3.1
This chapter outlines the evidence received on the Climate Change Bill 2022 (the bill), including support for the bill and the following issues raised by witnesses and submitters:
setting emissions reduction targets in Commonwealth law;
the requirement that the Minister for Climate Change and Energy (the Minister) make an annual statement on climate change to Parliament;
the requirement that the Climate Change Authority (CCA) advise the Minister on the annual climate change statement;
the requirement that the CCA advise the Minister on the development of future greenhouse gas emissions reduction targets; and
regular independent reviews of the legislation.
Support for the bills
3.2
Overwhelmingly, submitters and witnesses expressed support for the objectives and provisions of the bills. As set out below, there was widespread agreement that the Australian Government should set clear emissions reduction targets, consistent with the Paris Agreement.
3.3
Nevertheless, there was a very small minority of submitters who opposed the bills. For instance, the Institute for Public Affairs stated that the bills would ‘risk imposing significant economic, social and humanitarian costs on Australians’.
3.4
Another objection to the bills came from Tamboran Resources which argued for the removal, from the bill’s objects clause, of references to the Paris 1.5 degree temperature goal:
Whilst the world still has the ability to avoid a 2°C temperature increase, it seems like a growing reality the world will exceed 1.5°C in the next few years regardless of what actions are taken, particularly from Australia's perspective.
3.5
Despite these opposing voices, there was widespread and near-unanimous support for the bills, along with recommendations for refinement, greater levels of ambition, and policy development in areas complementary to but beyond the scope of the bills. Organisations and specialists that support the bills include:
Australian Industry Group
Australian Industry Greenhouse Network
Business Council of Australia
Financial Services Council
Insurance Council of Australia
Investor Group on Climate Change
Australian Council of Trade Unions
Australian Manufacturing Workers Union
Australian Services Union
Australian Workers' Union
Construction, Forestry, Maritime, Mining and Energy Union
Energy and resources sector
Australian Energy Council
Australian Nuclear Association
Clean Energy Investor Group
Energy Networks Australia
Minerals Council of Australia
Agriculture and forestry sector
National Farmers' Federation
Australian Forest Products Association
Farmers for Climate Action
Australian Conservation Foundation
Environmental Defenders Office
Friends of the Earth Australia
Greenpeace Australia Pacific
Australian Council of Social Service
Australian Local Government Association
National Environmental Law Association
Researchers and academics
ARC Centre of Excellence for Climate Extremes
Australian Centre for Excellence in Antarctic Science
Australian Academy of Science
Melbourne Climate Futures
3.6
A more complete list is presented at Appendix 3.
3.7
The broad support for the bills was effectively captured by the Australian Climate Roundtable, comprising national bodies representing business, environment, farmers, investors, the social welfare sector and workers. The Australian Climate Roundtable submitted that the bills represented a substantial and positive step towards achieving several of the organisation's key principles for climate policy. The submission noted the following:
[The bills] set up clear national goals, a predictable process for evolving those goals over time, a useful transparency framework to assess progress, and a valuable avenue for independent advice and community consultation.
3.8
Further, the Australian Climate Roundtable submitted that the bills 'would establish clear targets and a durable basis for future reporting, advice and decision-making'.
3.9
The committee acknowledges the support of business and industry for the bills, including the Australian Chamber of Commerce and Industry, Australian Industry Group, the Business Council of Australia, and the Minerals Council of Australia.
Emissions reduction targets
3.10
In addition to the broad support for the bills overall, there was also strong endorsement of the 43 per cent by 2030 and net zero reduction by 2050 targets. Support for the targets focused on three key themes:
providing certainty to investors, business and industry;
creating opportunities in the renewable energy and manufacturing industries, including new export opportunities; and
fulfilling Australia's international commitments and sending a positive signal to international partners.
3.11
These three themes are each discussed, below.
Investor, business and industry certainty
3.12
Investors welcomed the certainty that legislated emissions reduction targets would provide. For example, the Financial Services Council (FSC) noted that, prior to the introduction of the bills, 'the lack of policy certainty has inhibited investment opportunity in Australia and the ability of funds to effectively manage climate risk'. The FSC proposed that 'government and the private sector both have important contributions to make toward the goal of emissions reduction to mitigate the risk of climate change'. In summary, the FSC stated that:
This Bill sets us in the right direction, assuring the Australian community that the Australian Government is committed to meeting Australia's Paris Agreement commitments. It helps provide confidence to the investment community that Australia is moving in the direction of a low carbon economy. We encourage all sides of politics to boost private sector confidence by supporting the Bill.
