Climate Change Authority (Abolition) Bill 2013

Bills Digest no. 25 2013–14

PDF version  [750KB]

WARNING: This Digest was prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments. This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Anita Talberg and Kate Loynes
Science, Technology, Environment and Resources Section
9 December 2013

Contents

The Bills Digest at a glance
Purpose of the Bill
Structure of the Bill
Background
Committee consideration
Statement of Compatibility with Human Rights
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Key issues and provisions
Other provisions
Concluding comments
Appendix 

 

Date introduced:  13 November 2013
House:  House of Representatives
Portfolio:  Environment
Commencement: Various dates, as set out in clause 2 of the Bill.
Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through http://www.aph.gov.au/Parliamentary_Business/Bills_Legislation

The Bills Digest at a glance

What the Bill does

The Bill is one of a package of 11 Bills that repeal the carbon pricing mechanism (CPM) and associated measures.

The Bill is one of a package of 11 Bills that repeal the carbon pricing mechanism (CPM) and associated measures.

The Bill abolishes the Climate Change Authority (the Authority), and transfers to the Minister the responsibility for ensuring that all of the Authority’s periodic reviews are carried out. These reviews cover:

  • the Carbon Farming Initiative (CFI): a scheme for farmers and landowners to voluntarily reduce greenhouse gas emissions and be rewarded with carbon credits
  • the National Greenhouse and Energy Reporting Scheme (NGERS): a framework for monitoring and reporting on companies’ greenhouse gas emissions and energy use and
  • the Renewable Energy Target (RET) scheme: a market mechanism that puts a requirement on electricity retailers to surrender annually a certain number of Renewable Energy Certificates (RECs), where each REC represents one megawatt-hour of electricity generated from renewable sources.

The Bill also makes some changes to the scope and timing of these reviews.

Why the Bill was introduced

The Government considers that the Authority exists mainly to service the CPM. That being the case there is no value in retaining the Authority once the CPM has been repealed.

What the issues are

The Authority provides non-partisan climate policy advice based on the science. Its removal, and the transferral of its review function to the direction of the Minister, may affect the perception of transparency in the design of climate policy mechanisms.

The Bill removes any mention that reviews of the CFI, NGERS and RET may make recommendations to the Minister. This potentially dilutes the effect of those reviews.

The Bill alters the timing of two of those reviews being:

  • the RET review, which was to become quadrennial, is to be biennial. The renewable energy industry claims that this creates investment uncertainty for the sector and
  • the first CFI review is delayed by two years to 2016. This removes the opportunity to assess the success of the scheme, which is to form a major component of the Government’s proposed scheme for replacing the CPM.

Purpose of the Bill

The purpose of the Climate Change Authority (Abolition) Bill 2013 (the Bill) is to abolish the Climate Change Authority (the Authority) and the Land Sector Carbon & Biodiversity Board (LSCBB) and to assign to the Minister responsibility for ensuring that certain tasks are undertaken that have been, until now, undertaken by those bodies.

Structure of the Bill

The Bills contains three Parts:

  • Part 1 repeals the Climate Change Authority Act 2011 in its entirety[1]
  • Part 2 amends:

-  the Clean Energy Act 2011 so that the Authority does not conduct periodic reviews under that Act[2]
-  the Carbon Credits (Carbon Farming Initiative) Act 2011,[3] the National Greenhouse and Energy Reporting Act 2007 [4]and the Renewable Energy (Electricity) Act 2000[5] so that certain reviews formerly undertaken by the Authority will be undertaken by the Minister
-  the Australian Securities and Investments Commission Act 2001,[6] the Clean Energy Regulator Act 2011,[7] the Competition and Consumer Act 2010[8] and the Financial Management and Accountability Regulations 1997[9] to delete references to the Authority

  • Part 3 establishes transitional arrangements for the transfer of Authority responsibilities and property.

Structure of the broader legislative package

The broader carbon price repeal package comprises 11 Bills. The purpose of these Bills is to repeal the arrangements implemented by the former government to establish the carbon price mechanism (CPM).

The CPM is a framework that internalises into the cost of production of certain goods and services, the cost on the economy of greenhouse gas emissions resulting from that production. For this framework, architecture for an emissions trading scheme was established. This comprised a period during which carbon prices would be fixed (2012 to 2015), and a period during which the carbon price would fluctuate with market forces (from 1 July 2015). To support the framework several new government agencies were established. Income tax and transfer payments were also changed. This was to compensate households for the expected higher costs of living.

