Purpose

The Climate Change Bill 2022 (the main Bill) was introduced to the House of Representatives on 27 July 2022, along with the Climate Change (Consequential Amendments) Bill 2022 (the CA Bill).

Climate Change Bill 2022

The main Bill’s primary purpose is to incorporate Australia’s national greenhouse gas emission reduction targets (‘emissions reduction targets’, or ‘targets’) in national laws.[1]

The Paris Agreement, to which Australia is a Party, requires Parties to set economy wide absolute emission reduction targets, and to describe these in documents known as nationally determined contributions (NDCs).[2] Although Australia  updated its emission reduction targets in an NDC pledge made to the international community in June 2022, the detail of the targets is not presently codified in national law.[3] If enacted, the main Bill would address that situation.

The main Bill has three key functions:

• to set out Australia’s greenhouse gas emissions reduction targets in domestic law
• to require annual Ministerial statements to Parliament regarding climate change and progress towards achievement of emissions reduction targets
• to give advisory functions regarding these targets and statements to the Climate Change Authority (CCA).

Climate Change (Consequential Amendments) Bill 2022

Purpose

The CA Bill would amend 14 existing Commonwealth Acts relating to climate, energy, infrastructure investment, and scientific research.

The main purpose of the amendments is to require selected Commonwealth entities (including the Australian Renewable Energy Agency (ARENA), Clean Energy Finance Corporation (CEFC), Clean Energy Regulator (CER), Export Finance Australia , Infrastructure Australia, and the Northern Australia Infrastructure Facility (NAIF) to consider the emissions reduction targets when exercising their statutory responsibilities.

The CA Bill does this by proposing new sections or amending/replacing existing sections to include:

• an objective of facilitating achievement of Australia’s greenhouse gas emissions reduction targets into the objects clause of the majority of the nominated Acts
• to clarify the constitutional basis of some of the named Acts. 

Structure of the Bill

The main Bill is divided into five parts:

Part 1 contains preliminary material including the objects of the Act, a simplified outline, a list of definitions, and the Act’s application.

Part 2 sets Australia’s emission reduction targets in law. It states a target to be achieved by 2030 and a longer-term target to be achieved by 2050.

Part 3 would specify obligations of the Minister to prepare an annual climate change statement to be tabled in Parliament.

Part 4 provides a role for the CCA to give advice to the Minister on the annual climate change statement, and regarding future nationally determined contribution (NDC) documents to be submitted in accordance with the Paris Agreement.

Part 5 requires the Minister to arrange for independent reviews of the Act on a periodic basis.

Background

This section provides background context to consideration of the climate Bills, initially by:

• explaining the policy purposes of climate change legislation
• describing national ‘framework’ climate laws enacted overseas
• recapping existing State and Territory climate laws and their targets
• defining what is entailed by ‘national climate change framework law’ and
• making observations about common features of climate change framework laws. 

The next part of the Background section outlines:

• the scientific impetus for action on climate change
• national factors including adaptation and economic issues.

The Background section closes with:

• an overview of the international legal framework for climate change including a detailed description of articles of the Paris Agreement most relevant to the Bills and
• a summary of Australia’s existing national level climate change and energy laws.

Purpose and approach

Expressed in the broadest possible terms, the main Bill is a form of climate change response legislation. It has been introduced with reference (in the Explanatory Memorandum) to the ‘clear scientific basis...for urgent action’,[4] and in anticipation of the various future climate risks and hazards. In a similar vein, the Explanatory Memorandum (EM) opens by recognising that:

Climate change is already having significant and visible impacts in Australia, in our region, and across the globe. Increased and immediate action is needed to avoid the most catastrophic impacts of climate change.[5]

Although motivated by the need to respond to the threats and risks of climate change, the Bill is perhaps better described as a form of declaratory, or even symbolic legislation, to lock in targets for national change policy ambition, and to make a clear statement of policy direction. The present climate Bills’ attempt to influence the Australian community and particularly the business community by sending a signal about consistent future intent.

The main Bill intends to codify Australia’s newest national emission reduction targets in domestic law. It states a target to be achieved by 2030 and a longer-term target to be achieved by 2050.

The past two decades have seen considerable contestation over the direction of Australian policy and law for climate change and energy.[6] Numerous publications - including from the Parliamentary Library - provide chronologies and accounts of the debates.[7]

Policy uncertainty in this area has been frequently cited by industry stakeholders as having negative implications for investment, particularly in the energy and electricity sectors. For example, the Clean Energy Council, the key peak body representing the renewable energy industry, asserted that renewable energy investment levels fell during 2021 as a ‘result of continued political and policy uncertainty.’[8]

In the second reading speech for the main Bill, the Minister for Climate Change expressed the intention to send a ‘message of stable, clear, coherent and necessary policy’ to private investors. The Minister also spoke about the desire for Australia to become ‘a renewable energy powerhouse’, declaring that passage of the Bill will send a message that ‘acting on climate change also means harnessing the opportunities of a renewable revolution.’[9]

The main benefit of legislating climate targets is well explained by an international survey of climate laws:

Where newly emerging targets and decarbonisation trajectories can be locked into national framework climate legislation, this serves to put states’ decarbonisation intentions on a more robust, stable and predictable footing appropriate to the challenge by anchoring them in hard law rather than positioning them in soft policy.[10]

A related point is that by anchoring climate change goals into national legislation, the laws serve to steady the course of climate policy by offering stability against diversion by world events (such as war and pandemics), thus preventing climate goals from being weakened when other matters become the focus of government attention.[11] 

Legislating climate targets also has an international dimension.  As explained by Muinzer:

A Climate Change Act can also act as an indication to both a country’s national community (including business and industry) and to the international community more broadly that the state in question is serious about tackling climate change…’[12]

In terms of indicating intentions internationally, Australia’s new national emission reduction targets have already been communicated on 16 June 2022 by the Government to the Secretariat of the UN Framework Convention on Climate Change.[13]

If climate change targets were not legislated, it would be possible to change them without any Parliamentary scrutiny. Thus, one key aim of placing climate targets in legislation is to state an objective for the long-term, in the hope of overcoming the tendency to short-term vision in politics.[14] As explained by the Chair of the UK’s Climate Change Committee, Lord Deben, this was one of the key aims of the UK’s Climate Change Act. He stated that the independence of the Climate Change Committee, combined with the unlikelihood of repeal of the legislation, gives an ability to take a long-term perspective:

An ability to overcome the real problem of all democratic countries, which is the short-lived life of a government, and the tendency always to leave things until after the next election … And yet we have a battle that we have to fight [against climate change] on a much longer-term basis.[15]

The role of national climate laws was summarised by the Intergovernmental Panel on Climate Change (IPCC) in its 2022 report on Mitigation of Climate Change:

Climate laws enable mitigation action by signalling the direction of travel, setting targets, mainstreaming mitigation into sector policies, enhancing regulatory certainty, creating law-backed agencies, creating focal points for social mobilisation, and attracting international finance … Among direct laws, ‘framework’ laws set an overarching legal basis for mitigation either by pursuing a target and implementation approach, or by seeking to mainstream climate objectives through sectoral plans and integrative institutions.[16]

Climate change framework laws

The main Bill is similar to declaratory, or ‘framework’ climate change response laws enacted in at least 43 other nations.[17] In most cases, such laws describe mid-term and longer-term greenhouse gas emission reduction targets to be achieved by 2030 and 2050.

State and Territory climate targets laws

Introduction of the Bill represents an opportunity for the Commonwealth to re-assert national leadership on the response to climate change.

Four of the states and territories have already enacted laws for climate change targets (a detailed chart is at Appendix One). South Australia was the first sub-national jurisdiction to enact climate target law in 2007, followed by Tasmania in 2008, and then Victoria and the ACT in 2010. Most of these jurisdictions have subsequently passed amendments to update their climate targets.

The most ambitious legislated targets in Australia are in the ACT, which has specified a mid-term target for emissions to be reduced to 65–75% less than 1990 emissions by 2030. Its later term target is for zero net emissions to be reached by 2045—rather than 2050.

Overseas examples

The main Bill provides for a law with elements broadly similar to those enacted in European nations including Austria, Bulgaria, Croatia, Denmark, Finland, France, Germany, Iceland, Ireland, the Netherlands, Norway, Spain, Sweden, Switzerland.[18] The EU has enacted its own Climate Change Law.

In the Pacific, climate targets laws have been enacted in Fiji, the Federated States of Micronesia, New Zealand, Papua New Guinea, and the Philippines. Other Pacific nations have climate change laws more directed to adaptation and forecasting, such as Vanuatu.[19]

Within the East Asian region, framework climate change laws are in force in Japan, South Korea, and Taiwan.[20]

Unifying features

Researchers from the Grantham Institute at the London School of Economics (publishers of the ‘Climate Change Laws of the World’ database) have described national climate change laws similar to those proposed in the present Bills as ‘strategic framework laws, which aim to create a unifying institutional structure to reduce greenhouse gas (GHG) emissions or address physical climate risks, or often both.’[21]

Broadly, there are a range of approaches in legislation to set national climate targets. At one end, there are Acts that only set out targets, giving a very high-level indication of the intended trajectory of climate change response. This type of legislation is often described as symbolic or declaratory.

These can be contrasted with legislation that seeks to provide a more comprehensive approach, including mechanisms, carbon budgets, and a more fine-grained specification of the emissions reduction trajectory towards the net zero goal.

The first type of legislation is sometimes described as a framework approach where the intention is to specify details later in Regulations or related instruments. This category sets out a broad framework and explicitly indicates an intention to reduce emissions in specified sectors through specific measures at a later date.[22]

Rather than simply making a declaration or representing a symbolic gesture, climate legislation can also provide for ‘climate policy integration’.  This conception of national framework legislation provides for an ongoing ‘living policy process’ through mechanisms that guide a continuous public process of policy development and implementation of greenhouse gas emissions reduction mechanisms.[23]

An alternative selected in some nations is ‘flagship legislation’, described as ‘a wide-ranging piece of legislation that fundamentally defines a country’s approach to climate change’. [24] This suggests a law that sets out a long-term intended approach to climate change. This can be done by setting out a combination of principles and/or mechanisms. As Nash explains, this form of climate law ‘lays down general principles and obligations for climate change policymaking’.[25] An Australian example is the Victorian Climate Change Act 2017 which specifies principles for decision making in response to climate change. (See: Key Issues, p. 61). 

A different approach to the making of climate laws applies in the USA where the emphasis is on tax incentives and grants to encourage certain investment actions to address climate change. Numerous such measures were included in the Inflation Reduction Act of 2022, signed into law by President Biden on 16 August 2022.[26] Professor Dan Farber of the UC Berkeley School of Law described it as ‘the biggest climate legislation ever passed in the United States.’ He explained: ‘The law will provide US$379 billion in subsidies to clean energy in the form of direct [grant] payments and tax credits.’[27]

Common elements of a climate framework law were identified in a law review article by Huang: 

A legally-binding, comprehensive framework adopted by parliament with a singular focus on climate change, across all sectors, covering all greenhouse gases.

A mid-century mitigation target, or long-term direction of travel.

Short- or mid-term economy-wide mitigation target(s) or rolling carbon budgets.

Consolidation of authority to act on climate to the executive branch and delegation of that authority to bodies through a clear hierarchy with public accountability.

An independent climate change committee.

Regular review, or regular process(es) to take into account of new science, assess adequacy, update or realign ambition.[28] 

Types of targets

The literature on climate change legislation describes several types of laws setting out climate targets (Figure 1). This taxonomy of types of targets distinguishes between mitigation targets and those for adaptation.[29] The targets for mitigation (reduction) of emissions include mid‑term targets to be reached by 2030, and longer-term targets to be reached by 2050.

Figure 1: Types of Targets in Climate Laws (Hillson, 2020)

A further distinction is between ‘direct targets’ that address levels of emissions directly (by simple emission reduction targets) and ‘indirect targets’ that address emissions indirectly by promoting implementation and uptake of clean technology solutions (for example, renewable electricity generation or energy efficiency), or reduction or phase out of technologies with negative consequences.[30]

Previous model – carbon pricing laws

The Bills before Parliament involve a conceptual departure from the approach of prior climate change laws enacted in 2011. That legislation, the Clean Energy Act 2011, and related laws, was repealed by the Clean Energy Legislation (Carbon Tax Repeal) Act 2014. The 2011 laws introduced a carbon pricing mechanism, placing a price on each tonne of greenhouse gas emissions. They provided for two forms of economic mechanism, an introductory fixed price charge per tonne, which later would have transitioned to a nationwide cap and trade emissions trading scheme. The policy intent of the previous laws was to generate an economy wide price signal, to encourage businesses and individuals to ‘internalise’ the negative externalities of greenhouse gas pollution.

By contrast, the present Bills do not contain a ‘market’ mechanism that might attempt to offer positive incentives to clean technologies or to penalise industries that cause greenhouse emissions. Also, the Bills do not propose amendments to the existing ‘Safeguard Mechanism’ (p. 33).

Practical and scientific impetus for action on climate change

Extreme weather events in Australia over the past five years - including floods, bushfires, droughts, and coastal storm surges damaging coastal properties - have led to increased attention on climate change.

Back in 2008, Professor Garnaut’s Climate Change Review had warned that:

If global development continues without effective mitigation, the mainstream science tells us that the impacts of climate change on Australia are likely to be severe.[31]

The Review also observed:

Australia’s level of exposure and sensitivity to the impacts of climate change is high. The extent to which these impacts are realised will depend on the success and timing of global greenhouse gas mitigation and on national adaptation efforts.[32]

In 2021, a report by the Australian Academy of Science on the risks to Australia of the current global trajectory of greenhouse gas emissions was published. It stated a similar message:

As the driest inhabited continent, Australia is highly vulnerable to the impacts of global warming … Multiple lines of evidence show that the incidence of extreme weather events will increase as the planet warms. Such events are a natural feature of the climate system, but there is strong evidence that many of them, such as heatwaves, bushfires, storms and coastal flooding, have become more frequent and intense in recent times. These extremes and their risks are likely to escalate as global temperatures continue to rise and our capacity to respond becomes compromised as the frequency increases. The only way to reduce the risk of these unpredictable and dangerous outcomes is for a substantial reduction in the emissions of greenhouse gases into the atmosphere.[33]

Global scientific perspective[34]

The state of international scientific consensus was summarised by the Australian Academy of Science as follows:

There is no scientific doubt about the source, reality and consequences associated with the current level of unmitigated climate change. Human activities, such as the burning of fossil fuels and the destruction of forests, are rapidly changing Earth’s climate. The rate of these changes in atmospheric greenhouse gases such as carbon dioxide (CO₂) and methane are unprecedented in millions of years, driving growing impacts on natural and human systems across the world. [35]

The IPCC prepares regular assessments of the scientific knowledge about climate change, based on review of thousands of peer-reviewed published scientific papers. These Assessment Reports are a comprehensive overview of knowledge about climate change including its drivers, impacts and future risks.[36] The IPCC’s Sixth Assessment Report was published during 2021-2022 and was endorsed by the Australian Academy of Science.[37] It concluded:

Human influence on the climate system is now an established fact: The Fourth Assessment Report (AR4) stated in 2007 that ‘warming of the climate system is unequivocal’, and AR5 stated in 2013 that ‘human influence on the climate system is clear’. Combined evidence from across the climate system strengthens this finding. It is unequivocal that the increase of CO₂, methane (CH₄) and nitrous oxide (N₂O) in the atmosphere over the industrial era is the result of human activities and that human influence is the main driver of many changes observed across the atmosphere, ocean, cryosphere and biosphere.[38]

Understanding of the climate system’s fundamental elements is robust and well established … Since systematic scientific assessments began in the 1970s, the influence of human activities on the warming of the climate system has evolved from theory to established fact. The evidence for human influence on recent climate change strengthened from the IPCC First Assessment Report in 1990 to the IPCC Fifth Assessment Report in 2013/14, and is now even stronger in this assessment. Changes across a greater number of climate system components, including changes in regional climate and extremes can now be attributed to human influence.[39]

A dedicated chapter in AR6 addresses the increased frequency and/or intensity of weather and climate extremes, and found:

It is an established fact that human-induced greenhouse gas emissions have led to an increased frequency and/or intensity of some weather and climate extremes since pre-industrial time, in particular for temperature extremes.[40]

Science background

Greenhouse gases are gases in the atmosphere that can absorb infra-red (heat) radiation, thereby trapping heat in the atmosphere.[41] Emissions of carbon dioxide, methane and nitrous oxide, attributable to human activity, increase the global average temperature by absorbing some of the heat radiated from the Earth’s surface, preventing it from escaping to space.[42] By the mid‑1980s, the international scientific community was warning that the rising global temperature was largely due to human activity increasing anthropogenic (human‑caused) greenhouse gas emissions into the atmosphere.[43]An international government-level response was prompted following a conference of scientists, organised in 1985 by the International Council of Scientific Unions (ICSU)[44], United Nations Environmental Program (UNEP), and the World Meteorology Organisation (WMO).[45] 

In 1998, the WMO and the UNEP established a specialised body for climate change science, the Intergovernmental Panel on Climate Change (IPCC).[46] The IPCC published its first assessment report (AR1) summarising climate science in 1990. It expressed certainty that emissions due to human activity are substantially increasing atmospheric concentrations of greenhouse gases, and that these would ‘enhance the greenhouse effect, resulting on average in an additional warming of the Earth’s surface.’[47]