3.13
The National Australia Bank (NAB) also welcomed the certainty and positive signal that the bills represent for business investment:
Certainty on targets is crucial. The sooner we get to consensus about what 2030 looks like, the more efficient and effective investments will be. NAB supports clarity on measurement and reporting, which can help underpin transparency on progress. This is important for businesses in understanding and reporting their emissions. The legislation would provide additional rigour and transparency around government, sectoral and economy-wide progress, through the enhanced role of the Climate Change Authority and reporting obligations for Government.
3.14
Business stakeholders welcomed the bills and the level of consultation undertaken by government. The Business Council of Australia looked forward to the passage of the bills through the Senate and commended:
…the Government for working with business to deliver a workable plan to reduce emissions and strengthen Australia's economic future. This legislation brings Australia a step closer to ending the climate wars that have put a handbrake on progress and become a serious economic barrier. This legislation creates [the] policy framework for greater climate ambition, greater transparency around progress towards meeting that ambition, greater investment certainty and greater collaboration across the economy, all of which are critical to achieving a net zero economy by 2050.
3.15
The national industry association, Ai Group, welcomed the certainty that the bills provide for businesses:
Climate change policy needs to get more predictable, disciplined and transparent to underpin the business investment needed to meet our challenging climate goals, and the Federal Government's legislation tabled in Parliament today is a positive start. Transforming our energy systems and upgrading our industries for low- and zero-carbon production will take big long-lived investments starting now. Industry weighing up big decisions about where, when and how to invest need the clearest steer they can get about national goals and public policy.
3.16
Ai Group announced its support for the bills, stating:
…in their current form [the bills] represent a very big improvement on the status quo – and the broader the support they receive, the stronger the basis for investment will be and that will underpin our ability to meet other economic and social objectives including high employment growth and improving living standards.
3.17
The Australian Industry Greenhouse Network (AIGN), which represents a broad range of large emitters, also supported the bill. It noted 'the Government's need to balance the certainty provided with legislated targets against the need for an operating environment that makes space for private sector innovation in delivering abatement'. The AIGN also welcomed the certainty that the legislation would provide for investors:
Institutional stability through an enduring policy framework including a transparent and consistent approach to setting emissions reduction goals is important and can improve investor certainty.
3.18
The Clean Energy Investor Group welcomed the introduction of statutory emissions reduction targets, to focus government activities and funding on achieving the legislated targets:
The Climate Change Bills send a strong signal to private investors on the federal government's commitment to accelerate development of climate change related resilience, abatement and mitigation projects and programs, and will highlight the opportunity for private equity and debt to further contribute to these efforts with confidence.
3.19
The National Farmers' Federation (NFF) submitted that climate change is a significant concern for the agricultural sector. In a varied and challenging climate with bushfires, floods, and droughts, the continued success of the agricultural sector will depend on the ability to innovate and adapt to manage future climate risks:
The NFF recognises this is framework legislation that embeds a national 2030 and 2050 target in legislation and makes consequential amendments to related Acts. This provides a level of business certainty that is otherwise absent.
3.20
Google submitted that the bills would help to reduce emissions, decarbonise the economy, and improve sustainability:
As one of the world's largest corporate purchasers of renewable energy, we believe this legislation takes important steps to help Australia and the world decarbonise and ensure a sustainable future for all… We note the Government's strong commitment to sovereign capability, and look forward to continuing to support local industry and research organisations to deliver this.
3.21
The Department of Climate Change, Energy, the Environment and Water (DCCEEW) submitted that the bills would provide a clear framework for action and certainty for investors:
Increased policy certainty is in the interests of stakeholders across all sectors of the economy and moving towards a net zero economy by 2050 will generate substantial opportunities and employment. For example, the Investor Group on Climate Change (IGCC) has estimated there is potential for $131 billion in new technology and jobs in Australia by 2030.
3.22
The Department of Foreign Affairs and Trade (DFAT) submitted that legislated emissions reduction targets would make Australia a more attractive destination for foreign investment:
Legislation would give greater certainty to global investors and attract higher quality foreign investment, support trade opportunities and shape emerging trade and investment frameworks. Foreign investment support is a key driver of Australia's critical minerals, renewable and clean energy industries. This could support Australia's own transition, but also that of partners, particularly in the Indo-Pacific, by reinforcing Australia's reputation as a reliable, strategic partner and contributing to the scaling of key global supply chains on critical minerals, clean energy export industries and services expertise.