Among the 11 Bills, five amend existing legislation to remove the equivalent carbon price imposed on aviation fuels and synthetic greenhouse gases. One Bill (the subject of this Digest) abolishes the Authority and transfers some of its functions to the Department of the Environment. One Bill repeals legislated income tax cuts that were part of compensation arrangements upon the implementation of the flexible price period from 1 July 2015. A final Bill abolishes the Clean Energy Finance Corporation (CEFC).

Not all aspects of the CPM are dismantled. For example, the registry established under the CPM to record and manage carbon credits is maintained but amended to reduce its function. Similar, the Clean Energy Regulator (CER), which administers the CPM, is maintained but with reduced and altered functions.

The 11 separate Bills, which cover five main areas associated with the repeal, are set out in Appendix 1 of this Bills Digest.[10]

Background

The Authority is a statutory body that was created as part of the former Government’s CPM. The purpose of the Authority is to ‘provide independent advice to the Government on pollution caps, carbon budgets, the credibility of international units, the performance of the carbon pricing mechanism and review other climate change mitigation initiatives’.[11]

The recently elected Abbott Government has introduced legislation to repeal the CPM.[12] The rationale for this Bill is that the Government considers that the Authority exists mainly to service the CPM. That being the case, there is no value in retaining the Authority once the CPM has been repealed.[13]

Committee consideration

Senate Standing Committee on Environment and Communications

The 11 Bills, including this Bill, were referred to the Senate Standing Committee on Environment and Communications (the Environment and Communications Committee) for inquiry and report by 2 December 2013.[14]

According to the Senate Standing Committee for the Selection of Bills, the reasons for referral were:

The Carbon Tax has significantly impacted Australian households and businesses. The Committee will review the Bills and report to the Senate on: costs to households and businesses from Labor's Carbon Tax; and the impact of the Carbon Tax on business costs including mining, manufacturing and small business.

To ensure proper scrutiny of these Bills and their impact on Australia's efforts to tackle climate change and carbon pollution.[15]

Of the 37 submissions received by the Environment and Communications Committee, most did not comment on the abolition of the Authority.[16] Of those that did, 11 did not support the Bill and two suggested that, in the absence of the Authority, another agency (such as the Productivity Commission) would be needed to provide an independent review of the Renewable Energy Target (RET) scheme in 2014.[17]

The Environment and Communications Committee recommended that the Bills be passed.[18] Senators from the Australian Labor Party (ALP) authored a dissenting report, which claimed that:

Subsuming the functions of the Climate Change Authority into the Department of Environment is likely to lead to less transparency in this highly political area of public policy. We believe that the risks are too great to abolish this independent institution.[19]

Senators from the Australian Greens also authored a dissenting report, expressing their opposition to the abolition of the Authority.[20] Independent Senator, Nick Xenophon, included additional comments in the report but did not specifically comment on the abolition of the Authority.[21]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills had no comment on the Bill.[22]

Parliamentary Joint Committee on Human Rights

At the time of writing, the Parliamentary Joint Committee on Human Rights has not reported on the package of Bills.

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act.[23] The Government considers that the Bill is compatible.

Policy position of non-government parties/independents

As noted in the Environment and Communications Committee’s inquiry report, both the ALP and the Australian Greens oppose the entire CPM repeal package, including this Bill, and have said that they will vote against it.[24]

The views of Senator Madigan of the Democratic Labor Party and independent Senator Xenophon are not clear in respect of this Bill. In his additional comments to the Environment and Communications Committee’s report Senator Xenophon did not raise concern with the abolition of the Authority. Both Senators Madigan and Xenophon voted against the passage of the originating Bill which established the Authority in 2011. However that Bill was one of a package of 18 Bills that were voted on cognately.[25] As such, it is unclear whether the Senators voted against the Bill that established the Authority specifically, or only by association with the rest of the package.

A new Senate begins on 1 July 2014. The views of Senators-elect in relation to this Bill are not known. Again, this is because the Bill is one of a package of 11 Bills and the political debate has not focussed heavily on this particular aspect. Information about the views of Senators-elect on the broader CPM repeal issue is included in the Bills Digest on the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013.[26]

Position of major interest groups

The Abbott Government released exposure draft Bills of the repeal legislation on 15 October 2013. The period for submissions ended on 4 November 2013. A total of 158 submissions were received. Of these submissions, 57 included comments on the Authority (although many were tangential).[27]

Environmental non-profit groups

Environmental and climate action groups are strongly opposed to the Bill. They are concerned that the abolition of the Authority will remove transparency, and a non-partisan expert viewpoint, from the public and policy debate.[28]

… as climate change and mitigation and adaptation strategies have become toxically politicised to the extent that rational decision making is compromised in Australia, it crucial that an independent Climate Change Authority be retained, and not abolished.[29]

Business and industry

Business views on this Bill are mixed. Those businesses that are involved in carbon markets and the development of renewable energy believe the Authority to be an important entity that should remain.[30] These groups also call for continuity and certainty in renewable energy policy across the board.