With every subsequent report, the IPCC has expressed a growing certainty that the Earth’s climate is warming, and that human activity is a principal cause. The IPCC’s AR2 was published in 1995, finding that ‘the balance of evidence suggests a discernible human influence on global climate.’[48] In 2014, the IPCC’s AR5 noted:

Human influence on the climate system is clear, and recent anthropogenic emissions of greenhouse gases are the highest in history… Warming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over decades to millennia.[49]

In its 2018 Special Report, the IPCC estimated that human activity was already responsible for approximately 1°C of average global warming. The report noted there would be distinct benefits in limiting warming to 1.5°C. It warned that national pledges on mitigation (at that point) were insufficient to meet the Paris Agreement temperature goals.[50]

In August 2021, the IPCC published the first part of the latest assessment report (‘AR6’), examining the physical science basis of climate change. It stated:

It is unequivocal that human influence has warmed the atmosphere, ocean and land. Widespread and rapid changes in the atmosphere, ocean, cryosphere and biosphere have occurred…Human-induced climate change is already affecting many weather and climate extremes in every region across the globe. Evidence of observed changes in extremes such as heatwaves, heavy precipitation, droughts, and tropical cyclones, and, in particular, their attribution to human influence, has strengthened since AR5.[51]

The report found that global warming of 1.5 °C and 2°C ‘will be exceeded during the 21^st century unless deep reductions in CO₂ and other greenhouse gas emissions occur in the coming decades.’[52]

The second part of AR6, Climate Change 2022: Impacts, Adaptation and Vulnerability, was released in February 2022 and assessed how climate change is impacting on the world’s ecosystems, biodiversity, and the human population.[53]An official summary  noted:

Human-induced climate change is causing dangerous and widespread disruption in nature and affecting the lives of billions of people around the world, despite efforts to reduce the risks. People and ecosystems least able to cope are being hardest hit.[54]

The third part of AR6, Climate Change 2022: Mitigation of Climate Change, was released in April 2022 and assessed the impact of international climate change mitigation pledges in relation to long‑term emission goals.[55] The co‑chair of the authors’ working group, Professor Jim Skea, stated: ‘It’s now or never, if we want to limit global warming to 1.5°C … Without immediate and deep emissions reductions across all sectors, it will be impossible.’[56]

Importance of carbon budgets

To keep global warming under a specific temperature limit (such as at 1.5°C or 2°C above pre‑industrial levels), there is an upper limit to the quantity of global emissions that can still be released before the point at which global net emissions need to be cut to zero. This is known as the global carbon budget. It is commonly used to explain the challenge of keeping global warming to ‘acceptable’ levels.[57]

As CO₂ is the primary greenhouse gas emitted by human activities (mainly from burning fossil fuels for energy and transport), the global carbon budget is often expressed in terms of CO₂ as opposed to carbon dioxide equivalent (CO₂‑e).[58] The budget is calculated using the near‑linear relationship between warming and CO₂ emissions, whereby warming increases approximately proportionally to cumulative emissions.[59]

The IPCC defines the global carbon budget as follows:

(i)    an assessment of carbon cycle sources and sinks on a global level, through the synthesis of evidence for fossil fuel and cement emissions, emissions and removals associated with land use and land-use change, ocean and natural land sources and sinks of carbon dioxide (CO₂), and the resulting change in atmospheric CO₂ concentration …

(ii)   the maximum amount of cumulative net global anthropogenic CO₂ emissions that would result in limiting global warming to a given level with a given probability, taking into account the effect of other anthropogenic climate forcers. This is referred to as the total carbon budget when expressed starting from the pre-industrial period, and as the remaining carbon budget when expressed from a recent specified date.[60]

Using current central estimates, the IPCC estimated the following remaining global carbon budgets from 2020:

• 500 gigatonnes[61] of CO₂ (Gt CO₂), for a 50% chance of limiting global warming to 1.5°C
• 1,150 Gt CO₂, for a 67% chance of limiting warming to 2°C.[62] 

Another estimate, the ‘Global Carbon Budget 2021’, calculated our remaining carbon budgets, from January 2022, for a 50% chance of limiting global warming to:

• 1.5°C = 420 Gt CO₂ – estimated to last approximately 11 years
• 1.7°C = 770 Gt CO₂ – lasting approx. 20 years
• 2°C = 1,270 Gt CO₂ – lasting approx. 32 years.[63]

Countries have been increasingly incorporating a carbon budget approach when setting a national emissions budget.[64] Australia’s 2030 emissions reduction target has been set as both a single‑year target and a national emissions budget target, with an indicative value of 4,381 million tonnes of CO₂‑e (Mt CO₂‑e) for 2021‍–30.[65] According to the latest available emission figures Australia’s annual emissions to December 2021 were 488 Mt CO₂‑e.[66] If national emissions continue at this 2021 level (of 488 Mt CO₂‑e a year), the 43% emissions budget target would be used up in approximately 9 years.[67]

Implications of Net Zero for Energy Use

The implications of net zero targets for energy systems were examined by the International Energy Agency (IEA) in its 2021 flagship report, Net Zero by 2050: A Roadmap for the Global Energy Sector. The report described itself as ‘the world’s first comprehensive study of how to transition to a net zero energy system by 2050 while ensuring stable and affordable energy supplies, providing universal energy access, and enabling robust economic growth.’[68]

The policy conclusions of the IEA study were that reaching net zero ‘calls for nothing less than a complete transformation of how we produce, transport and consume energy’.[69] The study found that to achieve net zero by 2050: ‘There is no need for investment in new fossil fuel supply in our net zero pathway’.[70]

The IEA’s modelled pathway to net zero by 2050 involved these observations:

No additional new final investment decisions [in the electricity sector] should be taken for new unabated coal plants, the least efficient coal plants are phased out by 2030, and the remaining coal plants still in use by 2040 are retrofitted.[71]

The IEA’s modelling also led to the conclusion that to reach net zero by 2050:

Beyond projects already committed as of 2021, there are no new oil and gas fields approved for development in our pathway, and no new coal mines or mine extensions are required.[72]

National level impetus for action

In its most recent State of the Climate report (2020), the Bureau of Meteorology (BOM) noted that Australia’s climate had warmed on average by 1.44 ± 0.24°C since 1910 when national records began and 2020, with the majority of the warming occurring since 1950.[73] Australia is already witnessing the effects of a warming climate, with evidence showing an associated increase in the frequency and intensity of some extreme weather events.[74] While it has been noted that Australia has always experienced extreme weather events and natural disasters, research has shown that their frequency, severity and cost is increasing as climate change progresses.[75]

A 2000 Senate Committee report examining Australia’s global warming policies concluded that Australia needed ‘concerted action to reduce its emissions now’, warning:

Evidence suggests that Australia will be very negatively affected by climate change given the size of its land mass, its long coastline, current extremes of climate, vulnerability to cyclones and the El Nino/La Nina cycle, existing problems with soil salinity, and its economic dependence on agriculture and tourism.[76]

In 2007, the Commonwealth and State and Territory governments commissioned an independent review into the impacts of climate change on Australia’s economy. The resulting Garnaut Climate Change Review, published in 2008, provided a detailed analysis of the impacts and costs of climate change on Australia’s economy.[77] The opening lines of the report stated:

The weight of scientific evidence tells us that Australians are facing risks of damaging climate change.

The risk can be substantially reduced by strong, effective and early action by all major economies. Australia will need to play its full proportionate part in global action. As one of the developed countries, its full part will be relatively large, and involve major early changes to established economic structure.[78]

In the chapter concerning the impacts of climate change in Australia, the report outlined the following points:

Growth in emissions is expected to have a severe and costly impact on agriculture, infrastructure, biodiversity and ecosystems in Australia.

There will also be flow-on effects from the adverse impact of climate change on Australia’s neighbours in the Pacific and Asia.

These impacts would be significantly reduced with ambitious global mitigation.[79]

Since 2010, the BOM and CSIRO have jointly published biennial State of the Climate reports, drawing on the latest climate research to present the most up-to-date information on Australia’s climate.[80] Their latest 2020 State of the Climate report noted:

Observations, reconstructions and climate modelling paint a consistent picture of ongoing, long-term climate change interacting with underlying natural variability. Associated changes in weather and climate extremes—such as extreme heat, heavy rainfall and coastal inundation, fire weather and drought—have a large impact on the health and wellbeing of our communities and ecosystems. They affect the lives and livelihoods of all Australians.

Australia needs to plan for and adapt to the changing nature of climate risk now and in the decades ahead. Reducing global greenhouse gas emissions will lead to less warming and fewer impacts in the future.[81]

The most recent SOE report, Australia: State of the Environment 2021, was released in July 2022.[82] The report found that ‘climate change is putting pressure on all parts of the environment’, stating:

Over the past 5 years to 2021, climate change and extreme weather events have highlighted the vulnerability of human society; ecosystems and biodiversity, including freshwater and marine systems and other natural resources; industry, crops and agriculture; and urban, rural and coastal communities. Climate shifts that affect temperature and weather patterns, increased frequency and severity of extreme events, and other climate‑related changes such as sea level rise are all having profound effects.

… There is a general shift across Australia towards higher land, air and sea temperatures; more acidic oceans; rising sea levels; and less rainfall in southern Australia. Bushfires and heatwaves (both land and sea) are increasing in frequency and intensity. Other extreme events are changing in their frequency, intensity and distribution. It is anticipated that pressure from climate change will continue to increase.[83]

The report concluded that overall, the pressure of climate change has a ‘high impact’ on Australia’s environment, and the situation had deteriorated since the previous 2016 SOE assessment.[84]

Economic costs and opportunities

In general terms, international agencies including the IEA,[85] IMF,[86] World Bank,[87] as well as thinktanks,[88] commentators,[89] and academics[90] recently have produced numerous reports and papers on the economic opportunities, industry transitions,[91] and technological choices[92] associated with the transition to net zero emissions.

Some commentators have raised concerns about the economic impact of the climate Bills, claiming that they would lead to an economic ‘free fall’.[93]

However, notable in this debate over climate change, when compared to previous times that the issue has come before Parliament, is the support of business peak bodies for the net zero target. (See: ‘Position of Major Interest Groups’, p. 39).

The anticipated future costs of the counterfactual scenario, of not passing the Bills, are inherently difficult to estimate as there are many factors at play.[94]

Australia is responding to the challenge of climate change through the UN climate negotiations process, particularly to implement and operationalise the Paris Agreement. The Minister’s Second Reading Speech argues that the main Bill, by setting climate targets in law, ‘sends a message that Australia is back as a good international citizen’.[95] Enacting the Bills may improve Australia’s negotiating position in long-running talks with the EU for a free trade agreement.[96]

EU border adjustment

Another consideration is the risk of future imposition of carbon border adjustment measures (‘CBAM’) by jurisdictions such as the EU. This will involve a charge applied to goods imported into the EU which did not pay a carbon price. The measure is to be phased in and will apply to trade exposed industries such as iron and steel, cement, fertiliser and aluminium.

The EU claims that its measures are WTO compliant, and will work as follows:

EU importers will buy carbon certificates corresponding to the carbon price that would have been paid, had the goods been produced under the EU's carbon pricing rules. Conversely, once a non-EU producer can show that they have already paid a price for the carbon used in the production of the imported goods in a third country, the corresponding cost can be fully deducted for the EU importer. The CBAM will help reduce the risk of carbon leakage by encouraging producers in non-EU countries to green their production processes.[97]

Costs and benefits of adaptation

The option of substantial Australian expenditure on adaptation measures, to adapt to future climate change and climatic disruption is estimated by the insurance industry to have a highly favourable ratio of benefit to cost. Expenditure in advance to strengthen the resilience of infrastructure to extreme weather events (flood, storm, bushfire) is estimated to provide a high return. The Insurance Council of Australia (ICA) cites an actuarial report to conclude that expenditure in advance on resilience of $232 million could save governments and communities $5.6 billion out to 2050.[98] The ICA has said that ‘physical mitigation requires significant investment to mitigate worsening climate impacts, for example the ICA’s Actions of the Sea and Future Risks report has found that at least $30 billion (net present cost) of investment will be required in large scale coastal protection and adaptation projects over the next 50-years.’[99]

Potential costs of inaction

An additional point raised by the OECD in its report Cost of Policy Inaction is that ‘Non-linear impacts, including the existence of ecological thresholds and irreversible changes, can have significant effects on the total costs of inaction.’[100] Climate change related ‘tipping points’ have long been identified in the scientific literature, for example, in Professor Lenton’s 2008 paper published in the Proceedings of the National Academy of Sciences.[101] Climatic tipping points are where a small amount of extra greenhouse gas forcing triggers a qualitative change in some part of the climate system (for example, South Asian Monsoon).[102] 

The cost of failing to take action on anthropogenic (human induced) climatic disruption was examined in reports by credible economists – in 2006, the Stern Review[103] in the UK and in Australia by the Garnaut Review in 2008[104] and 2011.[105] More recently the issue has been examined by Professor Kompas of the Australian National University.[106] That peer reviewed work found that the global economic gains from complying with the Paris Agreement were ‘shown to be substantial across 139 countries’ and estimated ‘the global gains from complying with the 2°C target are US$17,489 billion per year’ when compared to the alternative case of 4°C [of average warming].[107]

International legal framework on climate change

As the Climate Change Bills make frequent reference to the Paris Agreement, it is useful to review the broader framework of international climate change law which includes the United Nations Framework Convention on Climate Change (UNFCCC),[108] the Kyoto Protocol[109] (and its related Doha Amendment).[110]

Background

In December 1990, the UN General Assembly resolved to begin negotiation of a Convention on Climate Change.[111] These negotiations led to adoption of the Framework Convention on Climate Change in May 1992.

The UNFCCC provides a framework for international co-operation on climate change, with the objective of ‘stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system’.[112] The Convention was opened for signature in June 1992, receiving 155 signatures, including that of Australia. It entered into force in March 1994. There are now 198 Parties to the Convention.[113]

Kyoto Protocol

Recognition of the limitations of the UNFCCC (in terms of insufficient quantified emission reduction obligations applicable to developed country Parties) led to the commencement of negotiations on a Protocol to the Convention, with the aim of an instrument with legally binding obligations on ‘developed’ nations (described as ‘Annex 1’ parties). The Kyoto Protocol was adopted on 11 December 1997, but did not enter into force until 16 February 2005. It sets quantified emission reduction limitations on the Annex 1 Parties, including Australia, over a series of set ‘commitment periods’, first running between 2008–2012, and later between 2013–2020, measured relative to a baseline year of 1990. It reiterated the principle of ‘common but differentiated responsibility’, set out in the UNFCCC.

Doha Amendment

The Doha Amendment to the Kyoto Protocol was adopted by Parties to the Kyoto Protocol at the Conference of Parties (COP) in Qatar in December 2012. The Doha Amendment set out a second commitment period for quantified emission reduction obligations for the developed country parties to the Kyoto Protocol for the period 2013–2020.[114]

Following a long and gradual process of ratification, the Doha Amendment eventually entered into force on 31 December 2020.[115] However, given the entry into force of the Paris Agreement, there is little prospect that the Kyoto Protocol will be extended to a third commitment period for 2021 and beyond. Nevertheless, despite some commentary to the contrary, the Kyoto Protocol has not ‘expired’ or ‘finished’ and remains in force unless and until the Parties might take actions to retire it.[116]

Paris Agreement

The Paris Agreement was negotiated by the Parties to the UNFCCC at the UN Climate Change Conference (COP21) in Paris, France in December 2015 and was adopted at the conclusion of that conference on 12 December 2015. The Agreement opened for signature at the UN Headquarters in New York on Earth Day, 22 April 2016. It entered into force on 4 November 2016.[117] There are 193 Parties (192 countries plus the European Union) to the Paris Agreement.

Australia signed the Paris Agreement on 22 April 2016 and subsequently ratified the Agreement on 10 November 2016 (with effect from 9 December 2016).[118]

Status

The Paris Agreement has the legal status of a treaty in international law.[119] It was adopted ‘under’ the UNFCCC by a decision of the 21st Conference of the Parties to the UNFCCC in Paris in December 2015. (Decision 1/CP.21). The Paris Agreement is linked to the Framework Convention in numerous ways, for example it adopts the definitions contained in Article 1 of the Convention, including terms such as ‘sink’ and ‘source’.[120] These definitions are relevant to interpretation of key terms in the Bills.

Objectives and Mechanisms of the Paris Agreement

The objectives of the Paris Agreement are set out in Article 2 and include the goal of limiting global warming to well below 2°C and preferably to 1.5°C (compared to pre-industrial levels).[121]

Temperature Objective

The Paris Agreement sets out a temperature-based goal in Article 2.1:[122]

This Agreement, in enhancing the implementation of the Convention, including its objective, aims to strengthen the global response to the threat of climate change, …., including by:

(a) Holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 °C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change.

This goal is referred to in the objects clause of the Climate Change Bill.

Net Zero Targets

A central concept of the Paris Agreement, and one that is linked to the long-term temperature goal, is ‘net zero emissions’. In Article 4.1, the Parties aim ‘to undertake rapid reductions … in accordance with best available science, so as to achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century.’