Energy and resources opportunities
3.23
Climate Analytics identified abundant opportunities for Australia's technological, industrial and manufacturing development:
Increased climate action in Australia will achieve a wide range of benefits and build on existing technologies and current market developments to achieve cost reductions, particularly for wind, solar and storage technologies by taking advantage of the country's extraordinary renewable energy resources…
By building on its extraordinary renewable energy resource and high skills base, Australia can become a regional and international frontrunner in successfully transitioning its energy system to zero carbon. The result will be more sustainable employment, reduced levels of air pollution, water demand and new manufacturing value chains and export opportunities based on zero emissions energy carriers including renewable electricity offshore, green hydrogen and energy intensive products such as green steel.
3.24
The Department of Industry, Science and Resources highlighted opportunities for export opportunities for Australia in renewable energy manufacturing and critical minerals:
Emissions reduction can help improve the international competitiveness and attractiveness of Australia's exports. And as the world pursues more ambitious targets, this will create new market opportunities for industries like hydrogen and critical minerals. For example, critical minerals are crucial to a range of clean energy technologies, including lithium ion batteries, solar panels, hydrogen fuel-cells, wind turbines and electric vehicles. Demand for critical minerals is expected to continue to grow rapidly and Australia's large reserves of natural commodities, established resources sector expertise, high environmental, social and governance standards and stable investment environment present an opportunity for Australia to contribute to the global transition to clean energy.
3.25
The Clean Energy Council (CEC) strongly supported the rapid passage of the bills through the Parliament. In its submission, the CEC said that legislated economy-wide emissions reduction targets would provide greater certainty to the renewable energy sector of Australia's decarbonisation pathway, and assist the sector to make investment decisions and deploy capital and infrastructure in a timely manner:
Australia's energy sector has been on a rollercoaster over the course of the past decade (and longer), and that turbulence has resulted in uncertainty about when and where to invest, higher levels of project risk, higher costs to electricity consumers, higher emissions, and a missed opportunity to build a long-term, skilled workforce and manufacturing sector to support a vibrant clean energy sector.
This Bill provides a framework that will underpin long-term investment confidence about our destination through the 43 per cent reduction by 2030 and net zero emissions target by 2050, and encourage a robust and transparent process for establishing the emissions trajectory along the way.
Climate diplomacy
3.26
Many submitters supported linking Australia's emissions reduction targets to our international obligations under the Paris Agreement. For example, AIGN:
… acknowledges the importance of the climate bill as a framing legislation for delivering Australia's commitments under the Paris Agreement. The bill relies on the Paris Agreement process of five-yearly Nationally Determined Contributions, marked by increasing ambition, as a path to meeting the legislated targets. Linking Australia's domestic emissions reduction trajectory with its international commitments is a rational approach. AIGN encourages the Government to continue to provide further clarity over the minutiae of this process, including timelines for when and how new interim targets will be announced. This will enable stakeholders to provide informed input and feedback in a timely manner.
3.27
DFAT submitted that the bills would strong signal to the global community that the government is committed to action and leadership on climate change:
The Government's climate change policy approach, including its intention to legislate, has been positively received by our key partners including in the Pacific, Europe, the Indo-Pacific and the United States.
Legislation would also strengthen our climate leadership internationally, particularly in the Pacific, with which Australia is exploring a possible bid to co-host a Conference of the Parties (COP). If passed before COP27, the legislation could provide a positive example to others of our commitment to climate action and would support our efforts to drive stronger international action on climate.
3.28
The National Environmental Law Association welcomed the government's decision to legislate a national emissions reduction target, and further noted that:
These Bills make an important statement about Australia's new focus on climate action, including to the international community and particularly to our neighbours in the Pacific region, who have been vocal in their criticism of Australia's limited efforts to date. These Bills also make a statement to Australian communities, industries and other economic actors, foreshadowing the new Government's commitment to acting on climate change.
Annual climate change statement
3.29
The bill would require the Minister to table an annual climate statement in Parliament, taking into account:
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.