However, in general, businesses are less concerned with the abolition of the Authority than they are about the future of reviews previously undertaken by the Authority. In this respect, review of the Renewable Energy Target (RET) scheme is a particularly divisive issue. Businesses with an interest in a low-carbon economy would like four-yearly reviews of the RET scheme starting only in 2018; this is to promote investment certainty.[31] Other businesses would like the RET scheme to be reviewed in 2014 and maintain the biennial schedule as an option.[32] This is because the repeal of the CPM is likely to drive up the price of Renewable Energy Certificates (RECs), thus increasing costs in some industries. This issue is developed in more detailed under ‘Key issues and Provisions’.

Financial implications

The financial implications of this Bill are relatively minor. The Explanatory Memorandum provides the following table setting out the proposed savings arising from the abolition of the Authority (Table 1).

Table 1 Financial impact ($ millions): Abolition of the Authority

  2013–14 2014–15 2015–16 2016–17 Total
Total impact of the fiscal balance 0.924 6.589 7.256 7.387 22.156
Total impact on underlying cash 0.924 6.589 7.256 7.387 22.156

Source: Explanatory Memorandum, Climate Change Authority (Abolition) Bill 2013, p. 6, accessed 5 December 2013.

Key issues and provisions

Part 1—removing an independent ‘umpire’

The provisions of Part 1 of the Bill, which repeals the Climate Change Authority Act—thereby abolishing the Authority—commence on the earlier of a day to be fixed by Proclamation or six months after Royal Assent.

Abolishing the Climate Change Authority will remove the independent ‘umpire’ from Australia’s climate and renewable energy policy.[33]

Environmental groups such as the Conservation Council of South Australia, Climate Action Network Australia and Environment Victoria, argue that the existence of an independent authority is needed to ensure that Australia’s climate change policies are driven by scientific evidence.[34] The Climate Institute has said that ‘[t]o help ensure key policy decisions are not arbitrarily made and to preserve community and business confidence in the independence, impartiality and transparency of climate policy reviews the Government should not abolish the Climate Change Authority’.[35]

During the debate of the CPM legislation in 2011, Coalition Senator, Simon Birmingham, proposed that together the Commonwealth Scientific and Industrial Research Organisation (CSIRO) and the Productivity Commission possessed the skills required to carry out the review functions of the Authority.[36] However, this may not be consistent with the public research agency charter with the CSIRO, which states that staff ‘should not advocate, defend or publicly debate the merits of government or opposition policies’.[37]

Further, according to a 2012 survey, the Australian public does not share such confidence in government scientists.[38] The survey revealed that the most trusted sources for information on climate change were university scientists, followed by friends/family and environmental organisations. Government scientists were ranked 6th and the Government in general was ranked 11th, in the bottom three most trusted sources along with car and oil companies.[39]

Although it is not specified in the Bill, the Minister for the Environment Greg Hunt has said that the periodic review functions of the Authority under the Clean Energy Act will be transferred to the Department of the Environment.[40] Opinions from the above survey suggest that any such reviews will be perceived as less independent and trustworthy than if undertaken by a non-government body. This may have been a concern of the former Minister for Climate Change and Energy Efficiency, Greg Combet, who explained that the Authority takes ‘the politics out of the debate.’[41]

Professor Jacqueline Peel and Professor Lee Godden of Melbourne University’s Law School have argued that:

Having the Authority at arms length from the government (rather than being embedded in the Environment Department and under the authority of the Environment Minister) would increase public confidence in the robustness of the government’s commitment to and actions on climate change. This model has been successfully used by other countries with world leading clean energy programs, such as the United Kingdom.[42]

The Authority was, in fact, modelled on the United Kingdom’s Committee on Climate Change (the Committee). Like the Committee, the Authority is a high-profile committee of experts in technology, science and economics, supported by a secretariat. Both organisations are underpinned by legislation that sets the framework for the work program and recommendations to government. The Chief Executive of the Committee, after visiting Australia in 2013, strongly supported the actions of the Authority:

I hope the [Coalition] opposition think again and pledge to retain the Authority, which could bring evidence and facts to bear on debates that otherwise run the risk of becoming dominated by short term political factors, ideological positions and commercial interests.[43]

Part 2—the Authority’s periodic reviews

Items 2–7 of Part 2 of the Bill amend the Clean Energy Act. The provisions commence on the day after Royal Assent.[44]

Items 8–10 of Part 2 of the Bill commence on the day after Royal Assent. The items amend three Acts being the Carbon Credits (Carbon Farming Initiative) Act, the National Greenhouse and Energy Reporting Act, and the Renewable Energy (Electricity) Act.