Relevant to the Bills before Parliament is the definition of net zero at the national (or country) level. Excluding internationally traded transfers of emissions mitigation effort, the point of ‘net zero’ emissions can be defined as the point at which:

GHG emissions released to the atmosphere from sources within the country’s territory in the target year do not exceed GHGs removed from the atmosphere by sinks within the country’s territory in same year.[123]

Nations with Net Zero Targets

A 2021 article (by researchers of the University of Oxford) found 124 countries have some form of commitment to net zero.[124] These include the world’s three biggest emitters: China, the US and EU, which together account for 46% of global emissions.[125]

The United Nations ‘net zero coalition’ page applies slightly more rigid criteria about net zero pledges by 2050, to find that:

More than 70 countries, including the biggest polluters – China, the United States, and the European Union – have set a net-zero target, covering about 76% of global emissions.[126]

This is based on updated data provided to the United Nations Environment Plan (UNEP) for its annual Emissions Gap Report (which measures the gap between NDC pledges and the level of reductions required to meet the Paris Agreement temperature goals).

Peak year for emissions

Article 4.1 of the Paris Agreement establishes the aim of reaching a global peak in emissions as soon as possible, and to undertake rapid reductions thereafter.

The peak in emissions is known as the point at which global greenhouse gas emissions will switch from annually increasing to a phase in which they will annually decrease thereafter. If developing country Parties are continuing to increase emissions, then it will be necessary for other Parties, such as developed countries Parties to be reducing emissions more rapidly.

The longer that nations, acting collectively, take to reach the point of peak emissions, means that the emissions reductions required in order to meet the temperature goals will be increasingly larger and more ambitious.

This explains the choice of drafting in Article 4.1 of the Agreement, that ‘In order to achieve the long-term temperature goal set out in Article 2, Parties aim to reach global peaking of greenhouse gas emissions as soon as possible.’

The IPCC’s 2022 report, the 6th Assessment Report, discusses a range of global emission reduction scenarios, known as modelled pathways. In the pathways depicted which limit warming to 1.5°C with no or limited overshoot, it is required that global GHG emissions peak ‘between 2020 and at the latest before 2025’. These scenarios ‘assume immediate action’.[127] The Summary for Policy Makers continues:

Without a strengthening of policies beyond those that are implemented by the end of 2020, GHG emissions are projected to rise beyond 2025, leading to a median global warming of 3.2°C [2.2 to 3.5°C] by 2100. [128]

In the energy sector, there is little sign of emissions declining after having reached a peak in global emissions. On the contrary, according to analysis published by the IEA in March 2022, ‘global energy-related carbon dioxide emissions rose by 6% in 2021 to 36.3 billion tonnes, their highest ever level’. The IEA attributed this growth to economic rebound after the Covid-19 crisis, and increased use of coal. When combined with estimates of methane emissions published by IEA in February 2022, plus estimates of nitrous oxide and flaring-related CO₂ emissions, according to the IEA ‘the new analysis shows that overall greenhouse gas emissions from energy rose to their highest ever level in 2021’.[129]

Obligations on Parties to the Paris Agreement

This section sets out main obligations of Parties to the Paris Agreement.[130]

The Paris Agreement obliges all Parties to undertake and communicate ‘ambitious efforts’ in the form of climate change pledges, known formally as Nationally Determined Contributions (NDCs).[131] These NDCs describe each Party’s national emissions reduction targets post-2020, and how they plan to achieve the reduction, and explain policies and measures to adapt to climate change.

NDCs must be updated at 5-yearly intervals and periodically reviewed in accordance with the Global Stocktake (see below). Appendix Two contains comparative information regarding NDCs of selected OECD nations.

The procedural aspects of the Paris Agreement are legally-binding. For example, there is a legal obligation to communicate NDCs. However, there is no quantified obligation in relation to the level of ambition in the content and targets of NDCs.

National ‘ambition cycle’

The following paragraphs explain how provisions of the Paris Agreement work together to create what is known as 'the ambition cycle’ of the Agreement.

Article 4.2 sets out a legally binding, mandatory obligation as follows:

Each Party shall prepare, communicate, and maintain successive nationally determined contributions that it intends to achieve. Parties shall pursue domestic mitigation measures, with the aim of achieving the objectives of such contributions.

Thus, procedural obligations to communicate internationally about national efforts are self-evident, as are obligations to undertake domestic emissions mitigation measures.

However, it is important to note that the Article does not set out an obligation of result in terms of achievement of particular emissions reductions.[132] In other words, it does not require a Party to achieve their proposed emissions reductions, or impose a penalty upon them for failing to meet the goals or targets that they set for themselves through the NDC process.

Instead of a prescriptive, top-down approach, the Paris Agreement relies more upon peer pressure and public visibility. Each submitted NDC can be accessed by the public from a Registry of NDCs maintained by the UN Climate Change Secretariat.[133] 

There are additional ‘Transparency provisions’ that the Paris Agreement relies upon to generate indirect pressure of public attention on Parties to achieve their targets. Particularly important is the ‘Enhanced Transparency Framework’ (ETF), in Article 13 (and clarified and elaborated by subsequent COP decisions). The transparency mechanisms to which Australia is subject under Article 13 include ‘national communications [to the Secretariat, every four years], biennial reports and biennial update repots, international assessment and review’.  International assessment refers to annual review by an external expert review team. (In domestic regulatory contexts, this approach to achieving legal or regulatory objectives through indirect pressure of public attention is known as the regulatory technology of ‘shaming’.[134])

Principle of progression

The Paris Agreement sets out a broad principle of progression, or progressive improvement in national climate change ambition.

The progression principle is expressed in two ways in the Paris Agreement. Firstly, in general terms in Article 3, which states that ‘The efforts of all Parties will represent a progression over time’.

Secondly, it does this in clauses relating to national climate action plans (pledges) or ‘nationally determined contributions’ (NDCs). These provisions elaborating upon the principle of progression are often informally referred to as ‘the ratchet mechanism’ (or conversely as a non-regression principle). This term has been used in public debate and discussion in Australia. The EM, in relation to clauses 10(5) and 10(6) refers to the Paris Agreement ‘principle against backsliding’.[135]

The Paris Agreement sets out a series of five-year cycles for updating of NDCs. Each NDC is expected to be more ambitious than the last. The Agreement sets out an expectation of progressive improvement from each Party, in Article 4.3, which provides:

Each Party’s successive nationally determined contribution will represent a progression beyond the Party’s then current nationally determined contribution and reflect its highest possible ambition…[136]

In summary, Parties are expected to communicate successively more ambitious NDCs. However, there is some ambiguity around ambition, as Prof. Harald Winkler notes:

The references for future NDCs are a self-referential baseline – the party’s existing NDC – but are also guided by the normative expectations of ‘highest possible ambition’ – a ‘direction of travel’ of becoming more ambitious over time. Whether a party’s NDC reflects its highest ambition may be difficult to establish…[137]

Further clarification is provided by Professors Bodansky and Brunnée, who add:

The provision on progression is not prescriptive in relation to how progression (in form or rigor) is defined and it is silent on who determines progression. Each party will, in practice, decide for itself what its contributions will be and hence how its contribution will reflect its ‘highest possible ambition’…Nevertheless the standards of progression and highest possible ambition are arguably objective rather than self-judging, so parties national determinations will be open to comment and critique by other states as well as by civil society organisations.[138]

Revision of emissions targets

The Paris Agreement requires Parties to make a formal communication about their NDC every 5 years. Article 4.9 provides: 

Each Party shall communicate a nationally determined contribution every five years in accordance with decision 1/CP.21 and any relevant decisions of the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement and be informed by the outcomes of the global stocktake referred to in Article 14.

At the Glasgow COP in December 2021, the Parties adopted a decision regarding ‘common time frames’ for nationally determined contributions referred to in Article 4.10, of the Paris Agreement. [139] Under this decision, NDC can last up to ten years, but will need to be re‑communicated or updated every five years. The Decision ‘encourages parties to communicate in 2025 an NDC with an end date of 2035, in 2030 an NDC with an end date of 2040, and so forth every five years thereafter.’[140]

Australia’s NDC

On 16 June 2022, the Australian Government communicated an updated Nationally Determined Contribution (NDC) to the Executive Secretary of the UN Framework Convention on Climate Change (UNFCCC).[141]

It contained the following revised emission reduction targets:

• To reduce Australia’s net greenhouse gas emissions to 43% below 2005 levels by 2030
• To reduce Australia’s net greenhouse gas emissions to zero by 2050.

Previously, Australia’s nationally determined contribution was to achieve a 26–28% reduction in emissions, based on 2005 levels, by 2030.[142]

The Australian Government has stated that it will submit its second NDC to the UNFCCC in 2025.[143] That year will be ten years after the Paris Agreement was opened for signature (2015). The new NDC (in 2025) will then run to 2035 (with an option to update the NDC sooner).

Global Stocktake mechanism

The national level obligations to prepare NDCs under the Paris Agreement is supplemented by the collective operation of a global mechanism for progress review, known as the ‘Global Stocktake’.

Article 14 mandates a five yearly ‘global stocktake’ process, to commence in 2023.[144] This is to occur at the mid-point of each NDC cycle, (with 2023 being midway between 2020 and 2025). 

The global stocktake is intended to inform collective efforts on mitigation, adaptation and support to developing countries.

In detail, the Parties are ‘to periodically take stock of the implementation of this Agreement to assess the collective progress towards achieving the purpose of this Agreement and its long-term goals.’[145] Article 14.1 further states that this global review of climate effort will be based on ‘the best available science’ and should consider mitigation, adaptation and other factors including equity.

As a Party to the Paris Agreement, Australia will be required in 2023 to participate in the ongoing Global Stocktake mechanism, whose operation was confirmed by the Glasgow Climate Pact.

It is likely that the periodic operation of the global stocktake mechanism will exert indirect diplomatic pressure on Australia to increase its emission reduction pledges (NDC) over time. It will also be a source of pressure to provide additional support to developing countries to adapt to climate change.

Glasgow Climate Pact

The most recent Conference of the Parties, COP26, was held in Glasgow in November 2021. The Parties agreed to the Glasgow Climate Pact, which elaborated upon some aspects of the Paris Agreement.

Additional agreements and outcomes reached at the COP26 included:[146]

• requiring Parties that have not yet communicated new or updated nationally determined contributions (NDCs) to do so before the next annual COP (in November 2022)
• requiring submission of new NDCs in 2025 that will have an end date of 2035, and in 2030 to submit NDCs with an end date of 2040, and so on. These will require regular five-year updates to NDCs, with each lasting for ten years
• agreeing, in broad terms, to ‘phase down’ unabated coal power, and to ‘phase out’ inefficient fossil fuel subsidies
• finalising the Paris Agreement Rulebook, in order to ‘operationalise’ the Paris Agreement. This contains much of the revised rules for international carbon accounting and carbon trading under various ‘flexibility mechanisms’
• launching the ‘Global Methane Pledge’. One hundred and twenty-one countries (but not Australia) have signed the pledge, committing to reduce global methane emissions by 30% by 2030
• the Glasgow Leaders’ Declaration on Forests and Land Use, signed by 145 countries (including Australia), to halt and reverse forest loss and land degradation by 2030
• agreement on 2 important mechanisms, the Enhanced Transparency Framework, and a mechanism to replace the former Clean Development Mechanism (CDM), in relation to internationally traded carbon credits involving a development cooperation aspect (‘non-market approaches’).[147]

International climate change negotiations: 2022

Australia participated in UN climate negotiations, held 6–16 June 2022 in Bonn, Germany.

The international climate change negotiation process is continuing in the lead up to the 27^th Conference of the Parties to the UNFCCC, (‘COP27’), at Sharm el-Sheik, Egypt from 6–18 November 2022.

International credits

Discussion of the attainment of a national target of ‘net zero’ raises questions of whether international carbon credits may be used by Australia to meet its target and the related quality and integrity standards to be applicable to imported credits.

The Paris Agreement, in Article 6, sets out a very broad-brush outline framework regarding the use of international credits or internationally traded mitigation outcomes (‘ITMOs’).

The rules were elaborated upon by the COP 26 meeting in Glasgow in December 2021. That meeting reached broad agreement on international carbon trading, specifically the recommencement of UN‑endorsed carbon trading described as internationally transferred mitigation outcomes (ITMOs).[148] The detail of the Rules relating to use of ITMOs is still being negotiated, for example, they were also discussed at the climate negotiations in Bonn in June 2022.

Such ITMOs must be ‘real, verified and additional’ (meeting tests of ‘additionality’), shall be measured in metric tonnes of carbon dioxide equivalent (t CO₂-e) (for gases such as CH₄ from landfill gas, for example). Further, ITMOs can only be generated in respect of or representing mitigation from 2021 onward (thereby preventing carryover of old credits, such as Kyoto credits). In addition, use of the ITMO mechanism will require domestic laws and arrangements authorising the use of ITMOs to meet their national targets (NDCs).

Use of ITMOs is subject to an overarching safeguard provision that ‘each participating Party shall ensure that the use of cooperative approaches does not lead to a net increase in emissions of participating Parties within and between NDC implementation periods or across participating Parties.’[149]

The ‘principle of supplementarity’, describes a principle set out in the Kyoto Protocol, that use of internationally traded mitigation efforts should be ‘supplemental to’ domestic action. This implied that the majority of mitigation effort must be derived from domestic effort rather than imported carbon credits.

The main Bill is silent about the question of the extent to which international credits or units can be used to meet Australia’s national targets set under clause 10. Australia’s latest NDC (June 2022) does not rule out the use of international credits.[150]

The NZ Climate Change Response Act 2002 (as amended) contains a principle that ‘Emissions budgets must be met, as far as possible, through domestic emissions reductions and domestic removals.’ (s.5Z).

The UK Climate Change Act 2008 (as amended) partially addresses the question of international credits under a provision headed ‘limits on the use of carbon units’.[151] It also provides a mechanism to prevent the double counting or double use of such credits.[152]

Australia’s new NDC submitted in June 2022, leaves the door open for Australia to make use of internationally traded efforts (ITMO), as follows:

Australia will make corresponding adjustments for any internationally transferred mitigation outcomes, consistent with guidance adopted under Article 6 of the Paris Agreement , should the Australian Government authorise any for use towards NDCs.[153]

Elsewhere in the 2022 NDC, Australia states: 

Should Australia decide to use cooperative approaches under Article 6 of the Paris Agreement towards achievement of its NDC or to authorize the use of internationally transferred mitigation outcomes towards the NDCs of other Parties, it would report on such use or authorization through its Biennial Transparency Reports and consistent with guidance adopted under Article 6.[154]

During a media interview on 14 August 2022 discussing the climate Bills and proposed reform of the Safeguard Mechanism, the Climate Change Minister envisaged an ongoing role for offsets, stating ‘net zero, it does involve offsets’.[155]

The extent to which internationally created offsets may be accepted by the Australian government in future is likely to depend on the outcome of a review into the integrity of ACCU offsets under the Emissions Reduction Fund being chaired by Professor Ian Chubb.[156]

Existing national climate change laws

Existing national laws addressing climate change fall into four main categories. Firstly, there are laws to create a national registry of emissions for the purposes of international reporting on national emissions. The National Greenhouse and Energy Reporting Act 2007 (NGER Act) created a national framework for the reporting and dissemination of information on greenhouse gas emissions, greenhouse gas emissions reduction projects and removal projects, as well as the energy consumption and energy production of corporations.[157] Information gathered enables Australia’s international reporting of greenhouse emissions to the UN.

Secondly, there are laws to create national institutions to report on and monitor climate change. The Climate Change Authority (established by the Climate Change Authority Act 2011) is tasked with conducting reviews under the Carbon Credits (Carbon Farming Initiative) Act 2011, the NGER Act, and under the authority of its own Act, as well as to conduct research about climate change generally.[158] The authority has a Chair, and seven members, plus the Chief Scientist.[159]  The Climate Change Authority Act also established the Land Sector Carbon and Biodiversity Board, which advises the Environment Minister, the Climate Change Minister and the Agriculture Minister about climate change measures that relate to the land sector.[160]

Thirdly, there are laws to recognise projects for climate change mitigation in the land sector, through land-based carbon sequestration projects.

Fourthly, these laws also provide for emissions reporting reduction in other sectors (such as electricity generation, manufacturing, mining, oil and gas, transport, as well as the construction and waste sectors). This body of legislation provides for what is commonly known as the Safeguard Mechanism and the related entity the Emissions Reduction Fund (later rebadged as the Climate Solutions Fund). (See below: ‘Safeguard mechanism’.)

Table 1: Existing national climate and energy laws

There are laws to support and encourage renewable electricity projects in the form of the Renewable Energy (Electricity) Act 2000, administered by the Clean Energy Regulator. Two other key national laws to assist with flows of finance into the renewable energy sector are the Australian Renewable Energy Agency Act 2011 administered by ARENA, and the Clean Energy Finance Corporation Act 2012 administered by the CEFC. The specialised question of approval and regulation of offshore electricity generation from wind, wave and tidal generation is addressed in the Offshore Electricity Infrastructure Act 2021.

Electricity and gas laws

National energy markets are governed by three key laws:

• the National Electricity Law (NEL)
• the National Gas Law (NGL) and
• the National Energy Retail Law (NERL).

These key parts of Australian energy regulation are based on a cooperative intergovernmental legislative scheme.

Although the laws are described as ‘national’, they are not laws enacted by the Commonwealth Parliament. They are actually found in South Australian legislation. The national electricity, gas and retail laws are applied in each of the participating jurisdictions by ‘application statutes’.