3.30
There was widespread support for the requirement to produce an annual statement as an accountability mechanism. For example, the Clean Energy Investor Group submitted that:
…an annual climate change statement on the effectiveness of the Commonwealth's climate change policies…is an important accountability mechanism which will ensure that the government is acting in an evidence-based manner to the development of climate change programs and policy and that the parliament can hold the executive government to account accordingly.
3.31
DCCEEW outlined how the bill would increase accountability by requiring the Minister to make an annual statement to Parliament:
This statement will report on Australia's progress toward achieving its targets, relevant international developments, climate change policy, and the effectiveness of Commonwealth climate change policies.
3.32
Science and Technology Australia (STA) supported the bills, including the requirement for an annual climate change statement. The STA recommended that the statement include specific updates for industry sectors and an acknowledgement of key climate science developments since the previous statement.
3.33
Some submissions called for an assessment of Federal Budget measures on achieving emissions reduction targets. For example, the Australian Council of Social Service (ACOSS) noted that the Organisation for Economic Co-operation and Development had encouraged member nations to do 'green budgeting' and use assessment tools to measure and prioritise budget options against climate and environmental goals. Such impact statements could be conducted on proposed policies before implementation, or after implementation to inform decisions about whether to continue or adjust policies. ACOSS suggested several approaches for Australia:
The Climate Change (Consequential Amendments) Bill 2022 could be [amended] to require all government agencies to do an emission impact assessment on major budget lines. Or, be amended to require Treasury to provide an Emissions Reduction budget impact statement. Alternatively, the Climate Change Bill 2022 could be amended to require the Climate Change Authority to do a budgetary impact assessment on achieving emissions reductions target.
3.34
Climate Action Network Australia concurred with this approach, calling for carbon impact assessments that would require transparency around the impact Budget measures would have on greenhouse gas emission.
Advice on annual climate change statement
3.35
If the bill passes, the CCA would advise the Minister on the preparation of the annual climate change statement. The CCA could undertake public consultation in the preparation of this advice. The CCA would then publish the advice to the Minister on its website, followed by tabling in Parliament within 15 days of it being provided to the Minister.
3.36
DCCEEW also outlined the role the CCA would have in providing advice to the Minister:
The independent Climate Change Authority will provide advice to inform the Minister's statement, and the Minister must have regard to that advice. Where the Minister does not take the Climate Change Authority's advice, they must provide reasons for this and make this publicly available.
Proposals to expand the role for the Climate Change Authority
3.37
Several submitters argued for a broader role for the CCA. For instance, Professor Penny Sackett, Honorary Professor, Institute for Climate, Energy and Disaster Solutions, Australian National University, expressed strong support for the proposal:
… a strengthened, independent, statutory Climate Change Authority with funding and access to Government data, modelling and officials commensurate with increased duties and responsibilities. In addition, for increased effectiveness, provisions should allow the Authority regular access to Parliamentary committees related to climate change.
3.38
Professor Frank Jotzo, Head of Energy, Institute for Climate, Energy and Disaster Solutions, Australian National University, welcomed the strengthening of the CCA's advisory role:
… the strengthening of the role for the Climate Change Authority that is proposed in these bills is, from the point of view of best practice in climate policy and institutions, a desirable thing in terms of the strengthening more generally of independent institutions that can advise parliaments and governments.
3.39
AIGN supported an expanded role for the CCA, and recommended that it be allocated appropriate funding and resources to fulfil its increased responsibilities:
AIGN supports the climate bill provisions for yearly reports on progress to Parliament, as well as expanding the functions and resources of the Climate Change Authority to advisory and review capacities in relation to Australia's targets and our progress towards them. The Authority is a respected body that has established a good rapport with stakeholders, particularly through its wide-ranging and considered approach to consultation. AIGN looks forward to continued engagement with the Authority on matters relating to the bill in the coming years.
3.40
bp Australia supported the enhanced advisory role of the CCA as well as greater funding certainty:
The independent and [evidence-based] advice from the Climate Change Authority can support consecutive governments to chart Australia's path to net-zero by 2050. It will be important the Climate Change Authority is appropriately resourced to fulfil the functions as set out in the legislation.
3.41
The bill's Explanatory Memorandum notes that the government's Powering Australia plan includes a separate commitment to ensure the CCA is adequately resourced for all of its functions, which will be addressed through the government's budget process.