The Carbon Credits (Carbon Farming Initiative) Act underpins the Carbon Farming Initiative (CFI).[45] This is a scheme that allows farmers and landowners to voluntarily undertake carbon abatement projects on their land and generate carbon permits that can be sold into carbon markets. Under the Clean Energy Act, permits generated under the CFI can be used to offset some of a company’s liability.

The National Greenhouse and Energy Reporting Act underpins the National Greenhouse and Energy Reporting Scheme (NGERS).[46] This is a framework that outlines the requirement and methods for companies to monitor and report on their greenhouse gas emissions and energy use. The data and information collected and managed by NGERS are essential for an emissions trading scheme. However, they also provide the basis for meeting international reporting commitments and support any form of Australian emissions reduction policy.

The Renewable Energy (Electricity) Act sets the framework for the RET scheme.[47] The RET scheme requires that an additional 20 per cent of Australia’s electricity be generated from renewable sources by 2020. To do this, the RET scheme puts a requirement on electricity retailers to demonstrate each year that a certain percentage of their power has come from renewable energy sources. As proof, these power companies must surrender a certain number of Renewable Energy Certificates (RECs) where each REC represents one megawatt-hour of electricity generated from renewable sources. Although the RET scheme is not directly linked to the CPM, the price of RECs is affected by a price on carbon. Because of this relationship between the two market mechanisms—the RET and the CPM—the Authority was given the responsibility of reviewing the operations of both.

Reviews to be undertaken at the direction of the Minister

The amendments in items 8–10 of the Bill remove the existing requirements for the Climate Change Authority to conduct periodic reviews of each of the above Acts[48] and substitute a requirement that the Minister must cause to be conducted reviews under those Acts.

The Bill does not provide certainty as to which body will undertake the reviews; only that it will be at the direction of the Minister. The Explanatory Memorandum suggests that ‘in future, the reviews of the CFI, NGERS and the RET would be supported by the Department’.[49]

In response to this ambiguity, the Clean Energy Council (CEC) has expressed its ‘strong view that the legislation should make clear who should carry out the review’.[50]

What about reviews underway?

The Authority already has reviews underway, as required by existing legislation. Figure 1 is an excerpt from the Authority’s review timeline. Due on 28 February 2014 are the Authority’s first review of progress towards meeting national targets and carbon budget as well as the Authority’s recommendations of pollution caps for 2015–16 to 2020–21, national trajectory and carbon budget. Already the Authority has published a draft report, showing that it is well under way in respect of this 28 February deadline.[51] The Authority may also have begun research for its scheduled 31 December 2014 release of the first CFI review.

Figure 1 Climate Change Authority review timeline

Figure 1 Climate Change Authority review timeline 

Source: Climate Change Authority, Climate Change Authority review timeline, accessed 6 December 2013.

It was noted during the consultation period that:

The repeal legislation also does not specify how the government will deal with existing reviews underway by the Climate Change Authority, such as the review of emissions reduction targets and trajectories. This uncertainty is unhelpful in seeking to understand the government’s long term vision for climate policy in Australia e.g. the post‑2020 period.[52]

One concerned citizen suggested that:

If the Government proceeds with its intention to abolish CCA, CCA should be allowed to conclude work on any outstanding Reviews, in particular the Targets and Progress Review, to ensure CCA’s past work has not been wasted. For the sake of continuity, reviews begun by CCA should be finished by CCA, not the Environment Department. [53]

Item 25 of Part 3 of the Bill is a transitional provision.[54] It requires that ‘any records or documents that were in the possession of the Climate Change Authority immediately before transition time’ be transferred to the Department. That being the case, it would appear that the Department will have all the information that it requires in order to complete any outstanding reviews.

Reduced the scope and weight of reviews

Items 8–10 of Part 2 of the Bill operate to omit references to ‘review recommendations’ and ‘government response to those recommendations’ in the Carbon Credits (Carbon Farming Initiative) Act, the National Greenhouse and Energy Reporting Act , and the Renewable Energy (Electricity) Act as follows.

Recommendations

(8)  A report of a review under subsection (1) may set out recommendations to the Commonwealth Government.

(9)  In formulating a recommendation that the Commonwealth Government should take particular action, the Climate Change Authority must analyse the costs and benefits of that action.

(10)  Subsection (9) does not prevent the Climate Change Authority from taking other matters into account in formulating a recommendation.