A cooperative approach with the states and territories has been taken to date on the making of legislation for the National Electricity Market and its participants.

The main legislation applied at present in relation to the NEM is the National Electricity Law and its associated Rules (NER). That legislation is state ‘mirror’ legislation, first enacted by South Australia, and then applied across the NEM by application statutes, with some minor local derogations (or departures) from the Rules. 

The above partly explains why the National Electricity Law is contained in a schedule to a South Australian Act, the National Electricity (South Australia) Act 1996, which has been adopted by each of the participating jurisdictions.

Similarly, the National Gas Law (NGL) is contained in a schedule to the National Gas (South Australia) Act 2008 (SA) which has been adopted by the participating jurisdictions via their own enactments.

Commonwealth and State Energy Ministers agreed on 12 August 2022 ‘to fast track an emissions objective into the National Energy Objectives’ within the national energy laws.[161] This was part of a broader agreement to a ‘National Energy Transformation Partnership’, that involves an integrated national energy and emissions (inter-governmental) agreement.

Safeguard mechanism

In a June 2022 speech the Minister for Climate Change indicated that the Government would be consulting with industry about changes to the Safeguard Mechanism with an intended start date for those reforms of 1 July 2023.[162] The first round of consultation documents were released on 18 August 2022 with further consultation papers to be published in December 2022.

The safeguard mechanism is a component of the Climate Solutions Fund (formerly the Emissions Reduction Fund), which during the Morrison Government was the Australian Government’s central climate change policy tool.

The safeguard mechanism commenced on 1 July 2016.[163]

In 2014, the Government provided $2.55 billion to the Emissions Reduction Fund, with an additional $2 billion announced in February 2019, as the Climate Solutions Fund.[164] The Fund is administered by the Clean Energy Regulator. The Fund has three key components:

•   a voluntary scheme to credit emissions reductions, whereby eligible activities that have registered with the Clean Energy Regulator to deliver emissions reductions under an approved method can be issued with credits (known as Australian Carbon Credit Units or ACCUs)
•   a process to purchase emissions reductions (via auctions run by the Clean Energy Regulator, whereby the Regulator enters into carbon abatement contracts with successful bidders of registered projects) and
•   the ‘safeguard mechanism’, which requires companies that emit more than 100,000 tonnes of CO_2-e annually to report to the CER in relation to their emissions relative to a baseline that has been set for that company.

The stated aim of the safeguard mechanism is to ensure that emissions reductions purchased through the Emissions Reduction Fund are not displaced by significant increases in emissions elsewhere in the economy.[165]

The legislative framework for the safeguard mechanism is in Part 3H of the National Greenhouse and Energy Reporting Act 2007 (the NGER Act). That Part was inserted in 2014 by the Carbon Farming Initiative Amendment Act 2014, which also established the Emissions Reduction Fund following the repeal of the carbon pricing mechanism.

However, much of the detail relating to the safeguard mechanism is set out in the legislative rules, including the National Greenhouse and Energy Reporting Regulations 2008 and the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 (Safeguard Rule).

Committee consideration

Senate Environment and Communications Legislation Committee

On 28 July 2022 the Senate Standing Committee for Selection of Bills referred the provisions of both the main Bill and the CA Bill to the Senate Environment and Communications Legislation Committee, with a deadline to report by 31 August 2022.[166] Submissions, transcripts of hearings, and the Committee report are available on the Committee inquiry’s homepage.

A total of 186 submissions were received by the Committee.

The Committee noted strong and widespread support for the Climate Change Bills, from organisations, ‘representing all facets of the Australian economy and society’. [167]

The Committee made three recommendations. The first two recommended the Senate pass the Climate Bills. The third recommendation was that:

The government, subsequent to the passage of the bills, undertake further consultation on possible legislative amendments and appropriate policy responses, including reviewing the use of native forest wood waste for renewable energy and the transition arrangements for Australian workers impacted by decarbonisation. [168]

The Committee report also contains dissenting reports from the Coalition and the Nationals, and additional comments from Senator Andrew Bragg, Senator David Pocock and the Australian Greens.

The Coalition Senators’ Dissenting Report raised concerns about a possible increase in climate litigation, about limiting the flexibility of Export Finance Australia, about the lack of a plan in relation to 82% renewables by 2030, and a ‘refusal to engage in conversation on the possibility of nuclear power in Australia’. [169] In addition, it raised process concerns about the Bills, stating ‘the introduction of the ... Bills has been rushed, failing to account for key stakeholders in the creation of these Bills.’ It continues: ‘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.’ It stated a belief that ‘the inquiry process has been constructed in a similarly rushed fashion, seeking to once again obviate genuine criticism and differing perspectives.’ [170]

The Nationals’ dissenting report indicated their disagreement with the majority report and support for the Coalition Senators' dissenting report.[171] The Nationals drew attention to what they saw as ‘the cumulative impacts of transitioning too quickly and the risks that this could cause serious impairments to our food supply, cost of living, energy security and the viability of some of our regional economies’.[172]  They recommended the establishment of a ‘regional transition authority’[173]  and for a Regional Socio-Economic Impact Assessment to be prepared every five years by an independent body such as the Productivity Commission. They recommended a related power to ‘pause … climate ambition in the wake of unintended economic and other events’.[174]  Additionally the National’s Dissenting Report draws attention to economic opportunities associated with future energy transition, involving the need to ‘increase mining of copper, lithium and rare minerals’.[175]

Liberal Senator Andrew Bragg made additional comments, describing the Bill as ‘a genuinely empty piece of legislation’. ^[176] His comments state that the transition to clean energy 'will rely heavily on the capacity of Australia to capture new domestic and foreign capital' and recommended that 'the market should be further supported to invest in low and zero emissions energy and transmission infrastructure.’ In relation to corporations and finance law, he also made the recommendation that 'Australia should be a first mover in legislating an emissions disclosure regime in our corporate law.'[177] He also recommended that ‘the nuclear energy prohibition should be lifted immediately’.[178]

The Greens’ additional comments drew attention to the urgency of climate change, stating ‘There is very little time to waste’. The Greens recommended that:

• the Australian Government should lift targets to 75 per cent by 2030 and net zero by 2035
• no new coal, oil and gas projects proceed
• a climate trigger should be legislated by the Parliament into the EPBC Act
• Australia should sign up to the Global Methane Pledge and join the Powering Past Coal Alliance
• Parliament legislate for a statutory authority to support coal and gas communities during the transition
• the Renewable Energy Act be amended to prevent native forests from being burned as a ‘renewable’ energy source.[179]

Additional comments from Senator Pocock recommended numerous amendments to the Climate Bills including:

• to create mechanisms in the Charter of Budget Honesty Act 1998 ‘that provide transparency to the impact that Federal Government Budget measures have on greenhouse gas emissions’[180]
• ‘such that new or adjusted NDCs are reflected as emissions reduction targets without the need for further legislative amendment’[181]
• to require particular details to be included in the Minister’s annual climate statement, including reference to carbon budgets and the emissions reduction trajectory, and scope 3 emissions[182]
• to embed climate science expertise in the Climate Change Authority.[183]     

Senator Pocock also recommended amendments to the CA Bill relating to decision making by the National Offshore Petroleum Safety and Environmental Management Authority and the Australian Prudential Regulation Authority (APRA). [184] 

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills had not reported on the Bills at the time of writing.

Policy position of non-government parties/independents

The Minister for Climate Change and Energy, Chris Bowen indicated the Government was ‘happy to work with the cross bench on sensible suggestions [that is, amendments] that are in keeping with our agenda and mandate.’[185]

The government supported the majority of amendments proposed by independent MPs in the House of Representatives. The Bills passed the House of Representatives on 4 August 2022, with 9 non-government amendments supported.[186]

Liberal – National Coalition

The Leader of the Opposition, Peter Dutton, indicated that the Opposition would not support the Bills.[187] News reports suggested that the Leader and Deputy leader prevailed in a debate with moderates over whether to support the Bills. [188]

Media reporting indicated that at least two Liberal members may cross the floor to vote with the Government on the Bill in the House of Representatives.[189] However, only Tasmanian MP Bridget Archer did so, with earlier reporting indicating that ‘she believed the Liberal party needed to have a more ambitious 2030 target and [that] she would consider Labor’s legislation on its merits.’[190]

Coalition and National Senators on the Senate Environment Committee issued dissenting reports in the inquiry on the Bills, recommending that they not be passed by the Senate.[191] These reports are discussed above.

Greens

The Greens have called for 75% emissions reduction by 2030 and have criticised net zero by 2050 as an inadequate target.[192] The Greens unsuccessfully moved amendments in the House reflecting their position on these matters.[193] Dr Adam Bandt, leader of the Greens, stated ‘We’ve promised our partners in the region that we’ll act to keep warming under 1.5 degrees, but Labor’s current climate target will make that impossible. A weak emissions reduction of 43% is consistent with at least 2 degrees of warming.’ [194] The Greens have sought to link the issue of the adequacy of the 2030 climate target with the question of approval of new coal and gas projects under Commonwealth law: ‘Even the weak target of 43% by 2030 will be impossible if Labor doesn’t urgently halt new gas projects at Scarborough and the Beetaloo Basin.’ [195]

The Greens indicated concerns with the following aspects of the main Bill: ‘the adequacy of the target, the need for targets to be ratcheted up and for the bill to operate as a floor not a ceiling, the lack of enforcement mechanisms, and new coal and gas projects that would lift pollution.’[196]

The Greens have also sought to raise the issue of a ‘climate trigger’, that is, a provision in the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) which would require consideration of development projects with significant projected future greenhouse gas emissions. To this effect, Senator Hanson-Young has indicated an intention to introduce a private members bill, to insert a climate trigger into the EPBC Act.[197] In a speech to the National Press Club on 3 August 2022, Adam Bandt indicated that the Greens would support passage of the Bills in the Senate.[198]

The Greens issued additional comments to the Senate Environment and Communications Legislation Committee, which are discussed above.[199]

Crossbench parliamentarians

Independents

In mid-July 2022, the Independents Dr Monique Ryan, Dr Sophie Scamps, Zoe Daniel, Kate Chaney, Kylea Tink, Allegra Spender, and Zali Steggall agreed to a joint position following a briefing by Minister Bowen on an early draft of the Bill. They called for a mechanism ‘that would make it more difficult for future governments to shy away from climate action.’[200] They also expressed a desire for ‘language in the bill specifying that the 43% target is a floor not a ceiling, a ratcheting mechanism to boost emissions reduction targets in the future and the establishment of a joint parliamentary committee that would oversee appointments to the Climate Change Authority.’[201]

A number of amendments were proposed by these Independents when the Bills were being debated in the House. These are discussed below.

Andrew Wilkie

Independent MP Andrew Wilkie moved amendments attempting to make the emissions reduction targets more ambitious in terms of the reductions to be achieved.[202]

He described the emphasis on the net zero by 2050 target as:

A deliberate distraction from what’s really needed, because everyone following the science knows that we simply don’t have that long. The planet has already warmed dangerously and is on track for much, much worse way before 2050.[203]

Mr Wilkie called for ‘net-zero carbon as fast as possible, i.e., by 2030.’ He also suggested there was need for the legislation to be ‘laying out the detailed roadmap to get there, including rapidly phasing out coal, gas and oil, and fast-tracking 100 per-cent renewables’.[204]

Mr Wilkie also moved an amendment to require reporting to Parliament to include data on Scope 3 emissions (that is, emissions associated with use of exported products (e.g. coal and LNG)).[205]  Mr Wilkie’s amendments were not supported in the House.[206]

Senate Crossbench

Pauline Hanson’s One Nation and United Australia Party Senator Ralph Babet have both stated their opposition to the climate Bills.[207]

Whilst the Bill was before the House, Independent Senator David Pocock described the Bill as a ‘big step forward’ but media reports indicated that his support was contingent on the outcome of further talks with government.[208] Senator Pocock participated in the Senate Environment and Communications Legislation Committee inquiry into the Bills and supported the Committee’s recommendations, making additional comments that included suggestions for amendments.[209] Senator Pocock’s comments are discussed above.

Centre Alliance Senators Jacquie Lambie and Tammy Tyrrell are yet to publicly confirm their position.[210]

The Jacqui Lambie Network (Senators Lambie and Tyrell) and independent Senator David Pocock have reportedly formed a ‘bloc’.[211] In an opinion piece published in the Canberra Times on 31 August 2022, Senator Lambie advised that she and Senator David Pocock will be moving amendments to the main Bill to ‘require the government to produce estimates of how much of a contribution their federal budget measures are making to our emissions reduction targets’.[212] Senator Lambie stated that the Government prepares ‘financial impact assessments for every policy through the standard budget process. This would work the same, but for carbon’.[213]

Position of major interest groups

The main Bill has widespread support from most industry organisations and environmental groups, with some variation in views on the adequacy of the emissions reduction targets and details of the main Bill. The EM to the main Bill does not provide detailed information about consultation undertaken by the Government but asserts that pre-election consultation was undertaken with ‘key stakeholders and the Australian community to develop the Powering Australia plan and the 2030 greenhouse target it took to the election.’[214] The Powering Australia plan outlines the policies Labor proposes to implement to reduce emissions. The EM to the Consequential Amendments Bill indicates that the Government consulted with ‘ARENA, the Clean Energy Regulator, the CEFC, the Climate Change Authority, Infrastructure Australia, Export Finance Australia, the CSIRO, the Northern Australia Infrastructure Facility and the Department of Foreign Affairs and Trade’ in relation to that Bill.[215]

Climate scientists

The Australian Academy of Science welcomed the introduction of the Climate Change Bill, however it also called for more ambitious emission targets.[216] President of the Academy, Professor Jagadish urged the government to explore how to deliver stronger emissions reductions over the next decade. The Academy also stated that decarbonisation targets would only be achievable with advances in research. Professor Jagadish said: ‘there is no realistic path to decarbonisation for Australia and the world without advances in research and mechanisms to stimulate technology development at scale.’[217] The Academy called for ‘strategies to scale up the development and implementation of next-generation low to zero greenhouse gas technologies as well as large-scale carbon dioxide removal from the atmosphere, both of which are needed to keep below 1.5 degrees of warming.’[218]

The Australian Academy of Technology & Engineering (ATSE) welcomed passage of the Bills through the House of Representatives, stating:

We now need to see rapid investment in a portfolio of low emissions technologies across sectors from energy to construction to agriculture, supported by a clear research agenda and policy framework to provide an environment for industry to act with confidence.[219]

In evidence to the Senate Environment and Communications Legislation Committee inquiry into the Bills, Professor David Karoly, Fellow of the Academy of Science and Honorary Professor of the University of Melbourne, giving evidence in a private capacity, stated:

It is critically important to recognise that the Australian emissions reduction target of 43 per cent is not adequate currently to limit Australia's fair share of global contributions in terms of emission reductions to well below 1½ degrees.[220]

Mining industry

The Minerals Council of Australia (MCA)[221] has indicated support for the mid-term 43% by 2030 target and the Paris Agreement’s net zero by 2050. It stated: 

The MCA and its member companies support the Paris Agreement ’s goal of global net-zero emissions by 2050.[222]

While not commenting specifically on the main Bill, the Australian Petroleum Production & Exploration Association (APPEA), representing the upstream oil and gas industry, has stated ‘Net zero emissions by 2050 should be the goal of national and international policy.’[223]

Tamboran Resources, a company involved in Beetaloo basin gas extraction projects in the Northern Territory, made a submission to the Senate Inquiry into the Bill. It claimed that ‘the Beetaloo Sub-basin is arguably Australia’s largest current opportunity to reduce global GHG emissions’, on the premise that exported gas can displace coal in power generation, thereby reducing emissions compared to a business as usual (BAU) scenario.[224] 

First Nations People[225]

Australia’s First Nations people (like other Indigenous Peoples worldwide) will be disproportionately impacted by climate change. Given the significant area of land and waters in Australia that First Nations people currently manage, co-manage, or have a cultural or socio-economic connection with, such impacts are likely to be wide-ranging and long-term. Indigenous people have stated that likely impacts extend beyond natural heritage but also include risks to cultural heritage. In the recent Juukan Gorge inquiry, the Australian Greens (Senator Thorpe) noted ‘the impacts of climate change will increasingly threaten cultural heritage protection and contribute to the ongoing destruction and desecration of sites that should be protected.’[226]

First Nations representatives have raised similar concerns about those facing the impacts of increased storm events and sea level rise in the Torres Strait, who are likely to be on the front line of negative change. The Kimberley Land Council (KLC) has, in the past, highlighted the effects of climate change in particular on remote areas in Australia noting that this is ‘mostly where Indigenous peoples are living’ and concluding that climate change will have long lasting effects on ‘the environment around [First Nation] lands, the biodiversity, endangered species, you name it, a whole range of things…’[227] Similar views have been put forward by a First Nations Climate Justice Panel in a 2021 report,[228] with specific impacts predicted for Arnhem land and Kakadu as well as the Wet Tropics region of Northern Australia.[229] Such impacts will also extend to First Nations health and wellbeing.[230]

The Climate Change Minister, in a speech to the National Press Club on 29 June 2022 on the Climate Bills, said he would be visiting the Torres Strait to meet with communities to discuss climate change. He stated, ‘we have Australian citizens in the Torres Strait who are living with the impacts of climate change right now.’[231]

Agricultural sector

In its submission to the Senate Legislation Committee, the National Farmers’ Federation (NFF) expressed qualified support for the Bills, provided that they “do not provide unnecessary regulatory impediment” to agriculture. The NFF stated: "Climate change is a significant concern for the agriculture sector…[and]… This is framework legislation ... This provides a level of business certainty that is otherwise absent.”[232] 

In other documents, the NFF stated that it has supported ‘an all-economy net zero emissions by 2050 target since 2020’[233] but observed that the enhanced NDC ‘presents both risks and opportunities for Australian agriculture.’[234]

NFF’s members in the past have voted in favour of net carbon zero by 2050,[235] though have expressed concern that there should not be ‘overreach on ambition for agriculture or expecting the ag sector to be the solution for everyone else’s’ obligations’.[236]

AgForce Queensland Farmers Limited (AgForce) has also agreed to the 2050 ‘carbon neutrality’ objective, and called for collaboration with the science community to develop an evidence based approach to carbon baselines.[237]

Graingrowers expressed support for net zero carbon by 2050, but argued for a more comprehensive package:

Putting the target in law is one thing but now we want to see government back our industry and fast-track the development of tools, data and technologies so farmers can measure their baseline [and] understand which farming practices best deliver sustainable growth…[238]

As with the agricultural bodies above, Graingrowers expressed concern about the risk of regulatory settings that might ‘penalise farmers and threaten food security.’ [239]

Business associations

Three major business representative organisations, the Business Council of Australia, the Australian Industry Group, and the Australian Chamber of Commerce and Industry have all expressed support for the main Bill.[240] The Chief Executive of the Australian Industry Group, Innes Willox, said the Bill was a positive start:

...in their current form they 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 out ability to meet other economic and social objectives including high employment growth and improving living standards.[241]

The Business Council of Australia has previously indicated support for ‘achieving a net zero emissions economy by 2050’, with their October 2021 report Achieving a net zero economy outlining a proposed transition pathway.

