Summary
Coalition Senators do not support either the Climate Change Bill 2022 or the Climate Change Bill (Consequential Amendments) Bill 2022.
Coalition Senators believe the consultation process failed to properly account for rural and regional perspectives.
Coalition Senators believe that this legislation will invite green activists to abuse our legal system for political purposes, challenging what they class as high emissions projects.
Coalition Senators believe this legislation will inhibit our national security objectives in the Pacific by reducing Export Finance Australia's flexibility.
Coalition Senators believe that this legislation could restrict certain projects being supported by Government in the future, blocking job creation, hampering our national security objectives, undermining our competitive advantage, and inhibiting export opportunities.
Coalition Senators believe that this Bill will have an unacceptable social justice impact. Specific communities could be disproportionately affected. These Bills do nothing to ensure a fair transition and removes the Productivity Commission's 5-year review into the socio-economic impact of our Nationally Determined Contribution.
Coalition Senators do not believe the Government has an achievable plan to firm 82 per cent renewables by 2030.
Coalition Senators believe that this legislation is not equitable or fair. It does not include an assessment of the economic cost of higher power bills. It gives no bearing to lower socio-economic communities and how rising energy prices may affect them.
Coalition Senators believe the Labor Government's refusal to engage in conversation on the possibility of nuclear power in Australia is disingenuous and ideologically based.
Consultation
Stakeholders such as the Australian Forest Products Association have raised concerns with the legislation as it relates to consultation.
The Department of Agriculture, Fisheries and Forestry was not consulted formally on the Climate Change (Consequential Amendments) Bill 2022 prior to its introduction.
Coalition Senators are concerned that the consultation has not properly accounted for rural and regional perspectives.
These concerns are bolstered by evidence from the Department of Climate Change, Energy, the Environment and Water and the Department of Agriculture, Fisheries and Forestry admitting that they have done no modelling on the impacts of the Climate Change Bill 2022 and the Climate Change (Consequential Amendments) Bill 2022 on rural and regional Australia.
Hence these Bills could have serious unintended consequences for those in rural and regional Australia. Coalition Senators believe this to be a significant oversight of the Government.
The introduction of the Climate Change Bill 2022 and the Climate Change (Consequential Amendments) Bill 2022 has been rushed, failing to account for key stakeholders in the creation of these Bills.
Coalition Senators believe the undue rush on the part of the Government reflects an attempt to stifle public discussion with the aim of influencing political outcomes and obviating genuine criticism and differing perspectives.
Coalition Senators believe that the inquiry process has been constructed in a similarly rushed fashion, seeking to once again obviate genuine criticism and differing perspectives.
Coalition Senators believe rigorous consultation, modelling, and social impact assessments have been overlooked in the drafting and introduction of these Bills.
Lawfare
Coalition Senators believe these Bills will invite vexatious green activism in the courts.
Coalition Senators note experiences in other countries, where emissions reductions targets have been codified into law, shows there have been serious consequences of green legal activism.
In the UK, critical infrastructure projects have been delayed through legal challenges in the courts system, only to be overturned on appeal.
Activists in the UK have challenged crucial projects such as a new high-speed rail network.
Activists in the UK have challenged government decisions to invest in the maintenance and the construction of new roads because this could lead to increased traffic and thus greater emissions.
Activists in the UK delayed a third runway at Heathrow Airport for years by challenging it in the courts system.
In France, the government has been told it will be subject to pecuniary penalties if it does not take all necessary measures on climate change by the end of 2022.
In Germany, the courts ordered the government to increase its emissions reduction targets in an April 2021 decision.
Environmental groups which provided evidence to the Committee refused to rule out using this legislation to challenge agriculture, primary producing, infrastructure, energy, resources, or forestry projects.
Evidence was also provided to the Committee that this legislation would in fact encourage green activism in the Australian courts system.
Coalition Senators believe this is an unacceptable outcome and could impact on access to justice if the court system were to be bombarded with vexatious challenges to crucial projects.
Coalition Senators believe that laws which these Bills enable will open up critical infrastructure projects to challenges – for example, Western Sydney Airport or major road upgrades – and this would be unacceptable. This has been the experience in the UK.
National Security Objectives
Coalition Senators believe this legislation will inhibit Australia's national security objectives in the Pacific.
Export Finance Australia (EFA) provides critical support to projects which advance our national interest in the Pacific.
Requiring EFA to have additional considerations as triggered by these Bills provides the potential for future projects to be prevented on that basis.
Limiting EFA's flexibility is a short-sighted action. If we do not support crucial projects in the Pacific, other countries will do so in our stead.
At a time when of heightened tensions in the region, including a more assertive People's Republic of China, the Coalition believes reducing EFA's flexibility is not in our national interest.
Job Creation, Export Opportunities and Australia's Competitive Advantage
These Bills could restrict the Northern Australia Infrastructure Facility from supporting an expansion of our traditional export industries, particularly energy and agriculture.
These Bills could restrict Infrastructure Australia from recommending projects which are emissions intensive to Government, potentially delaying, or stopping altogether, important pipeline projects.
Coalition Senators are concerned that the above agencies may have reduced capacity to support projects which embody significant aspects of our competitive advantage.
Coalition Senators believe that inhibiting our country from utilising our natural advantage in resources and energy is a mistake.
Coalition Senators believe that restricting the above agencies and their ability to support various projects may also impact on their ability to support critical minerals projects due to their emissions profile.
This would discourage our economy from producing materials which are crucial to the processing and production of renewable technology, costing jobs and ruining potential job creation opportunities.
Coalition Senators believe that the mining of critical minerals should be encouraged in order to bolster local manufacturing and begin to diversify the origin of renewable technology that enters our grid.