(11)  If a report of a review under subsection (1) sets out one or more recommendations to the Commonwealth Government, the report must set out the Climate Change Authority's reasons for those recommendations.

Government response to recommendations

(12)  If a report of a review under subsection (1) sets out one or more recommendations to the Commonwealth Government:

(a)  as soon as practicable after receiving the report, the Minister must cause to be prepared a statement setting out the Commonwealth Government's response to each of the recommendations; and

(b)  within 6 months after receiving the report, the Minister must cause copies of the statement to be tabled in each House of the Parliament.

(13)  The Commonwealth Government's response to the recommendations may have regard to the views of the following:

        (a)  the Climate Change Authority;

        (b)  the Regulator;

        (c)  such other persons as the Minister considers relevant.[55]

Some stakeholders have called for these provisions to be reintroduced on the basis that the omission of such provisions reduces the scope of the reviews and dilutes any effect they might have.[56]

The Business Council of Australia also calls for the RET review in particular to be expanded to ‘include explicit consideration of the consequences of’:

-       changes in demand for electricity

-       the repeal of the carbon price

-       the impact it is having on business electricity prices given the RET accounts for a larger component of electricity costs for large users compared to households.[57]

Timing of reviews

As well as leaving uncertain the scope and implications of the periodic reviews, the Bill has implications for the dates of first and subsequent reviews.[58]

Reviews of the RET

An issue of contention amongst stakeholders is the proposed timing of reviews of the RET. Although the timing as outlined by provisions in the Bill match those currently in the Renewable Energy (Electricity) Act, the previous Government had announced the intention to change the scheduling of RET reviews.

In its first review of the RET, the Authority recommended that ‘[t]he frequency of scheduled reviews should be amended from every two years to every four years, so the next scheduled review would be in 2016’.[59] The Labor Government agreed ‘that full reviews every four years would provide an appropriate balance between flexibility in the scheme and policy stability for investments’.[60] However, this change was never implemented in legislation.

According to the renewable energy industry, the high frequency of RET reviews introduces business and operational uncertainty, dampening investment in the sector. AGL Energy has said that:

AGL notes that the proposed amendments effectively require a review of the operation of the RET every 2 years. AGL does not believe it is necessary to have a statutory review provision in the legislation. These type of reviews are unnecessary and they can impose additional uncertainty on industry. The renewable energy industry is highly capital intensive and therefore investors need certainty to obtain long-term funding for projects.[61]

Renewable energy developer, RES, has said that:

One of the key factors impeding RET related investment is the short review cycle of two years. RES’ experience with investors, both domestic and global, is that constant reviews create uncertainty and a significant reluctance to commit to hundred million dollar plus investments. This is substantially hindering the development of renewable energy projects in Australia and RES recommends that the legislated reviews be removed. If however the Government is seeking to maintain a review process, RES recommends that the review period be extended to at least four years. [62]

Wind Prospect CWP has said that:

…the first review of the RET under the amended Renewable Energy (Electricity) Act 2000 should be pushed back to at least 30th June 2018 to be more in line with the review of the National Greenhouse and Energy Reporting Act (the first review of which is also to be completed by 30 June 2018), with no further reviews to be undertaken until well after 2020.[63]

However, the general business sector may welcome an early and high-frequency RET review period, out of concern that the REC prices will rise drastically, adding to electricity costs. For example, the Australian Industry Group has raised concern that the CPM repeal will have an upward effect on REC prices.[64]

Reviews of the CFI

As the legislation currently stands, the CFI is to be reviewed by 31 December 2014 and then every three years.[65] Under this Bill, the first review of the CFI would be carried out before 31 December 2016 and then every three years.[66]

The Government’s proposal for replacing the CPM relies on an expanded CFI. It is therefore interesting that the Bill defers by two years the first review of the CFI. The most recent Australian greenhouse gas emissions statistics (Table 2) show that although emissions from energy, industry, agriculture and waste did not increase overall in the 12 months to March 2013, emissions from land use, land use change and forestry (LULUCF) did. Before proposing to scale up the CFI, it would seem circumspect to conduct an early and comprehensive review of CFI to understand whether it is in fact resulting in emissions reductions in the land sector and what are the CFI’s strengths and weaknesses.

Table 2  National Greenhouse Gas Inventory, net emissions by sector, year to March 2012, 2013

Table 2 National Greenhouse Gas Inventory, net emissions by sector, year to March 2012, 2013 

Source: Department of the Environment, Quarterly Update of Australia’s National Greenhouse Gas Inventory, March Quarter 2013, p. 12.