Responding to Australia’s new NDC, Business Council chief executive, Jennifer Westacott said:

A global commitment from government to lock in its emissions reduction target and policy should be a line in the sand in Australia’s decades long ‘climate wars’. It’s time to move beyond the debate about targets and get on with the ‘how’. The global momentum for decarbonisation is unstoppable…. Australia can’t afford to stall progress again because failure will see Australians miss out on new opportunities, new industries and better jobs.[242]

Insurance industry

The Insurance Council of Australia (ICA) has warned that some Australian properties could become more difficult to insure in the future due to the increasing frequency and severity of extreme natural hazard events such as bushfires, floods, hailstorms and cyclones.[243]

The ICA expressed support for the climate Bills and their policy objectives in a submission to the Senate legislation inquiry. It suggested three additional policy measures, but no specific amendments to the Bills. The measures suggested are:

• Greater resilience investment from all governments to better protect communities
• Improved resilience and building quality in the built environment, including strengthening the National Construction Code and building standards and improving land use planning
• The removal of state taxes on insurance products to improve insurance affordability for at-risk communities.[244]

Finance and banking sector

The Financial Services Council (a peak body for the financial services sector) expressed support for the climate bills. In a submission to the Senate Committee inquiry on the Bills, it stated: ‘the lack of policy certainty has inhibited investment opportunity in Australia and the ability of funds to effectively manage climate risk.’[245]

The Australian Banking Association has expressed support for the goals of the Paris Agreement. It has indicated support for ‘accelerating the reduction of emissions by 2030 and a balanced and orderly transition to a net zero emissions economy by 2050.’[246]

The Reserve Bank of Australia expressed a general position on the risks posed by climate change to the financial sector, via a speech by the (then) Deputy Governor, Dr Guy Debelle, in October 2021.

Climate change is a first-order risk for the financial system. It has a broad-ranging impact on Australia, both in terms of geography and in terms of Australian businesses and households. Most Australian financial institutions now recognise climate as a risk. The assessment of climate risks has evolved considerably over the past five years, but there remains considerable scope for further improvement…These challenges make the case for public policy to provide regulatory guidance about what standards of risk management should look like and to co-ordinate outcomes in areas such as disclosure.[247]

Unions

The ACTU welcomed the introduction of the Climate Bills to Parliament.[248] In its submission to the Senate Legislation Committee inquiry, the ACTU drew attention to the non-engagement of the Bill with ‘just transition issues’, that is the impact of climate change response measures on workers. It called for the ‘establishment of a national Energy Transition Authority, as well as the inclusion of Just Transition principles, per the Paris Agreement, in the objects and functions of the Climate Change Authority and the relevant Government entities and legislation included in the Consequential Amendments Bill.’

The submission expressed the view that:

the concept of a just transition should be elevated on the climate policy agenda, and should receive urgent and comprehensive treatment by the Government in the near term, including the establishment of a national Energy Transition Authority to ensure Australia’s emissions reduction trajectory is delivered in a manner consistent with the Paris Agreement ’s commitment to take into account the imperatives of a just transition for the workforce.[249]

Environmental organisations

The Australian Conservation Foundation (ACF) welcomed Australia’s increased target for 2030, describing it as a ’meaningful boost’ to Australian actions to reduce emissions.[250] The ACF called for the addition of a ‘review and ratchet mechanism ... so Australia’s climate ambition increases in line with the most up-to-date science’.[251] ACF’s chief executive, Kelly O’Shanassy said:

The bill needs to be clear that when Australia ratchets up our target as part of our obligations under the Paris Agreement, it automatically updates our target in this legislation and becomes law.[252]

Greenpeace Australia Pacific has expressed a similar view.[253]

The Climate Council welcomed the main Bill, saying ‘this new legislation can act as a springboard for Australia to cut emissions and grasp the incredible opportunities that are within reach as one of the sunniest and windiest places on the plant.’[254]

The Environmental Defenders Office (a community legal centre with a focus on environmental law) expressed general support for the Bills. It suggested modifications involving ‘science-based enforceable emissions reduction targets’, which it argued would entail a target of 74% reductions from 2005 levels by 2030, and net zero by 2035. The EDO submission to the Senate Inquiry suggested: ‘Parliament must clarify the next steps that will be taken to ensure that the targets are sufficient, meaningful and will be effectively achieved.’[255] It lodged a detailed document (‘A Roadmap for Climate Reform’) containing ‘58 recommendations for the reform of Australian climate law’.[256]

Conservative commentators

Some media commentators have raised concerns about the economic impact of the climate Bill, claiming that it would lead to an economic ‘free fall’.[257]

Others have raised questions about whether its enactment might enable climate change litigation in relation to coal and gas projects, with former Prime Minister Tony Abbott predicting an ‘absolute blizzard of litigation’.[258] Although the majority of his comments referred to standing provisions under the EPBC Act rather than the present Bills, he stated ‘it’s going to get much, much worse, especially if there’s a legislated emissions reduction target by a particular date.’[259]

The Institute for Public Affairs has raised concerns about the ‘ratchet clause’ (cl.10), claiming that it was anti-democratic on the basis that it would ‘allow the government to further increase emissions targets without the consent of Parliament, whereas reducing or repealing the targets would require separate legislation’ and stated that ‘if targets are to be legislated, Parliament’s approval should be required for both increases and decreases.’[260]

Financial implications

There is no direct government expenditure associated with the Bills, as there are no new agencies or programs created.

The Financial Impact Statement in the Explanatory Memorandum states that additional resourcing will be provided to the CCA through the Powering Australia plan (the ALP’s pre-election policy on climate and energy) and those funds will be provided through the normal budgetary process.

The anticipated future costs of the counterfactual scenario, i.e. of not passing the Bill, are difficult to estimate. These are related to the cost of failing to take action on anthropogenic (human induced) climatic disruption. (See above: p.20, ‘Economic costs and opportunities’.)

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011, the Government assessed the Bills’ compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act.[261] The Government considers the Bills to be compatible with the specified human rights because they ‘promote the protection of human rights’.[262] The Statements of Compatibility state that ‘The Australian Government recognises that climate change can impact upon the enjoyment of human rights.’[263]

Parliamentary Joint Committee on Human Rights

At the time of writing, the Parliamentary Joint Committee on Human Rights (PJCHR) is yet to consider the Bills.

The PJCHR may consider the Bills at its meeting scheduled for 7 September 2022.

Main provisions

This section first sets out the main provisions of the Main Bill and, following that, those of the CA Bill.

Main bill

Overview of Parts

• Part 1 includes objects, commencement, and definitions.
• Part 2 provides for Australia’s emission reduction targets to be achieved by 2030 and by 2050.
• Part 3 requires the Minister to prepare an annual climate change statement to be tabled in each House of Parliament.
• Part 4 requires the Climate Change Authority (CCA) to provide advice to the Minister that relates to the preparation of an annual climate change statement. It also requires the CCA to advise the Minister on the emission reduction targets that the CCA considers should be included in a new or adjusted nationally determined contribution (NDC) under the Paris Agreement.
• Part 5 makes provision for periodic reviews of the Act.

Part 1 – Preliminary

Part 1 sets out preliminary matters, including objects, commencement, and definitions.

Objects

The proposed objects (clause 3) refer to the temperature-based goals of the Paris Agreement (in Article 2.1(a)).

The objects are to ‘set out’ Australia’s emission reduction targets which contribute to global goals of ‘holding the increase in the global average temperature to well below 2°C above pre-industrial level and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.’

That drafting partially reproduces the objective of the Paris Agreement set out in Article 2.1(a), but omits the latter part of Article 2.1(a) where the Agreement states that the global goals of limiting temperature increase are set: ‘recognizing that this would significantly reduce the risks and impacts of climate change.’

The objects clause was expanded by amendments made in the House of Representatives.[264] This means that the Bill now describes climate change as an ‘urgent threat’. To elaborate, new paragraph 3(aa) refers to an object of the Bill as being ‘to advance an effective and progressive response to the urgent threat of climate change drawing on best available scientific knowledge’. [265] 

Constitutional basis

The main Bill does not state the constitutional basis upon which its provisions rely, and the EM does not elaborate on this question. By contrast, previous Commonwealth climate change laws have stated the constitutional basis upon which they rely.[266]

However, given the frequent reference to the Paris Agreement in the Bill (with 19 mentions), it is likely that the main Bill is enacted in reliance upon the Commonwealth’s external affairs power, in section 51(xxix) of the Constitution. Previous case law from the High Court has noted a law implementing a treaty is valid insofar as it is an appropriate means for giving effect to the object of the treaty.

The provisions of the main Bill are directly related to the subject matter and articles of the Paris Agreement. Moreover, the legislation is likely to be considered an appropriate means of (and adapted to) giving effect to specific matters of international concern.[267] As the Bill does not appear to resemble a disproportionate attempt to ‘attract power’ to the Commonwealth, the intended implied reliance upon the external affairs power seems uncontroversial. 

Read as a whole, however, the main Bill does not appear to express an unequivocal intent to domestically implement the entire Paris Agreement into domestic law. For example, it does not mention Article 6 of the Paris Agreement, which relates to voluntary cooperation on a bilateral or multilateral basis, particularly in relation to internationally traded mitigation outcomes (ITMOs).

Nevertheless, High Court authority suggests that partial implementation of a treaty is still acceptable where it does not make the law substantially inconsistent with the treaty as a whole.[268]

Definitions

The Paris Agreement is defined in the main Bill (clause 5) as ‘the Paris Agreement, done at Paris on 12 December 2015, as amended and in force for Australia from time to time.’ [emphasis added]

This drafting seems intended to provide for future amendments to international climate law, or more specifically, amendments to the Paris Agreement. That conclusion is supported by the EM,  which states that this is ‘defined to mean the agreement … and any subsequent amendments that are in force for Australia.’[269]

This approach is supported by the High Court’s interpretation of the external affairs power, as it ‘extends to support a law calculated to discharge not only Australia’s known obligations but also Australia’s reasonably apprehended [i.e., future] obligations.’[270]

The international law relating to climate change is constantly evolving due to ongoing international meetings on climate change. For example, both the UNFCCC and the Paris Agreement are being clarified and expanded upon by a host of decisions of the international climate change meetings (known as the COP and the CMA). As explained by authors of an insiders’ account of the Paris negotiations, ‘while Parties may no longer discuss the framework itself, they will continue negotiating about its further specification and implementation.’[271] 

A related question arises as to whether the main Bill seeks to incorporate these additional evolutions of the Paris Agreement framework, as a whole, or whether it can be more narrowly read as only encompassing amendments to the text of the Paris Agreement itself. Under international environmental law, amendments to the text of a treaty itself are rare, with the preferred option being to resolve, interpret or clarify aspects related to implementation and application of the treaty regime in recorded decisions of the Conference of the Parties and other related documents (such as guidelines etc).

Constitutional basis – Consequential Amendments Bill

The clauses of the CA Bill—as opposed to the main Bill—set out to clarify the constitutional basis relied upon in some of the amended Acts [see below, p. 71].

Interaction with State and Territory laws setting climate targets

The Bill does not bind the Crown in right of the States, the NT or the ACT (clause 6). It is clearly stated that Commonwealth targets (in clause 10(1)) are not intended to exclude or limit State or Territory legislation that can operate concurrently (subclause 10(3)).

Therefore, whilst States and Territories have their own climate change legislation in place (see above), including the setting of different targets, there is likely to be no legal inconsistency in the co-existence of national and sub-national targets.

Part 2—Australia’s greenhouse gas emissions reduction targets

Subclause 10(1) provides for Australia’s greenhouse gas emission targets:

• reducing Australia’s net greenhouse gas emissions to 43% below 2005 levels by 2030 (paragraph 10(1)(a))
• reducing Australia’s net greenhouse gas emissions to zero by 2050 (paragraph 10(1)(b)).[272]

Subclause 10(2) states that these targets are to be interpreted in a manner consistent with the Paris Agreement and Australia’s current NDC.

The main Bill does not provide a mechanism by which the targets may be more efficiently updated, for example, by the making of a regulation or other legislative instrument. Instead, it anticipates the making and variation of NDCs directly under the Paris Agreement. Australia is obliged to adjust its NDC at least every five years.[273]

Subclauses 10(4), (5), and (6) concern the Executive’s power to make or vary NDCs. Subclause 10(4) provides that the exercise of Executive power to prepare and communicate a new NDC, or adjust an existing NDC, is not limited by having the targets set out in the Bill.

Subclauses 10(5) and (6) reiterate the so-called ‘ratchet’ mechanism, or principle of progression in the Paris Agreement.[274] These clauses codify some of the provisions of Article 4 of the Paris Agreement which requires that each new NDC represent a ‘progression’ beyond the current NDC, and that each adjustment to an NDC ‘must represent an enhancement of Australia’s level of ambition’.

This interpretation is evident from the drafting of the Bills and from the Explanatory Memorandum to the main Bill which states:

Mirroring the Paris Agreement principle against ‘backsliding’ – that is, the weakening rather than strengthening of ambition over time – subclause 10(5) makes clear that any new nationally determined contribution under the Paris Agreement must represent a progression beyond the nationally determined contribution in place at the time. Subclause 10(6) similarly confirms that any adjusted nationally determined contribution must also represent a more ambitious target than the nationally determined contribution immediately preceding it.[275]

The implementation of these Paris Agreement protections into Australian law is significant. It potentially makes available judicial review in domestic courts (either under the Administrative Decisions (Judicial Review) Act 1977, or the original jurisdiction of the High Court) of any new or adjusted NDC on the grounds of non-compliance with subclauses 10(5) and 10(6) of the Bill. The Paris Agreement does not prescriptively specify how progression is defined or determined.

NDCs are not legislative instruments. The main Bill does not provide for NDCs to be made in the form of a legislative instrument.[276]

Future Parliaments will always have the power to pass amendments to the main Bill if adopted, to vary or introduce new emission targets, including, theoretically, at a reduced target level. A future Parliament could also legislate to repeal the Act in its entirety, or repeal or amend the ratchet provisions discussed above. Although State Parties like Australia can choose their level of climate ambition, their participation remains subject to the Paris Agreement’s principle of progression (Article 4.3).  Accordingly, any regression from a previously higher target would be in breach of Article 4.3, though perhaps not actionable under Australian domestic law.

It is also possible for the Australian Parliament to adopt a different approach to legislating for the impacts of climate change (for example, following the United Kingdom’s model with carbon budgets). The High Court has made clear that the implementation of international conventions and their associated obligations, are largely a matter for the State Party concerned, and thus Australia has a wide discretion as to how it seeks to implement its treaty obligations into domestic law.

Global Stocktake mechanism

The main Bill does not refer to the ‘global stocktake’ mechanism of the Paris Agreement, as that is a global, collective mechanism (in Article 14), distinct from the ratchet mechanism.

Australia’s participation in the Stocktake is implied by virtue of its status as a Party. Article 14.3 indicates that the outcome of this global review is intended to have implications for revision of national NDCs from time to time:

The outcome of the global stocktake shall inform Parties in updating and enhancing, in a nationally determined manner, their actions and support.

The Bill (paragraph 15(4)(b)) does refer to Article 4.11 of the Paris Agreement. For reference, that sub-Article states ‘A Party may at any time adjust its existing nationally determined contribution with a view to enhancing its level of ambition…’

Part 3—Annual climate change statement

Clause 12 requires the Minister to prepare and then table in Parliament an annual climate change statement, informed by advice from the Climate Change Authority.

