectors.
A projection on how the carbon budget should be divided between sectors over the subsequent 12 months.
Refence to any advice considered by the Minister other than that provided by the Climate Change Authority.
Accounting for scope 3 emissions
The bill does not specify whether the annual statement should take into account Australia's scope 3 emissions, but a number of submitters argued that doing so is necessary to ensure the statement is an accurate assessment of Australia’s progress. Environmental organisations suggested that Australia should take responsibility for its total contribution to climate change, including though exports. Those in the financial sector pointed out that improved reporting would increase the availability of quality data.
Including scope 3 emissions in the annual climate change statement would provide a strong signal that Australia is being transparent about its total contribution to global greenhouse gas emissions.
Recommendation
Section 12 of the bill be amended so that the annual statement addresses scope 3 emissions. A definition of scope 3 emissions should also be included in the bill.
Timing of the annual statement
The committee’s report notes that the Minister must table each financial year's annual climate change statement in February of the following year (see paragraphs 1.27–1.28). While it is important for the Minster to have adequate time to consider the CCA’s advice and then prepare the climate change statement, the bill’s timeframes could mean that the public release of the statement occurs up to eight months or later after the end of the relevant financial year. As the LCA submission noted in the context of the publication of the CCA advice (see below), transparency is diminished if publication is delayed. For this reason, I believe that the statement should be prepared and published in a more timely manner.
Recommendation
Section 12 of the Climate Change Bill 2022 be amended so that the annual statement must be made prior to 30 November each year.
Advice on the Minister’s annual statement
Public consultation
The bill requires the CCA to provide advice to the Minister on the preparation of the annual statement. This advice is a valuable mechanism to ensure the statement presents a comprehensive and accurate picture based on independent advice.
The bill enables the CCA to undertake public consultation on its advice. The committee heard that extensive public consultation will not only expand the CCA’s evidence base, ensuring it represents the full spectrum of the Australian public, it also has the potential to facilitate a substantive and well-informed national dialogue about emissions reduction and climate change.
The bill should make clear that public consultation is mandatory.
Recommendation
Subsection 14(3) be amended so that the Climate Change Authority must undertake public consultation.
Timely publication
The bill provides that the CCA must publish its advice to the Minister on its website. The bill was amended in the House of Representatives so that it must also table the advice within 15 sitting days of providing it to the Minister.
As the Law Council of Australia noted, publication of advice is ‘ineffective as a transparency measure unless it is carried out in a timely fashion’. The importance of timely publication was echoed by others, including the Australian Academy of Technological Sciences and Engineering, and Professor Penny Sackett, who noted publication should not be ‘constrained by parliamentary sitting dates’. A period of 15 sitting days may span weeks or even many months.
Recommendation
Paragraph 14(6)(b) be amended to require the Climate Change Authority to table its advice within 15 sitting days of providing it to the Minister or prior to the statement being tabled, whichever is sooner.
Additional considerations in preparing the advice
The bill enables the CCA to provide advice to the Minister on the development of a new or adjusted Nationally Determined Contribution (NDC). Again, this advice is a valuable mechanism to ensure future emission reduction targets are based on current scientific understanding and reflect relevant environmental, economic and social concerns. In preparing its advice, the CCA is expected to be guided by the principles set out in section 12 of the Climate Change Authority Act 2011.
As noted at paragraph 1.29 above, the concept of a just transition for workers must be fundamental to Australia’s emission reduction. While the bill requires the CCA’s advice to include the ‘social, employment and economic benefits’ of new or adjusted targets, this requirement should be expanded to explicitly address the impacts on a just transition.
Climate change is a global challenge with consequences that do not stop at national borders. A range of submitters highlighted the need for wealthy countries like Australia to take on their “fair share” of emissions reduction. Wealthy industrialised nations are responsible for more greenhouse gas emissions per capita and are also better placed to implement emissions reduction programs. Given the inequitable costs and consequences of climate change, it is appropriate for the CCA’s advice to consider the broader global fairness of new or adjusted targets.
Recommendation
Subsection 15(1A) of the Climate Change Bill 2022 be amended to require that the Climate Change Authority’s advice include the following:
The transitional risks and opportunities of any new or adjusted greenhouse gas emissions reduction targets and associated policies.
The global fairness of any new or adjusted greenhouse gas emissions reduction targets and associated policies.
Transparency regarding other advice considered by the Minister
The bill allows the Minister to take advice from sources other than the Climate Change Authority when developing a new or adjusted NDC. The Law Council of Australia submitted a recommendation that the bill be amended to require the Minister to provide a clear statement on what other advice has been received, and the extent to which that advice weighed on the Minister’s decision.
A change to require the Minister to clearly outline the additional advice received and considered would provide accountability for the grounds for a decision to amend or update Australia’s NDC.
Recommendation
Subsection 15(7) of the Climate Change Bill 2022 be amended to require that the statement provided under that section also outline any advice considered by the Minister other than that provided by the Climate Change Authority.