Other provisions

Land Sector Carbon and Biodiversity Board abolition

In repealing the Climate Change Authority Act, the Bill also abolishes the Land Sector Carbon and Biodiversity Board (LSCBB), which was created under Part 4 of that Act. The LSCBB was created to ‘provide high-level advice to the Government on the implementation of land sector measures’ contained in the CPM.[67] The LSCBB reports on progress in land sector and biodiversity measures, in particular progress implementing the Biodiversity Fund, which ‘assists land managers to store carbon, enhance biodiversity and build greater environmental resilience across the Australian landscape’.[68] Given that (from the information in Table 2) LULUCF greenhouse gas emissions continue to increase, it may be justified for the LSCBB to have an ongoing role in advising on and reviewing climate policy in the land sector.

Consequential and transitional provisions

Items 11–17 of Part 2 of the Bill are consequential provisions.[69] They amend the Australian Securities and Investments Commission Act, the Clean Energy Regulator Act, the Competition and Consumer Act and the Financial Management and Accountability Regulations to remove all reference to the Authority and the Climate Change Authority Act.[70]

Items 18–36 of Part 3 of the Bill are transitional provisions.[71] They provide for the transfer to the Commonwealth of the assets and liabilities of the Authority and require the Secretary of the Department of the Environment to prepare a final annual report for the Authority covering any activities since the previous annual report.

Concluding comments

Through this Bill, the Government abolishes the Authority and all reference to it in other Commonwealth statutes. Upon the abolition of the Authority, the Bill operates to transfer to the Minister the responsibility for ensuring that those reviews formerly carried out by the Authority are still carried out. It also removes legislative references that provide that the reviews may generate recommendations, and require the Minister to respond to any such recommendations. There are concerns that these changes remove transparency and impartiality from the climate policy debate.

The Bill also affects the frequency of reviews. The RET review schedule, which was to become quadrennial, remains biennial under the proposed legislation. The renewable energy sector claims that biennial reviews deter investment by creating an environment of policy uncertainty. The CFI, which was to be reviewed by 2014, will not be reviewed until two years later under the proposed legislation. Given the increase in greenhouse gas emissions in the land sector last year, and the fact that the Government plans to expand the CFI, an imminent review of the scheme might be considered prudent.

Appendix:

Bills Description
  • Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 (the ‘main repeal Bill’)
  • Repeals the Clean Energy Act 2011, the main piece of legislation that established the CPM. Also facilitates the collection of liabilities relating to the 2013–14 financial year; introduces new powers for the ACCC and removes assistance to the steel industry by repealing the Steel Transformation Plan Act 2011.[72]
  • True-up Shortfall Levy (General) (Carbon Tax Repeal) Bill 2013
  • True-up Shortfall Levy (Excise) (Carbon Tax Repeal) Bill 2013
  • Apply consequential amendments required by the main repeal Bill to recover the value of over-allocated free emissions permits that provide assistance to energy intensive trade-exposed activities under the CPM.
  • Customs Tariff Amendment (Carbon Tax Repeal) Bill 2013
  • Excise Tariff Amendment (Carbon Tax Repeal) Bill 2013
  • Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Carbon Tax Repeal) Bill 2013
  • Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Carbon Tax Repeal) Bill 2013
  • Ozone Protection and Synthetic Greenhouse Gas (Import Levy) (Transitional Provisions) Bill 2013
  • Repeal provisions that apply an equivalent carbon price to aviation fuel and synthetic greenhouse gases.
  • Apply transitional arrangements for the import of bulk synthetic greenhouse gases between 1 April and 30 June 2014.
  • Clean Energy (Income Tax Rates and Other Amendments) Bill 2013
  • Repeals personal income tax cuts set to commence on 1 July 2015, and repeals the associated amendments to the low-income tax offset.
  • Climate Change Authority (Abolition) Bill 2013
  • Abolishes the Climate Change Authority and the Land Sector Carbon & Biodiversity Board.
  • Clean Energy Finance Corporation (Abolition) Bill 2013
  • Abolishes the Clean Energy Finance Corporation.

 

Members, Senators and Parliamentary staff can obtain further information from the Parliamentary Library on (02) 6277 2500.



[1].     Climate Change Authority Act 2011, accessed 3 December 2013.

[2].     Clean Energy Act 2011, accessed 3 December 2013.

[3].     Carbon Credits (Carbon Farming Initiative) Act 2011, accessed 3 December 2013.

[4].     National Greenhouse and Energy Reporting Act 2007, accessed 3 December 2013.

[5].     Renewable Energy (Electricity) Act 2000, accessed 3 December 2013.