In summary, taking into account amendments made in the House of Representatives, the statement must relate to:

1. progress made towards achieving Australia’s targets
2. international developments relevant to climate change
3. climate change policy
4. effectiveness of Commonwealth policies in terms of achievement of the targets and reducing emissions in the sectors covered by those policies[277]
5. the impact of the Commonwealth’s climate change policies to achieve Australia’s greenhouse gas emissions reduction targets on rural and regional Australia, including the social, employment and economic benefits being delivered by those policies in rural and regional Australia.

Paragraph (e) was inserted as a result of an amendment proposed in the House by Independent MP Dr Helen Haines.[278]

Note that Clause 12 is indirectly modified by the objects clause (paragraph 3(c)), as this refers to an objective to ‘ensure that independent advice from the Climate Change Authority’ informs both the annual climate statements and the emissions reduction targets contained in a new or adjusted NDC. 

Although paragraph 12(1)(d) refers to the effectiveness of Commonwealth policies, the Bill does not specify statutory criteria to guide the evaluation. Mention of ‘sectors’ in that paragraph will enable evaluation of the effectiveness of policies applying to the transport sector, for example.

Climate targets legislation in other jurisdictions such as the UK provide for a climate statement to Parliament that is prepared by a statutory authority rather than by the Minister.[279] The UK law requires preparation of ‘carbon budgets’, and the statement to Parliament must refer to progress that has been made towards meeting those budgets.

The ‘year’ referred to in this clause is a financial year. Each statement must be prepared within 6 months after the end of each financial year, and then tabled within 5 sitting days after preparation.

Part 4—Advisory functions of the Climate Change Authority

The CCA has existing functions set out in section 11 of the Climate Change Authority Act 2011, (CCA Act) mainly relating to reviews of existing climate and energy laws (including the Carbon Credits (Carbon Farming Initiative) Act 2011 and the National Greenhouse and Energy Reporting Act 2007). The existing drafting of the CCA Act enables it to be given additional functions by other Commonwealth laws.[280]

Those functions are to be performed having regard to principles set out in the CCA Act (section 12). Those principles include, that measures to respond to climate change should be economically efficient, environmentally effective, equitable, and should ‘take account of the impact on households, business, workers and communities’. The CCA is already required to have regard to supporting an effective global response to climate change; and consistency with Australia’s foreign policy and trade objectives.

Part 4 of the main Bill provides for two new advisory functions of the CCA – regarding preparation of an annual climate change statement (clause 14), and advice on emission reduction targets to be included in a new or adjusted NDC (clause 15).

Advice on annual climate change statement

Clause 14(1) requires the CCA to give the Minister advice relating to the preparation of the annual climate change statement (see: clause 12). In providing this advice, the Authority may conduct public consultation, but is not required to (subclause 14(3)). It must publish, and cause to be tabled in Parliament, any written advice given to the Minister (subclause 14(6)). The tabling requirement was added by an amendment moved in the House of Representatives by Independent MP Kylea Tink.[281]

The Minister must have regard to any advice given by the CCA when preparing the annual climate change statement (subclause 14(4)). However, the Minister may also have ‘regard to other advice’ (subclause 14(5)). Where advice is to be wholly or partially rejected, the Bill provides for a statement of reasons to be tabled (subclause 14(7)).

Advice on emissions reduction targets

Subclause 15(1) requires the CCA to give the Minister advice relating to emission reduction targets to be included in any new or adjusted NDC (under Part 2), if the Minister requests that advice. As a result of amendments moved in the House of Representatives by Intendent MP Helen Haines and Greens MP Elizabeth Watson-Brown, advice given under subclause 15(1) must include:

• advice on the social, employment and economic benefits of any new or adjusted greenhouse gas emissions reduction targets and associated policies, including for rural and regional Australia
• advice on the physical impacts of climate change on Australia, including on rural and regional Australia
• an explanation of how the greenhouse gas emissions reductions targets have taken into account the matters set out in Article 2 of the Paris Agreement, including the temperature-related goals.[282]

The CCA must conduct public consultation in providing this advice (clause 15(3)). The CCA must publish a copy of any advice it gives to the Minister on its website (subclause 15(6)).

This advice is to be provided on request of the Minister. The Minister is required to request such advice at least once every five years (subclause 15(2)).

The EM indicates that the intention of specifying ‘‘every five years’ is ‘to align with the five-yearly cycle of successive nationally determined contributions under the Paris Agreement.’[283]  The EM can be referred to in interpretation of the provision (section 15AB of the Acts Interpretation Act 1901).

Amendments moved successfully in the House of Representatives by Independent MP Zali Steggall require the Commonwealth to receive advice from the CCA before communicating a new NDC for 2035, 2040 or 2045, except in circumstances where a new NDC needs to be communicated urgently (with a requirement for the Minister to consult the CCA before making a decision that the circumstances are urgent). The obligation to receive CCA advice before communicating a new NDC does not apply to NDC adjustments.[284]

The Minister must have regard to this advice when determining Australia’s greenhouse gas emission targets to be included within a new or adjusted NDC (subclause 15(4)).

The Bill leaves the Minister with the final decision about revised targets, and states that the Minister is not prevented from considering other advice (subclause 15(5)).

The Minister must prepare a written response to advice received under this clause within six months of receiving that advice. If the Minister decides not to accept that advice, they must provide reasons (paragraph 15(7)(a)).

Paragraph 15(7)(b) provides that the Minister must table the statement of response within 15 sitting days. 

Part 5—Periodic reviews

Part 5 provides that the Minister must cause independent reviews to be conducted into the operation of the Act.

Each review must provide for public consultation (subclause 17(2)).

The first review must be completed within five years after commencement of the Act (subclause 17(5)) and each subsequent review must be completed within ten years after completion of the previous review (subclause 17(6)).

The Minister must table a review within 15 Parliamentary sitting days of receiving it (subclause 17(4)). Given that sitting days are limited in a calendar year, 15 sitting days may in practice be multiple months, depending on the day the review is tabled.

Observations

Part 5 does not contain detail regarding the scope or terms of reference for these periodic reviews of the Act. It does not specify criteria—such as environmental or scientific considerations—nor does it refer to administrative or economic criteria.

Another observation is that the review is to examine the ‘operation of the Act’ rather than whether the Act has been meeting its objectives. By comparison, the review clause in the national environmental law, the EPBC Act, includes an examination of ‘the extent to which the objects of this Act have been achieved.’[285]

Clause 17 does not clarify the meaning of ‘independent’ in the phrase ‘independent reviews’. The Act does not request the Climate Change Authority to conduct the reviews, although the CCA is tasked by law with reviewing other climate change and energy legislation periodically. Subclause 17(3) does not specify the qualifications, experience or expertise of persons that are appointed to conduct a review of the Act.

Key Issues

This section sets out key issues arising from the Climate Change Bill. A later section addresses the Consequential Amendments Bill (below, p. 68). 

Key issue 1 - Adequacy of targets

Although numerous stakeholders expressed support for the Bills, a number of scientists, learned academies of science, and environmental groups who made submissions to the Senate Committee expressed concerns that the emission reduction targets should be strengthened, particularly if the 1.5-degree climate goal in the Paris Agreement is to be met.  

The Australia Institute submitted that the 2030 target[s] ‘should be revised to reflect the ambition required to meet the Paris Agreement [temperature] goals.’[286]

In relation to target setting, concerns were raised by the Greens and some of the Independents about whether the targets will be set with sufficient reference to experts, or expert bodies on climate science.

In a similar vein, concerns were expressed as to whether the targets in the main Bill are consistent with Australia undertaking its ‘fair share’ of the global climate change mitigation effort, particularly when its relatively high per capita emissions are considered. A submission to the Committee from Associate Professor Foerster of Monash University Business School drew attention to the provision in the Scottish Climate Change Act which specifically addresses that issue.[287] The Scottish law includes a requirement to consider what a fair contribution to stabilising the global climate system would be.[288]

As discussed above, the Greens and Independent MP Andrew Wilkie proposed amendments containing more ambitious targets, but these were not supported in the House of Representatives.[289]

Emissions reduction targets

The authors of the Climate Action Tracker (published by Climate Analytics and the NewClimate Institute) have argued that 2030 targets are perhaps more important than the longer term 2050 target.

At their best, well-designed and ambitious net zero targets are key for reducing global carbon dioxide and other greenhouse gas emissions to net zero around 2050 and 2070, respectively. This is necessary to keep to the Paris Agreement’s 1.5°C temperature limit … At their worst, net zero targets are unclear or not backed up by real-world action. Net zero targets can distract from the urgent need for deep emissions reductions if 2030 targets and short-term action are inconsistent with their achievement, allowing governments to ‘hide’ behind aspirational net zero targets.[290]

Although other nations have more ambitious emissions reduction targets in their climate laws, a future Australian Parliament could amend the proposed law to specify more stringent targets.[291]

More ambitious targets have been set by European nations:

• Germany 65% cut by 2030, 88% less by 2040, carbon neutrality by 2045.[292]
• Sweden 63% cut on 1990 levels by 2030, 75% cut by 2040, and negative net emissions by 2045[293]
• Finland 60% cut by 2030, 80% cut by 2040, carbon neutrality by 2035, based on a new law coming into effect in July 2022.[294]
• Denmark 70% cut on 1990 levels by 2030, climate neutrality by 2050.[295]
• The EU at least 55% reduction by 2030, climate neutrality by 2050.[296]

Definition of greenhouse gas, the targets and of net-zero

Subclause 10(1) of the main Bill sets out emission reduction targets for 2030 and 2050.

The terms ‘greenhouse gas’ and 'net' are not defined by the Bill (Clauses 3, 5, 10). In particular, the expression of the notion of reducing ‘Australia’s net greenhouse emissions to zero by 2050’ is not detailed (paragraph 10(1)(b)). It is simply expressed as ‘net greenhouse gas emissions to zero’. The lack of detail is evident by comparison with other climate change laws, set out below.

The justification for not including these definitions and clarifications within the main Bill is not immediately evident. It appears to be that the Bill is only aiming to record domestically those actions and commitments which are being made internationally by the Executive, in response to the requirements of the Paris Agreement, as amended from time to time. In other words, it is evident that Australia will follow the international carbon accounting and reporting requirements as recorded in the accumulated decisions of the Parties to the climate agreements, as communicated by the UNFCCC Secretariat. These requirements are referred to and specified indirectly in Australia’s most recent NDC.

In relation to the definition of ‘greenhouse gas’, Australia’s most recent NDC says that the gases covered by the NDC are Carbon dioxide (CO₂); Methane (CH₄); Nitrous oxide (N₂O); Hydrofluorocarbons (HFCs); Perfluorocarbons (PFCs); Sulphur hexafluoride (SF₆); and Nitrogen trifluoride (NF₃). The NDC also states that the target covers “All sectors, categories and carbon pools, as defined by the IPCC 2006 guidelines”.[297]

However, two points can be identified for discussion. First, in some instances, there may be ambiguity in the international rules which allows room for interpretation by Australia. Secondly, the lack of certainty about particular terms, or failure to define them in the Bill, may give rise to future questions of interpretation of those words and phrases.

Selected definitions in three comparable Acts

New Zealand

New Zealand’s Climate Change Response Act 2002 (as amended in 2019) aims to ensure that ‘net accounting emissions of greenhouse gases in a calendar year, other than biogenic methane, are zero by 1 January 2050’.[298] It gives definitions of ‘gross emissions’ and ‘net accounting emissions’ which clarifies the role of removals in the LULUCF sector (land use, land-use change, and forestry) as well as giving a definition of offshore mitigation. The latter definition refers to quality issues including ensuring that emissions reductions and traded allowances are robustly accounted for so that double counting is avoided.[299]

Scotland

Scotland’s Climate Change (Scotland) Act 2009 (as amended in 2019) establishes a net-zero emissions target for 2045 of 100% below the baseline.[300] The baseline year varies for different greenhouse gases (e.g. 1990 for carbon dioxide and methane, 1995 for HFCs).[301]

United Kingdom

The United Kingdom’s Climate Change Act 2008 (as amended by the Climate Change Act 2008 (2050 Target Amendment) Order 2019) establishes a net zero emissions target for 2050 of 100% below the 1990 baseline.[302] This 2050 target is defined by use of the term ‘carbon account’ and is linked to carbon budgets. The UK Act gives a definition of greenhouse gas, referring to six different gases and groups of gases.[303] It also clarifies that measurements are to be measured or calculated in ‘tonnes of carbon dioxide equivalent’ (or CO_2-e).[304] The UK Act also gives a definition of ‘international carbon reporting practice’.[305]

Key Issue 2 – Scientific input to decision making

Following some amendments, the Bill now directly refers to climate science. The House voted to insert a reference to climate science in the objects of the main Bill: subclause 3(aa). This new object, first amongst the list of objects, will be ‘to advance an effective and progressive response to the urgent threat of climate change drawing on the best available scientific knowledge’.[306]

The main Bill also indirectly provides for scientific input in relation to the targets, via the provisions that enable the Climate Change Authority to give advice to the Minister on reduction targets to be included in a new or adjusted NDC (clause 15). Likewise, it provides in Clause 14 for the CCA to give advice to the Minister in relation to the annual climate statement to Parliament.

One of the members of the CCA is the Chief Scientist. Whilst there is broad discretion for appointment of additional scientists to the CCA, the number of scientists is not mandated by the Climate Change Authority Act 2011. Section 17 of that Act refers only to a Chair, the Chief Scientist and ‘7 other members’.

Prof Frank Jotzo, Professor of Economics at the Australian National University’s Crawford School, writing to the Senate Committee, submitted ‘a strong role for independent institutions in climate change policy is an important element of sound climate change policy.’ He referred to the CCA’s advisory functions to the Minister (under Part 4 of the main Bill), stating:

The legislation as it stands, and as it would stand as a result of these Bills, have left and would leave decisions about resourcing for the CCA to the government of the day. Experience has shown that this can lead to governments choosing to provide low levels of funding which in turn hamper the work of the CCA. This institutional vulnerability should be remedied as far as possible within the constraints. The Bill should require the CCA to be funded at an appropriate level to adequately fulfil its roles.[307] 

Science & Technology Australia, a peak body for the science and technology sectors submitted: 

The Minister's annual climate change statement could also include a section explicitly acknowledging key scientific developments in climate understanding - this will ensure all policy advice is underpinned by the latest scientific evidence.[308]

Science provisions in three comparable Acts

To facilitate comparison, the next section summarises provisions of Victorian, UK and NZ climate Acts, as they refer to scientific advice.

Climate science in the Victorian Act

The Victorian Climate Change Act 2017 makes several references to climate science. It provides for the Minister to prepare and table in Parliament a climate science report every five years. [309] The Act states that the Minister ‘must ensure that a report sets out … a synthesis of the best practicably available climate change science and its implications for the State and any regions’.[310]

Further, when preparing to determine interim emission reduction targets, the Minister must obtain ‘independent expert advice’ which must include ‘indicative [emissions reduction] trajectories’ to achieve the long-term target and the expert who prepares the advice ‘must consider’ matters including ‘relevant up-to-date climate science, including any climate science report.’[311]

Likewise, when preparing a statutory climate change strategy, the Minister ‘must consider’ the expert advice mentioned above plus ‘any climate science reports’.[312] A similar requirement applies in relation to preparation of a statutory adaptation action plan.[313] 

Climate science in the UK Act

The UK Climate Change Act 2008  contains 7 instances of the word science or scientific.[314] The UK Act enables the Secretary of State to amend the 2050 target or baseline year where ‘there have been significant developments in scientific knowledge about climate change’.[315]

Likewise, it enables the Secretary to amend target percentages on the same basis.[316] Those clauses are expressed in terms of new knowledge since the passing of the Act and actions previously taken under it.

When setting climate budgets, the Secretary can take into account scientific knowledge about climate change.[317]

Climate science in NZ Act

The Climate Change Response Act 2002 of New Zealand establishes a Climate Change Commission with purposes including the provision of ‘independent, expert advice to the Government on mitigating climate change’.[318] It is assigned 13 specific functions and one general function in relation to climate change targets and emissions budgets.[319]  The Commission is required to have regard to (‘must consider’) ‘current available scientific knowledge’ when performing its functions and duties.[320]

The NZ Act requires both the Minister and the Climate Change Commission to have regard to ‘a broad range of domestic and international scientific advice’ when advising on and setting emissions budgets.[321] 

Key issue 3 – Are the Targets a Floor or Ceiling?

A key issue in debate on the Bill in the House of Representatives concerned whether the emissions reduction targets in the Act could be increased (strengthened) or decreased (weakened), by whom and how. 

In particular, concerns were expressed over the potential for a situation to develop involving inconsistent, rather than parallel targets. The background is that one target is stated internationally in Australia’s NDC, and the proposal in the Bill is for the target to also be stated in national law. Some MPs observed that, in the future, the nationally legislated target could potentially become inconsistent with the internationally expressed target, especially if the Executive updated the NDC but had not yet succeeded in persuading the Parliament to amend the Act to reflect that change.[322]

Related to this is the question of the process for alteration of the targets. Choices involve whether this requires reference to Parliament, the agreement of Parliament, or debate and discussion before changing the targets.

Revision of targets by the Executive

It is possible for the Executive to revise the climate targets without reference to the Parliament. On several occasions, Australia has already revised its NDC by Executive action, without Parliamentary debate. This was the case, for example, in the most recent revision of Australia’s NDC, communicated to the UNFCCC Secretariat in June 2022, to promise more ambitious emission reduction targets.