Science-based advice
3.42
A number of submissions emphasised the importance of science-based advice. For example, The ARC Centre of Excellence for Climate Extremes (CLEX) stated that the 'Climate Change Authority is an important focal point of climate science and must be underpinned by a strong evidentiary base in its deliberations'. CLEX submitted:
The production of an annual climate statement requires clear scientific understanding which should draw on the wealth of Australian and international climate science knowledge available. CLEX recommends that the Climate Change Authority maintains strong links to the whole of the scientific community and conduct a transparent and thorough process of evidence gathering and advice. CLEX is supportive of the strengthened role of the Climate Change Authority and stands ready to assist the Climate Change Authority in any capacity including the provision of expert and independent Australian climate science advice, use of their advice networks, scientists and researchers as well as policy advice.
3.43
The Australian Conservation Foundation emphasised that the CCA's advice must be science-based, informed by the latest available scientific evidence and data, and prepared by individuals with relevant scientific expertise.
Assessment of risk
3.44
Some evidence recommended that the CCA's advice should include an assessment of environmental, health, infrastructure, investment, and security risks from the impacts of climate change. For example, Professor David Karoly recommended that the annual climate statement assess and analyse the risks of climate change impacts to:
the health and wellbeing of vulnerable communities;
essential energy, transport and communication infrastructure;
key industry sectors and employment outcomes; and
Australia's security interests.
3.45
Regarding environmental impacts, the Wilderness Society recommended that:
The most simple way to incorporate climate physical risks to natural values would be to ensure that the Environment Minister is required to commission and present an assessment of how various climate scenarios would likely impact on the suite of Matters of National Environment Significance such as World Heritage and [Ramsar Convention on Wetlands] Sites, and Endangered Species and their habitats.
3.46
The FSC submitted that it was taking a similar approach to risk assessment in its advice to fund managers. The FSC's Guidance Note on climate risk disclosure supports members who choose to adopt a 2050 net zero target for their investment portfolios in line with the Paris Agreement. The FSC's baseline expectation for the funds management industry is to report climate risks and opportunities to business operations:
Many funds are undertaking scenario analysis. This helps to assess their net zero alignment and whether their investments are aligned with the goal of keeping temperature at well under 2 degrees above pre-industrial levels. It also helps to identify climate related risks and opportunities for investments under different climate scenarios.
The development of future targets
A floor, not a ceiling
3.47
The 43 per cent target is intended to set a floor for Australia's emission reduction, and is expected to be replaced by more ambitious targets in the future. In his speech introducing the bill, Minister for Climate Change and Energy, the Hon Chris Bowen MP said:
…43 per cent is not a limit on our emissions ambition. On the contrary, as we've said repeatedly, we see 43 per cent as a floor on what our country can achieve.
3.48
Many submitters supported the 43 per cent target as a floor for emissions reduction and the development of more ambitious targets in the future. For example, the Australian Climate Roundtable welcomed the government's intention to set a floor for emissions reduction and subsequently revise targets based on the CCA's advice:
They prescribe a target of reducing emissions by at least 43% from 2005 levels by 2030; set a goal of net zero emissions by 2050; and outline processes for advice and decision on amended and further targets that draw on the goals and requirements of the Paris Agreement. The targets serve as a floor beneath ambition without constraining the ability of governments and Parliaments, acting on appropriate advice and public consultation, to further strengthen ambition and achievement.
3.49
The Business Council of Australia gave evidence that its members welcomed the 43 per cent target, and the government's intention to implement more ambitious targets in the future:
Importantly, this legislation lays the policy foundation for greater climate ambition going forward and greater transparency around progress towards meeting that ambition, both of which are critical to achieving a net zero economy by 2050.
We note that the net zero commitments are now the norm for Australian businesses. Some 70 per cent of the ASX 200's collective market capitalisation have adopted net zero commitments. This represents 95 companies, which is almost double the number it was in March 2021. This momentum is entirely consistent with the 43 per cent by 2030 target being set as a floor rather than a ceiling in the legislation. The business community will continue to accelerate action on decarbonisation, and this legislation greatly facilitates their task by reducing policy risk and uncertainty.
3.50
The FSC submitted that it was important for the 43 per cent target to act as a minimum standard, with more ambitious targets to be set over time in accordance with the ratchet mechanism in the Paris Agreement.
3.51
The Australian Council of Trade Unions acknowledged the importance of the 43 per cent target as a floor on ambition, rather than a ceiling, and supported the option for improved emissions reduction targets in future.