[7].     Clean Energy Regulator Act 2011, accessed 3 December 2013

[8].     Competition and Consumer Act 2010, accessed 3 December 2013

[10].  The Library will produce five separate Bills Digests covering these 11 Bills. These will cover (1) the Main Repeal Bill and the Bills relating to the true-up levy short fall, (2) the repeal of the equivalent carbon price arrangements, (3) the abolition of the Authority and the Land Sector Carbon & Biodiversity Board (this Bills Digest), (4) the abolition of the CEFC and (5) the repeal of the personal income tax cuts scheduled to commence from 1 July 2015. Each of these Bills Digests will be available from the Australian Parliament House website, ‘Bills Digests alphabetical index 2013-14’, accessed 5 December 2013.

[11].  G Combet, ‘Second reading speech: Climate Change Authority Bill 2011’, House of Representatives, Debates, 13 September 2011, p. 9868, accessed 3 December 2013.

[12].  Parliament of Australia, ‘Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 homepage’, Australian Parliament website, accessed 3 December 2013.

[13].  G Hunt (Minister for the Environment), ‘Second reading speech: Climate Change Authority (Abolition) Bill 2013’, House of Representatives, Debates, 13 November 2013, p. 16, accessed 3 December 2013.

[14].  Details about the terms of reference, submissions to the Environment and Communications Committee and the final report are on the Committee website, accessed 3 December 2013.

[15].  Selection of Bills Committee, Report No. 9 of 2013, The Senate, Canberra, 14 November 2013, pp. 8 and 9, accessed 15 November 2013.

[16].  Parliament of Australia, Submissions to the Senate Standing Committees on Environment and Communications, Inquiry into the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 [Provisions] and related bills, accessed 28 November 2013.

[17].  Origin, Submission to the Senate Standing Committee on Environment and Communications, Inquiry into the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 [Provisions] and related bills, 22 November 2013, p. 3, accessed 5 December 2013; Energy Supply Association of Australia, the Energy Retailers Association of Australia, the Energy Networks Association and the Australian Pipeline Industry Association, Submission to the Senate Standing Committee on Environment and Communications, Inquiry into the Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 [Provisions] and related bills, 22 November 2013, p. 5, accessed 5 December 2013.

[18].  Environment and Communications Legislation Committee, Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 [Provisions] and related Bills, The Senate, Canberra, December 2013, p. 33, accessed 3 December 2013.

[19].  Ibid., p. 54.

[20].  Ibid., p. 57.

[21].  Ibid., pp. 61–63.

[22].  Senate Standing Committee for the Scrutiny of Bills, Alert Digest No. 8 of 2013, The Senate, Canberra, 4 December 2013, p. 9, accessed 6 December 2013.

[23].  The Statement of Compatibility with Human Rights can be found at page 8 of the Explanatory Memorandum to the Bill.

[24].  C Milne, Abbott should abandon climate scepticism in face of IPCC report, media release, 27 September 2013, accessed 26 November 2013 and M Butler (Shadow Minister for Environment, Climate Change and Water), ‘Radio interview ABC 891 Coalition’s Direct Action Con, ABC 891, transcript, 13 November 2013, p. 3, accessed 27 November 2013.

[26].  A Talberg, K Swoboda, P Pyburne and J Tomaras, Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 [and] True-up Shortfall Levy (General) (Carbon Tax Repeal) Bill 2013 [and] True-up Shortfall Levy (Excise) (Carbon Tax Repeal) Bill 2013, Bills digest, 16, 2013–14, Parliamentary Library, Canberra, 2013, accessed 3 December 2013.

[27].  Department of the Environment, ‘Repealing the Carbon Tax - public comments’, Department of the Environment website, accessed 3 December 2013.

[28].  See for example Climate Action Newcastle, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, 4 November 2013 and Climate Action Network Australia, Submission to the Department of the Environment, Carbon tax repeal draft legislative package.

[29].  St Johns Wood Sustainability, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, 31 October 2013.

[30].  See for example Greenbank Environmental, Submission to the Department of the Environment, Carbon tax repeal draft legislative package and Climate Markets & Investment Association, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, 3 November 2013, accessed 28 November 2013.

[31].  See for example ACCIONA Energy, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, accessed 28 November 2013 and Wind Prospect CWP, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, 4 November 2013, accessed 28 November 2013.

[32].  See for example, Australian Industry Group, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, 5 November 2013, accessed 5 December 2013.

[33].  Climate Change Australia, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, 29 October 2013, accessed 28 November 2013.