Courts have upheld the principle, implicit in the notion of separation of powers, that it is the prerogative of the Executive to enter into treaties. It is considered an act of international relations and therefore an act of ‘the State’. Court decisions have specifically noted that: ‘An act of state is a prerogative act of foreign policy performed by the Crown in the course of its relations with another state’.[323] The performance of treaties is considered an act of State.[324] The implementation of international treaties by the Executive is non-justiciable.[325]

A floor on ambition?

As the target is to be set by the Act, it will not be possible for a future climate Minister to unilaterally amend the target by means of a policy announcement.

As a broad principle of public law operating at the national level, there is no Parliamentary barrier to increased or reduced climate ambition, as the legislature is free to amend legislation at any time, by passage of new laws. The principle of Parliamentary Sovereignty is clear that a Parliament cannot bind its successors.[326]

The picture is complicated by the operation of international climate law. Although the Paris Agreement has a ‘bottom up’ approach that allows national level determination of climate efforts – as opposed to ‘top down' internationally dictated emissions reductions, it also contains a principle of progression over time in relation to national level climate actions. (This is explained above.) This Paris principle of progression is also described as an ‘obligation of non-regression’[327] or a ‘no backsliding’ principle.[328]  

On this basis, it is not possible - insofar as international law is concerned - for Australia to lodge a weaker NDC in the future whilst it remains a Party to the Paris Agreement. The only way to lower the target would be for a future Australian government to take the dramatic step of withdrawing from the Agreement. Such an action was taken by the Trump Administration in November 2019, with effect from November 2020. (The USA has since re-joined as a Party from 20 January 2021, by depositing an instrument of acceptance).[329]

Is the target a ceiling?

Another facet of the debate on the Bill prior to its tabling in the House of Representatives, involved claims by the Leader of the Greens, Dr Adam Bandt MP, that the Bill could place a ‘ceiling’ on national emissions reductions efforts.[330]

The Minister for Climate Change and Energy, Chris Bowen MP responded by stating that the Bill would make it clear ‘that 43% is our minimum commitment – and does not prevent our collective efforts delivering even stronger reductions over the coming decade’.[331]

The Bill does not contain any provision that attempts to limit the scope of the Executive to act in this regard. On the contrary, subclause 10(4) preserves the option explicitly. It states:

Subsection (1) [which sets the target] does not prevent or limit the exercise of the executive power of the Commonwealth to: (a) prepare and communicate a new nationally determined contribution [NDC]…; or (b) adjust Australia’s nationally determined contribution …

The Bill guides the actions of the Executive, but it does not constrain its future actions (partly because of the principle of separation of powers). There is nothing to prevent the Executive from lodging a more ambitious NDC in future.  

Subclause 10(5) states a new NDC that is communicated ‘must represent a progression beyond’ the current NDC, even if that NDC has been previously adjusted. Likewise, subclause 10(6) states that any adjustment of an NDC, that revised NDC ‘must represent an enhancement of Australia’s level of ambition.’ These subclauses effectively incorporate the Paris progression principle into domestic law.

Amendments to insert additional notes to these subsections were also agreed upon in the House of Representatives, to underline the point.  These clarify subclause 10(1), saying ‘nothing in subsection (1) limits Australia’s ability to reduce its net greenhouse gas emissions beyond 43% below 2005 levels by 2030.’[332] 

No provision to amend target by a Regulation

The Bill as read a third time in the House of Representatives does not contain a mechanism for amendment of the legislative target by means of a statutory instrument or regulation. 

This appears to explain early claims that the Bill might ‘place a ceiling on national ambition’ made by Greens MPs. The Bill could be said to potentially represent a ceiling on ambition - in domestic law - in a practical sense, if it meant that a hypothetical future government which intended to increase emissions reduction ambition expressed in the target returned to Parliament and did not receive sufficient support to legislate the new target.

However as indicated above there is nothing to prevent the Executive from lodging a more ambitious NDC, even if amendment of the future Climate Act is blocked.

Key Issue 4 – Sparse Framework or Detailed mechanisms?

Some climate change laws are described as ‘flagship legislation’ which provides leadership for climate change policy in a given country.[333] An academic definition of a national climate law is, ‘a wide-ranging piece of legislation that fundamentally defines a country’s approach to climate change’ [emphasis added].[334] The international literature also refers to legislation with a ‘comprehensive approach’, or ‘legislation that serves as a comprehensive, unifying basis for climate change policy.’[335]

The Bills presented are simpler, as they do not purport to provide over-arching or comprehensive statements of climate policy, other than to set emissions reduction targets for the mid-term and long-term.

Broad outline with details later

From an international comparative perspective, it is not unusual for climate change laws to set out a broad framework, ‘with the explicit aim of reducing GHG emissions in relevant sectors through specific measures at a later stage.’[336]

In media interviews, the Minister for Climate Change and Energy has indicated that subsequent policies and measures will implement the climate targets. Particular measures cited include amendments to the legislation for the ‘Safeguard mechanism’ applying to Australia’s highest-emitting enterprises, electric vehicle (EV) amendments, and the Rewiring the Nation plan involving numerous policy proposals including changes to the approval of expenditure on electricity transmission upgrades and establishment of a Rewiring the Nation Corporation.[337] Those measures are not included in the Bills, as they will involve a combination of policy and reform of other legislation.

A related issue is whether the Bill includes any funding for climate related initiatives. It is self-evident that the Bills do not attempt this, perhaps on the basis that ARENA and CEFC are already funded by other means. The provisions of the CA Bill do not provide a standing allocation in relation to funding of the CCA. By comparison, in the USA, the recently enacted federal climate change law (that is, provisions in the Inflation Reduction Act, discussed above) includes a considerable allocation for climate action.

Criticism of lack of detail

In its submission to the Senate Inquiry, the Environmental Defender’s Office said:

The Bills before the Senate are an important first step and should be supported. However, the Australian Government and Parliament must clarify the next steps that will be taken to ensure that the targets are sufficient, meaningful and will be effectively achieved.[338]

A similar argument was made in a separate submission to the Senate Committee, by Associate Professor Anita Foerster of Monash University who suggested ‘the Climate Change Bill 2022 is best described as light-touch climate legislation’, on the basis that there was scope to 'strengthen the target-setting and accountability provisions'.[339]

Some Senators have expressed concern about the lack of detail in the legislation. Senator Jacqui Lambie described the Bill as ‘a neat package’ but one ‘that ends up hiding all the details’. In an August 2022 interview she said:

In my mind, if the federal government wants to pass a target into law, but it doesn’t want to tell us what it’s doing to get there, then we should worry about their commitment to the target in the first place.[340]

Some media commentators have expressed concern that the legislation is somewhat sparse in terms of mechanisms.  For example, speaking on ABC TV’s Insiders, Waleed Aly stated:

I think this also highlights what this Bill doesn’t have, which is most things. The idea of legislating the target is a really fascinating one. The government concedes it’s not actually a necessary thing to do. Perhaps I’m being too much of a lawyer, but there’s no legal obligation that attaches to the target, there’s no final penalty if the government fails to achieve the target.[341]

A specific criticism of lack of detail was made in relation to the extent of reliance on offsets. The Australia Institute, in a submission to the Senate Committee on the Bills stated:

Currently it is unclear on the extent to which the current 43 per cent emission reduction modelling relies on [Australian Carbon Credit Units] ACCUs and this is a major concern. The reliance on carbon credits should form part of the annual statements given by the Minister and informed by the Climate Change Authority.[342]

Scientific critique of certain targets

The broader scientific literature also takes aim at national targets that are ‘vague’, stating that scope (inclusions, exclusions, definitions), equity/fairness (global and regional) and the road map to the targets (or trajectory) are key issues to be considered when evaluating net zero targets.[343]

An additional point is made by Dr Stephen Smith of the University of Oxford, writing on the ‘case for transparent net-zero targets’, he argues that failure to publish a clear plan detailing the role of carbon dioxide removal techniques such as soil carbon sequestration poses a policy risk to the achievement of net zero targets, and states that ‘any traded offsets used…must have high environmental integrity.’[344]  

In an article entitled ‘The meaning of net zero and how to get it right’, Fankhauser et al (2021) emphasise the need for social and environmental integrity in setting net zero targets, explaining:

This means carbon dioxide removals should be used cautiously and the use of carbon offsets should be regulated effectively.  Governance, accountability and reporting mechanisms are currently inadequate. Long-term ambition is often not backed up by sufficient near-term action. Many entities have not yet set out detailed plans to achieve their pledges and are opaque about the role of carbon offsets in place of cutting their own emissions. The environmental and social integrity of some of these offsets is questionable.[345]

Response: a starting point

The Government’s response is effectively to explain that enactment of the Bills is just a starting point in terms of climate change response. The Minister’s Second Reading speech describes the Bill as ‘simple. Simple, yet powerful’. The speech refers to various government policies including Rewiring the Nation, a non-legislated 82% renewable energy target by 2030, a national electric vehicle strategy, and a national battery strategy.[346] Upon passage of the Bills through the House on 4 August 2022, the Minister for Climate Change and Energy said, ‘Today doesn’t mark the end of the work, today the work just gets started.’[347]

The viewpoint that the Bill is just ‘a starting point’ was repeated by journalist Lenore Taylor, in a television debate: ‘It’s a target, but not the means of getting to the target’... [348] She continued: ‘The most important thing about legislating a target is that it sends a signal to business. Business has been wanting to invest for years, but saying: ‘government policy is all over the shop. We don’t know where it is going to be, so we can’t invest.’ Having a legislated target sends a signal of certainty to business, and I think it will accelerate investment.’ [349]

An example of law reform that is being undertaken in parallel to the climate Bills is work that is already underway regarding the ‘Safeguard Mechanism’. On 18 August 2022, Mr Bowen released a discussion paper on reform of that mechanism (which deals with 215 of Australia’s largest emitters).[350] This is likely to lead to amendments to the legislation associated with that mechanism, the National Greenhouse and Energy Reporting Act 2007, plus the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 and the Carbon Credits (Carbon Farming Initiative) Act 2011.

Key issue 5 – Guiding Principles

An international review article suggests that inherent in the definition of framework climate change legislation is that it ‘lays down general principles and obligations for climate change policymaking’ [emphasis added].[351] However, apart from the objects clause and other aims that might be implied from the Paris Agreement, the present Bills do not present over-arching principles.

By contrast, the Climate Change Authority Act 2011  sets out a series of statutory principles, in section 12. Those principles include that, measures to respond to climate change should be economically efficient, environmentally effective, equitable, and should ‘take account of the impact on households, business, workers and communities’. The CCA is already required to have regard to supporting an effective global response to climate change and consistency with Australia’s foreign policy and trade objectives.

Likewise, the Victorian Climate Change Act 2017 sets out policies and principles. It states: ‘The Government of Victoria will endeavour to ensure that any decision made by the Government and any policy, program or process developed or implemented by the Government appropriately takes account of climate change if it is relevant by having regard to the policy objectives and the guiding principles.’[352] The Act sets out five broad policy objectives, which include reference to adaptation and regional support ‘in the transition to a net zero greenhouse gas economy’.[353] It also sets out ‘guiding principles’ including:

• Principle of informed decision making
• Principle of integrated decision making
• Principle of risk management
• Principle of equity
• Principle of community engagement
• Principle of compatibility [with national and international policies and commitments].[354]

The issues of ‘just transition’ and ‘climate justice’ have been the subject of discussion in various oral and written submissions to the Senate Legislation Committee inquiry on the Bill. The Scottish climate change legislation refers to both these notions in the process of devising climate change plans.[355]

In terms of a principle of ‘energy transition’, Germany has enacted laws for an orderly transition from coal in the Act to Reduce and End Coal-Fired Power Generation 2020 (Gesetz zur Reduzierung und zur Beendigung der Kohleverstromung), informally known as the coal exit law (Kohleausstiegsgesetz), supplemented by an Act on Structural Change in Coal Mining Areas 2020 (Strukturstärkungsgesetz Kohleregionen).[356] 

Key Issue 6—What would an ‘optimum’ climate law look like?

A comparison of national Climate Change Acts in seven different advanced economies is presented by Muinzer in an edited collection (2020). This brings together the analysis of contributing experts. One diagram reproduced below identified the common mechanisms and provisions of ‘optimum’ national climate change legislation (Figure 2). This internationally comparative review of legislation-level climate Change Acts states that carbon budgets, the creation of plans, and national targets are all considered as ‘key features’ of optimal climate change legislation, to be given ‘careful consideration for inclusion’.[357]

The authors state:

The general position that has emerged is that these key devices may not be ignored or overlooked where a state is seriously considering the creation of credible national framework legislation.[358]

The comparative literature suggests that identification of weaknesses and strengths in national framework climate legislation enable laws to be positioned on a continuum or sliding scale. (Such an approach does involve placing to one side differences in national circumstances and legal systems).

For example, in relation to carbon budgets, the authors conclude that Acts that do not contain provisions to require preparation of carbon budgets are considered to be ‘weaker’ than other national climate change Acts.[359]

This literature makes the plea that decisions to select or reject particular mechanisms be justified on rational grounds. Muinzer argues:

In the case of best practice regime design, a burden must be understood to exist: each of the crucial components …should either be incorporated in the national framework legislation in question, or, if rejected, that rejection should be explicitly accounted for in a reasoned argument: none of the components can be legitimately ignored.[360]

Other mechanisms or sectoral responses

It is self-evident that the Bills do not set out to provide for a multitude of issues such as those  related to energy and land use planning, which are broadly connected to the policy response to climate change in terms of both mitigation and adaptation.[361] However, it is clearly not the approach of the present Bills to be comprehensive in relation to such topics. Future policy initiatives or law reform proposals and Federal-State processes may address these. 

Key issue 7 – Accountability mechanisms

A major international review of 43 different climate change laws conducted by the Grantham Institute of the London School of Economics, published in 2021, examined accountability mechanisms in these laws.[362] It identified four key elements of accountability, asking the following questions about those elements:  

• What obligations are created? What are actors required to do?
• Who is accountable to whom? Does the law specify who is responsible for fulfilling obligations and to whom that responsibility is owed?
• How is compliance assessed? Does the law specify the process for determining compliance?
• What happens in the case of non-compliance? Does the law specify what happens? What are the penalties for failing to meet obligations or processes for correction? [363]

The authors suggest that legislators should:

• Introduce provisions enabling post-legislative review by parliaments, addressing compliance with the specific duties established by the legislation, the effectiveness of the legislation, and specifying what action the parliament is expected to take following the review.
• Ensure that post-legislative parliamentary scrutiny is accompanied or informed by other avenues for stakeholder engagement, including public participation.
• Provide greater clarity on sanctions or corrective actions in the event of a failure to comply.
• Create a clear mandate for future regulation of private entities or include specific provisions relating to these entities.
• Consider introducing explicit provisions related to court proceedings and dispute resolution.
• Consider pairing trust-based accountability systems with stronger sanctions-based approaches. [364]

Key issue 8 – Emissions budgets

Another key issue in the main climate Bill is whether it provides adequately for the setting of emissions budgets, which are often considered necessary to lay out a trajectory (relative to business as usual (BAU)) that indicates how a nation plans to reach its climate change targets.

Emissions budgets or ‘carbon budgets’ are specific, quantified amounts of greenhouse gases that can be emitted in future years, whilst still remaining on a pathway consistent with meeting a long-term target. In the UK law, carbon budgets limit the amount of greenhouse gases that can be emitted in a series of five-year periods, whilst moving forwards on a trajectory consistent with meeting the net zero target.

The main Climate Bill contains the phrase ‘an emissions budget’ in clause 10. It provides that the 2030 target be expressed as both a point target and as an emissions budget. Although the term ‘emissions budget’ is found at subparagraph 10(1)(a)(ii), it is not included within the definitions (clause 5). Nor is it elaborated upon in paragraph 10(1)(a).  

There is no mechanism for the making of a regulation or legislative instrument that would declare the carbon budget for that period 2021-2030 which is specified in subparagraph 10(1)(a)(ii).

By contrast, a carbon budgets mechanism is included in the Victorian, UK, Scottish and NZ legislation.

The Bill as presented does not contain detailed provisions for the making of carbon emissions budgets consistent with ensuring that the long-term (2050) target is met.

Emissions budgets provisions in other laws

By contrast, other laws, for example, the NZ, Scottish and UK Acts, all provide for emissions budgets and annual reporting to Parliament on progress towards meeting emissions reduction targets.

The NZ Climate Change Response Act 2002 and UK’s Climate Change Act 2008 provide for 5-year emissions budgets, whereas the Scottish Climate Change (Scotland) Act 2009 provides for 10-year emission budgets.[365] The Scottish Act also provides for annual targets, calculated as an equally apportioned annual percentage reduction over the relevant 10-year period.[366]

The NZ Act requires that there be three emissions budgets in place at any time (one current budget, plus two prospective budgets).[367]

The Acts use slightly different language regarding the obligations of the person setting the emissions budget; for example, the UK Act uses ‘duty’, and the Scottish Act uses ‘must’.

Notably, the NZ and UK Acts allow for, but limit, the banking or borrowing of over or under achievement in relation to an emissions reduction target.

New Zealand

Subpart 2 of Part 1B of the NZ Act requires the responsible Minister to set a series of emissions budgets to enable New Zealand to meet the 2050 target (section 5W). Subsection 5X imposes a duty on the Minister to set an emissions budget for specified periods leading up to 2050. The emissions budget states the total emissions that will be permitted and encompasses all greenhouse gases (including biogenic methane) (section 5Y).