Coalition Senators are also gravely concerned that Infrastructure Australia could not explain the consequences of the Bills on their own decision making. The agency could not explain how they would weigh the emissions of applicant projects versus the job creation opportunities.
When asked repeatedly how this legislation would alter Infrastructure Australia's decision making, officials stated: 'We're still determining that' and 'We are receiving advice on it at the moment'.
Coalition Senators are deeply concerned that the Government would ask Parliament to vote on legislation when affected agencies have not yet determined how it will impact on their decision making.
Coalition Senators will not support these Bills because they may restrict government agencies from supporting critical projects based on their emissions profile.
Coalition Senators cannot and will not support Government Bills when affected agencies cannot explain how the legislation will impact their decision making.
Coalition Senators believe these Bills could undermine our national security objectives, our competitive advantages, job creation, infrastructure investment and exporting opportunities.
Regional Communities
These Bills will disproportionately impact regional communities which rely on energy intensive industries.
The Government has failed to ensure regional communities are not adversely impacted by these Bills.
Coalition Senators cannot support these Bills given they offer no safeguards for those most vulnerable to the impacts of their implementation
The Department of Climate Change, Energy, Environment and Water has admitted it has not undertaken any modelling on how these Bills will impact regional and rural Australia.
The Department of Agriculture, Fisheries and Forestry also admitted that it has not undertaken any modelling of the impact of these Bills on rural and regional Australia.
Coalition Senators note that these Bills will work in concert with the Government's plan to protect 30 per cent of land by 2030, having a disproportionate impact on regional communities.
Coalition Senators are concerned that the agricultural industry will be subject to severe externalities from both these measures.
The Committee heard testimony that farmers are already troubled by the land already locked up by governments.
The National Farmers Federation told the Committee that: 'Farmers are really concerned that there must be adequate resources to properly manage these areas that are going to be used for public land.'
Coalition Senators are concerned that legislating an emissions reductions target in concert with the Government's '30 by 30' target will only make matters worse for regional areas.
Coalition Senators believe that the Government is taking various actions which will disproportionately affect rural and regional areas without any simultaneous action to remedy the impact.
Other nations around the world have sought to minimise the externalities caused by emissions reductions strategies and environmental policies.
The EU for example provides generous support to regional communities affected by such legislation through their Just Transition Fund.
Stakeholders such as the Australian Council of Trade Unions also raised this issue at Committee hearings, arguing that the remit of the Bills was 'narrow' and stated there was 'an opportunity to embed a principle around just transition in this bill'.
Coalition Senators believe that removing the Productivity Commissions 5-year review into the socio-economic impacts of our nationally determined contribution will also disproportionately affect rural and regional communities.
The Government is seeking to silence concerns surrounding the social impacts of emissions reductions targets on communities.
Coalition Senators believe this is a deliberate attempt on the part of the Government to hide from criticism and remove the ability of many people living in rural and regional areas to have their voices heard on how these Bills may negatively impact their lives.
Coalition Senators, as representatives of many regional and rural areas, will not support legislation which could increase the disproportionate impact on those communities, with no safeguards or regular insight into the socio-economic impact.
Policy Basis of the 43 per cent Target
The Government's target of 43 per cent includes a plan to have 82 per cent renewables by 2030.
The Committee received evidence that this plan would lead to an increase in power bills.
Furthermore, the variability of renewables cannot be firmed by current battery storage technology. The Committee heard evidence that current battery technology could power a city the size of Sydney for 'seconds' if the grid failed.
One of the policy foundations for the target is the Government's commitment of 82 per cent renewables by 2030.
Coalition Senators have read evidence which casts serious doubt on the Labor Government's ability to deliver on its commitment to 82 per cent renewables by 2030.
Nuclear for Climate Australia stated that from their reading of the Climate Change (Consequential Amendments) Bill 2022, 'it's intended that emissions reductions in electricity generation throughout all sectors of the economy be achieved using renewables with storage. In view of the embodied carbon emissions in wind, solar and storage devices it is physically impossible to achieve net zero using these devices. Their constant replacement, weather dependency and lack of reliability will render methods of negative emissions such as carbon sequestration or atmospheric removal entirely uneconomic.'
Coalition Senators are concerned that a key pillar of this legislation's end goal is not achievable under the Labor Government's current plan.
The Economic of Higher Power Bills
When residential electricity prices increase, those most impacted are Australians in lower socio-economic groupings.
For Australians under constant cost-of-living pressures, any rise in power bills will have a detrimental impact on their lives.
This legislation fails to address the economic cost of rising power bills.
Coalition Senators believe a primary responsibility of energy policy is to ensure people can keep the lights on and, further, can afford to keep the lights on.
Coalition Senators will not support legislation which fails to give consideration to the economic impact of altering our national energy policy.
Nuclear Energy
The Government plans to deliver a 43 per cent reduction in emissions by 2030, by achieving 82 per cent renewables in the grid.
Given the Government's focus on reducing emissions, Coalition members believe its refusal to engage in a conversation on the prospects for nuclear power is ideological.
The Committee heard evidence that nuclear energy is cheaper at a system levelized cost than renewables.
The Committee received evidence that nuclear energy has lower life cycle emissions than renewables.
Coalition Senators urge the Government to have a mature conversation on the viability of nuclear power in Australia.
Recommendation
Recommendation
The Climate Change Bill 2022 and the Climate Change (Consequential Amendments) Bill 2022 should not be passed.
Senator Hollie Hughes
Member
Senator Ross Cadell
Member
Senator the Hon Bridget McKenzie
Participating Member