[34].  Environment Victoria, Independent climate umpire finds current emissions targets not credible and need to be increased, media release, 30 October 2013, accessed 3 December 2013; and Conservation Council of South Australia, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, 4 November 2013, accessed 3 December 2013; Climate Action Network Australia, Submission to the Department of the Environment, Carbon tax repeal draft legislative package.

[35].  The Climate Institute, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, 4 November 2013, accessed 2 December 2013,

[37].  CSIRO, Public Research Agency Charter with the Commonwealth Scientific and Industrial Research Organisation (CSIRO), 2008.

[38].  Z Leviston, I Walker and S Malkin, Third annual survey of Australian attitudes to climate change, Interim report, CSIRO, January 2013, accessed 5 December 2013.

[39].  Ibid., p. 8.

[42].  J Peel and L Godden (Melbourne University), Submission to the Department of the Environment, Repeal of the Carbon Tax Exposure Draft Legislation, 18 October 2013, accessed 3 December 2013.

[43].  D Kennedy, ‘David Kennedy meets CCC’s Australian counterpart…’, Commission on Climate Change website, 21 March 2013, accessed 2 December 2013.

[44].  However the provisions will not commence at all if Part 1 of Schedule 1 to the Clean Energy Legislation (Carbon Tax Repeal) Act 2013 commences before this Act receives Royal Assent. See Parliament of Australia, ‘Clean Energy Legislation (Carbon Tax Repeal) Bill 2013 homepage’, op. cit.

[45].  Department of the Environment, ‘Carbon farming initiative, Department of the Environment website, accessed 3 December 2013.

[46].  Clean Energy Regulator, ‘National greenhouse and energy reporting, Clean Energy Regulator website, accessed 3 December 2013.

[47].  Department of the Environment, ‘Renewable energy target, Department of the Environment website, accessed 3 December 2013.

[48].  See for example National Greenhouse and Energy Reporting Act, section 76A, which is repealed and replaced by item 9 of the Bill.

[49].  Explanatory Memorandum, Climate Change Authority (Abolition) Bill 2013, p. 11, accessed 5 December 2013.

[50].  Clean Energy Council, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, 4 November 2013, accessed 3 December 2013.

[51].  Climate Change Authority, Reducing Australia’s greenhouse gas emissions – targets and progress review, Draft report, October 2013, accessed 3 December 2013.

[52].  J Peel and L Godden (Melbourne University), Submission to the Department of the Environment, Repeal of the Carbon Tax Exposure Draft Legislation, op. cit.

[53].  J Wight, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, p. 13.

[54].  It commences at the same time as the provisions covered by table item 2, being on the earlier of a day to be fixed by Proclamation or six months after Royal Assent.

[55].  See subsections 306(8)–(13) of the Carbon Credits (Carbon Farming Initiative) Act, repealed by item 8 of the Bill; subsections 76A(8)–(13) of the National Greenhouse and Energy Reporting Act, repealed by item 9 of the Bill; and subsections 162(8)–(14) of the Renewable Energy (Electricity) Act, repealed by item 10 of the Bill.

[56].  Pacific Hydro, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, 1 November 2013, accessed 3 December 2013 and Wind Prospect CWP, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, op. cit.

[57].  Business Council of Australia, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, November 2013, p. 4, accessed 3 December 2013.

[58]Carbon Credits (Carbon Farming Initiative) Act, proposed subsections 306(5) and (6), at item 8 of the Bill; National Greenhouse and Energy Reporting Act, proposed subsections 76A(5) and (6), at item 9 of the Bill; Renewable Energy (Electricity) Act, proposed subsection 162(6) and (7), at item 10 of the Bill.

[60].  Ibid.

[61].  AGL Energy, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, 4 November 2013, accessed 3 December 2013.

[62].  RES Australia, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, 4 November 2013, accessed 3 December 2013.

[63].  Wind Prospect CWP, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, op. cit.

[64].  Australian Industry Group, Submission to the Department of the Environment, Carbon tax repeal draft legislative package, op. cit.

[65]Carbon Credits (Carbon Farming Initiative) Act, subsections 306(5) and 306(6).

[66]Carbon Credits (Carbon Farming Initiative) Act, proposed subsections 306(5) and 306(6), at item 8 of the Bill.

[68].  Department of the Environment, ‘Biodiversity fund’, Department of the Environment website, accessed 3 December 2013.

[69].  They commence at the same time as the provisions covered by table item 2, being on the earlier of a day to be fixed by Proclamation or six months after Royal Assent.

[70].  Schedule 1, Part 2, Division 3.

[71].  They commence at the same time as the provisions covered by table item 2, being on the earlier of a day to be fixed by Proclamation or six months after Royal Assent.

[72]Steel Transformation Plan Act 2011, accessed 3 December 2013.

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