3.52
The CEC agreed that the legislated target should be a floor rather than a ceiling for Australia's emissions reduction ambitions.
3.53
Engineers Australia also supported the principle inherent in the bills that the 43 per cent target sets a baseline for ambition:
Engineers Australia's members recognise that the 43 per cent target serves as a floor and not a ceiling when it comes to reducing emissions, and that the types of legal arrangements set out in these two bills can give strong effect to enhanced climate action. This includes more deeply embedding in, and accounting for, climate change in both private and public sector investment decisions as well as by all levels of governments (and agencies) having regard for their policy and programmatic relevance in all future advice, developments, administration, approvals and decisions.
3.54
Environment organisations such as Greenpeace and the Environmental Defenders Office supported a 2030 reduction target of 74 per cent relative to 2005 emissions, and net zero by 2035. This view was summarised by WWF‑Australia, which urged the government to consider legislating an increased target as soon as possible:
WWF-Australia notes that the present target is worded as a floor, and not a ceiling on ambition. We urge the Government to consider legislating a more ambitious target, in line with the current science as soon as possible in order to protect Australia from the impacts of climate change. WWF‑Australia recently commissioned a report that found that for Australia to meet its obligations to pursue efforts to limit warming to 1.5°C, a 2030 reduction of 74% relative to 2005 emissions, and net zero by 2035 is consistent with a 50% chance of staying below 1.5°C.
3.55
The Peoples Climate Assembly congratulated the government on increasing Australia's emissions reduction target, but encouraged improved targets over time:
… a dangerously low bar [26–28 per cent by 2030] was set by the previous government. We know that 43% is insufficient and now is the time that we need stretch targets not just 'better-than' targets. It must be made clear in the legislation that this is a floor, an absolute minimum that all levels of government should be looking to exceed by some considerable margin.
Australia's fair share of global emissions reductions
3.56
Greenpeace Australia Pacific submitted that, given Australia's relative wealth, a 'fair share' in emissions reductions should entail 'emissions reductions greater than the global average'. Greenpeace proposed that Australia should increase emissions reductions to at least 75 per cent by 2030 if Australia was to ensure it was doing its 'fair share'.
3.57
Climate Analytics submitted that a 'fair share' contribution by Australia would include climate finance for poorer countries or further domestic emissions reductions beyond the Nationally Determined Contribution (NDC). Climate Analytics proposed that reasonable national and state-level emissions reduction targets could be 'derived from global integrated assessment and energy model scenarios'.
Climate Change Authority advice on future targets
3.58
The bill would require 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 NDCs at least once every five years, but is not required to seek advice on targets for adjusted NDCs.
3.59
Many submissions welcomed the increased role for the CCA in providing advice on future targets. For example, Professor Penny Sackett submitted that:
I support the Authority's legislated ability to provide unsolicited, unconstrained advice to the Government. More specifically, I support the Authority being tasked with advising the Government on the adequacy of current GHG emission targets and progress toward…achieving those targets annually, through a public report. Additionally, the Authority should make evidence-based recommendations for future increased targets, and opportunities, mechanisms and barriers to meeting them. In light of changing circumstances and information, these recommendations should be reviewed periodically (every two years, say), and made public.
3.60
The Australia Institute submitted that the CCA would be well placed to provide advice on future targets:
The Bills are a valuable framework to ensure transparency and accountability of Australia's greenhouse gas emissions reduction targets, including by ensuring the provision of evidence-based advice from the Climate Change Authority to inform future targets and increased ambition.
3.61
Climateworks submitted that it supported the additional functions for the CCA to provide regular and transparent advice on progress and target setting. It also recommended strengthening the role of the CCA:
…parties to the Paris Agreement have already agreed that they should revisit their current NDCs over the next few years with a view to making them more ambitious.
These frequent target revisions would be bolstered with the Climate Change Authority's expert advice in each instance. This could be achieved by providing that the Climate Change Authority shall provide (rather than may be requested to provide) advice to the Minister in relation to Australia's targets.
It is currently implicit in the Climate Change Bill that each time a new NDC is set, the current NDC could be reviewed too. For example, in two years the Government will be asked to submit its NDC for 2035. At this point, it would be best practice for the current 2030 target to be assessed with consideration given as to whether it needs to be adjusted. Ideally, the framework climate legislation would expressly provide for this, and be clear that the Climate Change Authority, in providing advice to the Minister, shall provide advice on both the new NDC and the NDC that is currently on foot.