Consequential amendments to Commonwealth legislation and agencies
Regarding the Consequential Amendments Bill, witnesses and submitters drew the committee's attention to a number of concerns, as set out in the committee’s report.
These concerns particularly related to potential inconsistencies between the emissions reductions targets that would be legislated by the bills, and existing Commonwealth legislation and the activities of agencies that may permit, facilitate or even promote increased greenhouse gas emissions.
NOPSEMA decision-making
The committee’s report notes that the CA bill would not require the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to factor emissions reduction into its decision-making processes.
NOPSEMA is responsible for overseeing the exploration and recovery of petroleum and greenhouse gas storage activities in Commonwealth waters, including carbon capture and storage. Given these responsibilities, it would seem prudent to ensure that NOPSEMA assesses projects in line with Australia's legislated emissions targets, alongside the other frameworks it already uses including the Environment Protection and Biodiversity Conservation Act 1999.
The objectives of the Australian Prudential Regulation Authority
Some submissions noted that the risks of climate change were now a standard consideration in the management and governance of Australia's finance sectors, as well as the regulators overseeing these sectors.
Noting this trajectory, there is also an opportunity for the CA bill to further embed climate change targets in the oversight of the finance sector, including banking, insurance and superannuation. This could be done by amending the legislation establishing the Australian Prudential Regulation Authority (APRA), which oversees and regulates Australia's finance sector.
APRA is already actively 'raising awareness of climate-related risks' to its stakeholders, but its objectives could be more actively aligned with the emissions targets that would be legislated by the bill. APRA is required to exercise its functions and powers by ‘balancing the objectives of financial safety and efficiency, competition, contestability and competitive neutrality…to promote financial system stability in Australia’.
APRA’s governing legislation should be amended to note that the objectives of ‘financial safety’ and ‘financial system stability’ include the need to promote and ensure coherence and alignment with Australia’s international climate change law commitments and obligations'.
Removing native forest wood waste as a source of renewable energy
Some stakeholders argued that the burning of native forest wood waste for energy, which is currently recognised as a source of renewable energy under the Renewable Energy (Electricity) Act 2000 (REE Act), is in direct opposition to the requirements of the bills to reduce emissions. It was argued that the use of biomass for energy generation–particularly from native forests– was not only highly inefficient, but was also not ecologically sustainable, a source of greenhouse gas emissions and would destroy valuable forest resources that draw down and sequester carbon.
As noted in the committee's report, biomass was not considered as a 'renewable' fuel by the REE Act prior to amendments made by the Abbott Government. Burning native forest biomass will increase emissions in direct contravention of the aims of the bills. It will also put native forests at risk of further logging, which would reduce carbon storage, and result in a further contravention of the aims of the bills. The REE Act should be amended once more to exclude it as a potential energy source.
Amending the Industry Research and Development Act 1986
There is also merit in the proposal discussed in the committee’s report, for an amendment to the Industry Research and Development Act 1986 (IRD Act) to be included in the scope of the CA bills, as proposed in the Australia Institute's submission. Programs delivered under the IRD Act framework may not be aligned with the bills, as they have given considerable support to fossil fuel industries, including for refineries, conventional gas, fracking, diesel storage, and carbon capture and storage initiatives.
To prevent ongoing considerable taxpayer support to fossil fuel industries, decisions under the IRD Act must be consistent with Australia’s international climate change law commitments and obligations.
Embedding climate science expertise in the Climate Change Authority
Lastly, the CCA will play a key role in implementing the bills, in advising the Minister on the climate change statement, as well as on current and future emissions reduction targets.
As noted in chapter 3 of the committee’s report, a number of submissions highlighted the importance of having climate scientists represented on the Authority. Although Australia's Chief Scientist is an Ex Officio Member, there is currently no requirement for other members to be experts in climate science.
It is essential that the Authority responsible for providing expert advice to the Minister has members that are experts in the field to guide its advice. This will help ensure that any information provided to the Minister is scientifically rigorous, up-to-date and authoritative.
The Authority’s founding legislation should be amended to require that at least two of its members have recognised expert experience and knowledge of climate change, and are recognised for this experience and knowledge by the wider community of climate scientists.
Recommendation
That the Climate Change (Consequential Legislation) Bill 2022 amends the following Acts as set out below:
the Offshore Petroleum and Greenhouse Gas Storage Act 2006 should be amended to require that decisions made under that Act are consistent with the emissions reductions targets set out in Section 10 of the Climate Change Bill 2022;
section 8 of the Australian Prudential Regulation Authority Act 1998 should be amended to note that the reference to financial safety and financial system stability includes a requirement for APRA to ensure coherence and alignment with Australia’s international climate change law commitments and obligations;
the Renewable Energy (Electricity) Act 2000 should be amended to exclude burning biomass from native forests as a source of renewable energy;
the Industry Research and Development Act 1986 should be amended to require that decisions made under that Act are consistent with Australia’s international climate change law commitments and obligations;
the Climate Change Authority Act 2011 should be amended to require that at least two Authority members have substantial experience or knowledge and significant standing in the field of climate science.