3.62
ACOSS called for Australia's legislated emissions reduction targets to reflect updated NDCs:
The greenhouse gas emissions reduction targets that will be enshrined in the legislated Climate Change Act 2022, will not automatically get updated when Australia increases its National Determined Contribution (NDC) directly under the Paris Agreement. Nor is there a mechanism by which the targets may be updated through a legislative instrument.
This is problematic as the remainder of the clauses including the progress reports delivered in annual climate change statements and the actions of the agencies covered under the Climate Change (Consequential Amendments) Bill 2022, will remain connected to the legislated target. Any new or updated targets via the NDC process will require an amendment to the existing legislation.
3.63
Mr Tim Reed, President of the Business Council of Australia, said an increased NDC not being reflected in the legislated targets would not necessarily be a concern for businesses or investors:
If we have a legislated target and then the government of the day chooses to increase our commitment without coming back to the parliament, I don't think that creates a problem if it's in the framework that [Jennifer Westacott] spoke about earlier, if it's in line with the Climate Change Authority doing their work, if it is part of a process that government is working through. For business, the sooner we get to longer-term targets, the more confidence there will be. We would be very encouraging of a 2035 target and of ongoing reviews that periodically look at those targets and, where possible, increase the ambition. I don't think that would cause a big problem. What will cause a large problem is when there is great divergence, particularly across the main political parties, as to what would happen in the instance of a change of government.
3.64
The Law Council of Australia noted that, while the Minister is required to seek the CCA's advice on a new NDC at least once every five years, the Minister is not required to seek the CCA's advice on adjusted targets:
It is an object of the Bill to 'ensure' that the Authority's advice informs the targets to be included in an adjusted NDC and there may be a question as to whether that objective can be properly pursued when the Bill does not require the Minister to seek that advice. Assuming the absence of an obligation is by design, perhaps on the basis that it would be reasonable not to seek the advice in certain circumstances, it is notable that the Bill does not regulate when the Minister may decide not to seek that advice.
3.65
The Law Council of Australia also noted that under the proposed bill, the advice of the CCA would be limited to only Article 2 of the Paris Agreement, which includes the 1.5 degrees and 2 degrees global temperature thresholds, to the exclusion of other relevant articles.
3.66
The Australian Academy of Science called for Australia's emissions reduction targets to be increased to be consistent with the goals of the Paris Agreement. The Academy emphasised that evidence-based policy mechanisms are essential for ensuring meaningful pathways of emissions reduction:
Australia's [NDCs] need to be accompanied by scientifically feasible plans of action to reduce Australia's emissions in a fair but meaningful way. The mechanisms informing Australia's emissions reduction pathways need to be robust and evidence-based to achieve the tangible outcomes intended by the targets. The Climate Change Authority (CCA), in its role as adviser to the government, will need to call on experts so it can synthesise the available evidence and make evidence-informed recommendations to government. The Academy will be pleased to work with the CCA and to support it in its essential purpose.
Public consultation on future targets
3.67
Submitters and witnesses widely expressed strong support for public consultation on the development of new and adjusted emissions reduction targets, consistent with Australia's international obligations under the Paris Agreement.
3.68
The Australian Climate Roundtable welcomed the public consultation provisions of the bill, submitting that the bills:
… set up clear national goals, a predictable process for evolving those goals over time, a useful transparency framework to assess progress, and a valuable avenue for independent advice and community consultation.
3.69
Engineers Australia supported public consultations as a valuable complement to existing accountability mechanisms:
Through affording a greater level of public scrutiny via mandated public consultations and reporting requirements that complement the existing mandatory reporting arrangements under [the National Greenhouse and Energy Reporting Scheme] and the like, these bills will help broaden the community voice on the impact and sufficiency (or otherwise) of individual measures as well as in aggregate to achieve Australia's emissions reduction targets in a manner consistent with the specified guiding principles (which Engineers Australia supports) as well as broader climate objectives (i.e., adaptation and resilience).
3.70
Professor Frank Jotzo called for the CCA's public consultation on the emissions reduction target to facilitate a well-informed national conversation by actively involving a wide range of stakeholder groups and engaging in sustained public outreach:
The emissions target is a decision that affects many aspects of Australia's economy and society, and has in the past been the subject of intense political contestation. The more inclusive the process of crafting the advice, the better the chances for broad agreement, which in turn may be necessary politically to underpin policy measures necessary to attain those targets.
Independent reviews of the legislative framework
3.71
The bill would require periodic reviews of the operation of the legislation. The first review would need to be completed within five years of the legislation commencing. Further reviews would be completed every ten years thereafter. Each review would provide for public consultation. A report from each review would be tabled in Parliament.
3.72
The committee notes that this review process is designed to examine the technical operation of the legislation itself, and is not framed as a review of the adequacy of the emissions reduction targets, nor the progress towards achieving the targets.
3.73
In evidence received at a public hearing, the Australian Industry Group affirmed its support for the review process:
We consider the bills to be consistent with some key principles of climate policy that Ai Group has adopted together with other participants in the Australian climate roundtable, including consistency with the pursuit of the global goal of holding emissions and climate change to well below two degrees and making efforts toward 1½ degrees, securing some stability in policy and ambition over time, having a more disciplined administration of policy and establishing regular review points.
3.74
The National Environmental Law Association (NELA) was supportive of regular reviews of the legislation and called them to be made more frequent than provided for in the bills:
…these Bills, when in force, ought to be reviewed more regularly than every five years. NELA submits that every two years would be a more appropriate timeframe for mandatory reviews.
Committee view
3.75
The committee notes the strong and widespread support for the Climate Change bills, from organisations and interest groups representing all facets of the Australian economy and society. The committee is grateful to the large number of organisations and individuals who made submissions and gave evidence at hearings.
3.76
The government has introduced the bills to ensure that Australia's emissions reduction targets are not only recorded in international settings, but are clearly expressed in Commonwealth law. If passed, the targets will entrench in domestic legislation Australia's contribution to the global goals of the Paris Agreement. This will provide much needed investment certainty for international capital markets and create new market opportunities for manufacturing and industry in Australia. The bill will also enhance transparency and accountability through an annual climate change statement to Parliament given by the Minister. The CCA will provide advice to the Minister on the annual climate change statement and the development of new and adjusted NDCs under the Paris Agreement.
3.77
Throughout the inquiry, there was overwhelming support for these objectives. Businesses, investors, environmental organisations, unions, researchers, academics, communities and most individuals have welcomed the certainty that the bills would provide.
3.78
The committee acknowledges that the bills honour an election commitment of the Albanese government which received a mandate at the 2022 Federal election.
3.79
The committee notes that the bills establish a framework for achieving Australia's emissions reduction goals. The committee expects more sector-specific detail to be introduced in subsequent legislation, funding announcements, and policy developments.
3.80
The committee supports the Minister's commitment that the targets in the bill represent a floor not a ceiling for Australia's climate ambition. These bills would allow Australia to meet or exceed the targets and set new, more ambitious targets in accordance with the Australia's international obligations under the Paris Agreement.
3.81
The committee notes a range of other government initiatives, which are already in train, to underpin the framework provided by the bills, including:
consulting on options to reform the safeguard mechanism to help industry reduce emissions in line with Australia's climate targets and strengthen our economic competitiveness in a decarbonising global economy;
developing a National Electric Vehicle Strategy in collaboration with state and territory governments, and the removal of fringe benefits tax and the five per cent import tariff for eligible electric vehicles;
working with state and territory governments to increase the share of renewables in the National Electricity Market by 2030 under the Powering Australia plan;
investing $20 billion for urgent upgrades of the electricity grid so it can handle more renewable power under the Rewiring the Nation plan;
appointing an independent panel to review the integrity of Australian Carbon Credit Units, led by former Chief Scientist Professor Ian Chubb;
responding to Professor Graeme Samuel's review of the Environment Protection and Biodiversity Conservation Act 1999 by the end of 2022 with a view to bringing legislation into Parliament in 2023 and consulting on the development of national environmental standards; and
the impending release of a proposal for an independent Federal Environment Protection Authority.
3.82
Finally, the committee supports the genuinely collaborative manner in which Minister Bowen has approached the passage of the bills through the House of Representatives. The committee encourages the same respectful process in the Senate debate.
3.83
On this basis and for the reasons outlined above, the committee supports the passage of the Climate Change bill.
3.84
The committee recommends that the Senate pass the Climate Change Bill 2022.