The emissions budgets are to be met by domestic emissions reductions and domestic removals; however, offshore mitigation may be used in limited circumstances (section 5Z).

The NZ Act provides for the banking or borrowing of emissions reductions from the next emissions budget period (section 5ZF); although the amount borrowed must not exceed 1% of the emissions budget for the next emissions budget period.

The NZ Act requires the Minister to prepare an emissions reduction plan for each emissions reduction period, setting out the policies and strategies required to meet the relevant emissions budget (section 5ZG). Progress towards meeting emissions budgets is monitored and reported on by a Climate Change Commission (section 5ZJ and 5ZK).

United Kingdom

The UK Act requires the Secretary of State to set a series of rolling five-yearly carbon budgets leading towards the 2050 target (sections 4-5).

The Secretary must set an amount for the net UK carbon account (the ‘carbon budget’) for each succeeding period of five years described as ‘budgetary periods’ (section 8).

The carbon budgets are made by the Secretary using legislative instruments, given advice from the Climate Change Committee, and national authorities (section 9).

National carbon budgets are required to be set at least 12 years in advance to allow the nation sufficient time to prepare (section 4). The UK Act requires the Secretary to prepare proposals and policies that will enable the carbon budgets to the met. These must be presented to the Parliament.[368] The Act also states that it is the duty of the Secretary ‘to ensure that the net UK carbon account for a budgetary period does not exceed the carbon budget’.[369]

Scotland

The Scottish Act establishes 3 interim targets for 2020, 2030 and 2040.[370] The interim targets may be amended, but not lowered. The Act requires annual targets within each 10-year interim period to be set and met, with the annual target calculated as an equally apportioned percentage reduction over the 10-year period.[371]

The Act requires the Scottish Ministers to prepare a climate change plan, setting out the proposals and policies to be implemented for relevant sectors to meet the emissions reduction target. The Scottish Minister must have regard to ‘just transition principles’ and ‘climate justice principle’.[372]

Key issue 9 – provisions to evaluate progress

Climate Change Acts in other jurisdictions contain provisions that go to the questions of evaluating whether a climate target, and/or a carbon budget has been met. For example:

• the UK Act section 18(7) (carbon budget), section 20(5) on whether 2050 target is met or not
• the NZ Act, section 5ZL ‘Commission to report at end of emissions budget period’
• the Victorian Act, section 55 requires the Minister to table a report setting out the total greenhouse gas emissions during the interim target period, stating ‘whether the interim emissions reduction target … has been achieved’.

Key Issue 10 – Statutory Climate Plans, Policies and Strategies

Comparative studies of climate change framework laws describe the inclusion of provisions for ‘climate plans’ as a key feature found in optimal climate change legislation.[373] As explained by researchers at the University of Oxford in a major global assessment of net zero targets:

If nations, states & regions, cities and companies are serious about reaching their net zero targets it is entirely reasonable to expect them to enact measures that will help them get there; net zero is a land inaccessible to those without a plan. [374]

Several Australian state climate laws provide for the making of statutory plans or policies or sector agreements on climate change. The South Australian Climate Change and Greenhouse Emissions Reduction Act 2007 provides for statutory climate change policies (section 14), and industry sector agreements (section 16). Victoria’s Climate Change Act 2017 provides more detailed provisions for specialised action plans. It provides for plans including a state-wide Climate Change Strategy (covering mitigation and adaptation) Adaptation Action Plans, Whole of Government Emissions Reduction Pledges, and Sector Pledges.

Statutory policies are conceptually distinguishable from carbon budgets. In the UK, once a carbon budget has been set, an obligation arises on Government to prepare policies to ensure the budget is met.[375] The UK Act imposes a continuing duty upon the Secretary of State to prepare policies and proposals that will enable the carbon budgets to be met.[376]

Other types of reports and programs mandated by the UK legislation in order to help with meeting the targets, involve requirements to prepare a Risk Assessment report (covering ‘risks of the current and predicted impact of climate change’) and an Adaptation Programme, that has associated reporting requirements.[377] 

Key Issue 11 – Adaptation

Back in 2008, the Garnaut Review observed that ‘mitigation will come too late to avoid substantial damage from climate change’ and noted that ‘every Australian will have to adapt to climate change within a few decades’. The Review predicted that ‘it is likely that Australians and Australian institutions will be adapting to climate change within a few decades.’[378]

Those at the front line of climate change in Australia, namely the Torres Strait Island communities, and the insurance industry, have emphasised the need for adaptation measures.

Adaptation to climatic disruption is a key goal enshrined in the Paris Agreement (Article 7) and the UNFCCC (Art 3.3, 4.1). Adaptation is defined by the IPCC as ‘the process of adjustment to actual or expected climate and its effects, in order to moderate harm or exploit beneficial opportunities.’[379] The Framework Convention sets out the principle that ‘Parties should take precautionary measures to anticipate, prevent or minimize the causes of climate change and mitigate its adverse effects (Article 3.3).’ It specifies, under ‘Commitments’, that ‘All Parties … shall … Formulate, implement, publish and regularly update national and, where appropriate, regional programmes containing measures to … facilitate adequate adaptation to climate change.’[380]

Article 7(7) of the Paris Agreement sets out obligations to take particular actions on adaptation. At (7)(7)(c) this includes ‘Strengthening scientific knowledge on climate, including research, systematic observation of the climate system and early warning systems, in a manner that informs climate services and supports decision-making.’

The National Climate Resilience and Adaptation Strategy 2021-2025 was published in October 2021, just before the Glasgow COP 26. The Strategy is overseen by the National Adaptation Policy Office.[381] NAPO is co-chair of a whole of government committee known as the Australian Government Disaster and Climate Resilience Reference Group, involving officials from 22 agencies across the Australian Government. Previous national emergency management bodies, particularly the National Recovery and Resilience Agency, which was formed after the Royal Commission into National Natural Disaster Arrangements, are being merged from 1 September 2022 into a new body within the Home Affairs Portfolio called the National Emergency Management, Resilience and Recovery Agency (NEMRRA).[382]

Australia’s June 2022 NDC does contain a section on adaptation. It refers to ‘the development of an urgent climate risk assessment of the implications of climate change for national security’ and mentions $200 million of annual spending on disaster preparation.[383]

However, neither of the Climate Change Bills as introduced to the House of Representatives mention or refer to ‘adaptation’. At a stretch, it might be argued that recognition of adaptation is necessarily implied by the inclusion of numerous references to the Paris Agreement and to Australia’s NDC in the Bills. However, it is not clear that the Bills indicate an intention to incorporate the entire Paris Agreement into national law.

Adaptation provisions in other climate laws

More than a decade ago, Professor Jan McDonald of the University of Tasmania observed that ‘law will be an essential vehicle for implementing adaptation policy’, noting that it can provide the basis for policies ‘aimed at changing behaviours to promote … adaptation actions before damage is suffered and a framework for responding to losses after the event.’[384]

The objects clause of New Zealand’s Climate Change Response Act 2002 sets out an intention to ‘‘provide a framework by which New Zealand … [can] prepare for, and adapt to, the effects of climate change’.[385]

In 2020 and 2021 the Federal Parliament considered but did not pass the Climate Change (National Framework for Adaptation and Mitigation) Bill. That Bill, put forward by Independent MP Zali Steggall, proposed:

• an annual National Climate Risk Assessment to be prepared by a Climate Change Commission
• 5 yearly adaptation plans in response to a National Climate Change Risk Assessment 
• a requirement for the Minister to ‘take all reasonable steps’ to ensure achievement of the objectives of the national adaptation plan
• a requirement for an annual progress report and statement to Parliament on the national adaptation plan.

Climate Change (Consequential Amendments) Bill 2022

The Climate Change (Consequential Amendments) Bill 2022 (CA Bill) would amend 14 existing Commonwealth Acts relating to climate, energy, infrastructure investment, and science research.

The main purpose is to require selected Commonwealth entities (including the Australian Renewable Energy Agency, Clean Energy Finance Corporation, Clean Energy Regulator, Export Finance Investment Corporation, Infrastructure Australia, and the Northern Australia Infrastructure Facility) to consider the emissions reduction targets when exercising their statutory responsibilities.

The Bill does this by proposing new clauses or amending existing sections to include:

• an objective of facilitating achievement of Australia’s greenhouse gas emissions targets into the objects clause of some of the Acts
• a definition of ‘Australia’s greenhouse gas emissions reduction targets’ into 12 of the Acts
• a definition of the Paris Agreement into most of the Acts
• clarification of the constitutional basis of some of the amended Acts.

Amendment of functions or objects of statutory bodies or scheme

The CA Bill proposes to amend the functions or objects of a range of statutory bodies and schemes to require—or clarify that—the body or scheme is to have regard to, or facilitate the achievement of Australia’s greenhouse gas emissions reduction targets.

Commencement

The proposed Consequential Amendments Act will only commence if the Climate Change Bill becomes law. If that precondition is met, then the CA Act will commence on the later of day after it receives Royal Assent and the commencement of the Climate Change Bill.

Acts being amended

The CA Bill proposes to make amendments to 14 Acts. Those Acts and their current purpose are summarised in Table 2.

Table 2      Acts proposed to be amended and their purpose

Structure

The CA Bill has two parts, both contained within Schedule 1.

Part 1 (‘Amendments’), contains the majority of proposed provisions, and sets out proposed amendments to each Act.

Part 2 (‘Transitional’) clarifies the application of the proposed amendments to an existing infrastructure plan provided to the Minister under the Infrastructure Australia Act.

The EM clarifies the intended effect of the amendments of the existing entities and schemes:

These amendments are not intended to limit the exercise of powers or performance of functions of these entities and schemes. Rather, they are intended to enhance the legislation to enable consideration of Australia’s emissions reduction targets and its obligations under the Paris Agreement when exercising powers or performance of functions.[386]

The practical effect of the proposed changes is to:

• ‘facilitate the achievement of Australia’s greenhouse gas emissions reduction targets’ (Item 1 (ARENA), Item 7 (CFI Act/emissions reduction fund), Item 16 (CEFC))
• ‘contribute to [or towards] the achievement of Australia’s greenhouse gas emissions reduction targets’ (Item 4 (building energy efficiency), Item 21 (CER), Item 45 (NGER scheme), Item 49 (NAIF))
• ‘give advice under Part 4 of the Climate Change Act 2022’ and ‘take account of the matters set out in Article 2 of the Paris Agreement’ (Items 28 and 29 (in relation to the CCA))
• have regard to
  • Australia’s obligations under international agreements ‘including the Paris Agreement, and Australia’s greenhouse gas emissions reduction targets’ (Item 34 (EFIC)) or
  • ‘Australia’s greenhouse gas emissions reduction targets’ (Items 42–43 (Infrastructure Australia), Items 51–54 (Minister for Energy, under the OEI Act))
• ‘give effect to certain obligations that Australia has under the Paris Agreement ’ (Item 36 (greenhouse and energy minimum standards scheme, GEMS))
• ‘contribute to giving effect to Australia’s obligations under the Paris Agreement’, (Item 58 (CSIRO)).

Acts not amended

The Consequential Amendments Bill does:

• not make amendments to the:
  • Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), the primary national environmental law providing for the assessment and approval of actions (such as coal and other mining) likely to have a significant impact on matters of national environmental significance[387]
  • Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act), which regulates offshore oil and gas exploration and production as well as subsea GHG storage
  • Industry Research and Development Act 1986 (IR&D Act), which enables the expenditure of Commonwealth funds on ‘industry, innovation, science and research programs’ created by the Industry Minister in conjunction with a statutory Board also known as Industry Innovation and Science Australia. 
• not affect national energy (electricity and gas) laws which are found in State-based legislation applied at State level through a legislative process of cooperative federalism
• not affect the renewable energy target (RET) established under the Renewable Energy (Electricity) Act 2000 (REE Act). The amendments do not amend the magnitude of the target in that Act (section 40). The Government appears at this stage to intend to reach the new 82% renewable energy target without creating additional obligations to buy renewable electricity. Instead, the Bill inserts text into the objects clause of the REE Act. The Explanatory Memorandum states:

The amendments to the REE Act add an additional object ‘to contribute to the achievement of ‘Australia’s greenhouse gas emissions reduction targets’ and adds reference to ‘Australia’s greenhouse gas emissions reduction targets’ and the ‘Paris Agreement ’. No changes are proposed to the operation of the schemes supported by the Act.[388]

The EM foreshadows potential future amendments to the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989.[389] The Government is currently considering implementation of the outstanding components of the Review of the Ozone Protection and Synthetic Greenhouse Gas Program.[390]

During the second reading debate, the Minister indicated that the Government would, over the next 12 months, undertake a review of laws —including the OPGGS Act and the Industry Research and Development Act 1986 (IR&D Act)—to consider whether similar amendments should be made.[391]

The IR&D Act was the subject of submissions to the Senate Inquiry on the Climate Bills by the Australia Institute, which argued that it should be also amended by the CA Bill.[392] This was on the grounds that legislative instruments made under the IR&D Act have been used to create programs to support fossil fuel projects, including the Port Kembla Gas Generator[393] and the Underwriting New Generation Investments Program ('UNGI').[394]

Addition of definitions

The Consequential Amendments Bill proposes to insert common definitions of ‘Australia’s greenhouse gas emissions reduction targets’ and the ‘Paris Agreement ’ into many of the Acts.[395] These definitions mirror definitions in clause 5 of the main Bill.

Clarification of constitutional basis

Several proposed amendments in the CA Bill (Items 3, 18, 38) would insert provisions into selected Acts (for ARENA and the CEFC, and the GEMS scheme) to clarify the legislative heads of power that are relied upon, principally by including reference to the external affairs power (section 51(xxix) of the Constitution).

Item 3 updates the constitutional basis for the ARENA Act at section 14 of that Act, to make the external affairs power the primary head of power for the Act. It also clarifies that section in relation to grants to corporations, by using a defined term, ‘constitutional corporation’ with reference to section 51(xx) of the Constitution, in conjunction with Item 2 which inserts a definition of ‘constitutional corporation’ into the ARENA Act.

Item 18 proposes to update the existing provision in the CEFC Act relating to the constitutional basis for that Act, by making the external affairs power the primary head of power, and adds a reference to giving effect to the Paris Agreement.

Items 35 and 38 propose similar amendments to the GEMS Act, the national legislation for the energy labelling of appliances, and regulation of energy efficiency of products.

Key provisions

Rather than describing the amendment of each of the 14 Acts, the Digest gives an account of selected examples.

Amendment of the CEFC Act

This section describes proposed amendment of the Clean Energy Finance Corporation Act 2012 (CEFC Act).

Briefly, the CEFC is a Commonwealth statutory corporation that has the objective of facilitating ‘increased flows of finance into the clean energy sector’ (section 3). In practice, it provides finance to renewable energy projects, to leverage the contribution of the private sector finance providers.

Item 16 proposes to amend the objects of the Act to add an additional object of facilitating the achievement of Australia’s emission reduction targets.

Item 17 would provide a definition of the term ‘Australia’s greenhouse gas emissions reduction targets’.

Item 18 inserts a new section in the Act to replace the existing section10 of the Act regarding ‘Constitutional limits’. The replacement section states that the external affairs power is the primary head of legislative power relied upon. Within the text relating to that power, the Bill inserts reference to the Paris Agreement.

The CA Bill does not propose to alter the provisions relating to the Investment Mandate of the CEFC. Under those existing provisions, the Minister can make directions to the CEFC board as to the performance of the CEFC’s investment function (section 66). The issue of Ministerial directions to the CEFC was controversial during the 46th Parliament.[396]

Climate Change Authority Act amendments

Items 23-32 propose amendments to the Climate Change Authority Act 2011 (CCA Act).

Some amendments will insert definitions, including of the Paris Agreement and ‘Australia’s greenhouse gas emissions reduction targets’, and remove redundant references to the repealed Clean Energy Act 2011 (Items 24, 25, 26).

Other amendments are intended to remove redundant references to the repealed Clean Energy Act 2011 (CE Act) (Items 25, 27, 30, 32). Some of the provisions will clarify that the CCA is to give advice under the main Bill rather than under the former CE Act. 

Section 12 of the CCA Act sets out principles that the CCA must have regard to when performing its functions. Item 29 proposes to insert a new subparagraph (viii) into paragraph 12(a) of the CCA Act to require the CCA to take account of the matters set out in Article 2 of the Paris Agreement. 

This amendment will require the CCA to consider the broader question of the temperature goals of the Paris Agreement. The EM indicates that reference to the temperature goals ‘helps emphasise the importance of the climate science in advising on relevant targets.’[397]

It also requires the CCA to give consideration to adaptation and to food production, as those matters are included within Article 2 of the Paris Agreement.

During debate in the House, two amendments proposed by Dr Haines MP were agreed to. The first of these added an additional principle that the CCA must consider when performing its functions, that is the principle that any measures to respond to climate change should  ‘boost economic, employment and social benefits, including for rural and regional Australia’.[398]

Dr Haines' second amendment impacts sections 18 and 22 of the CCA Act, which provide for the appointment of CCA members and associate members, respectively. In addition to the current list of fields in which a person may have substantial knowledge or experience, or significant standing, will now be added ‘rural and regional development’ and ‘community energy’.[399] 

Item 31 will amend the CCA Act in order to limit the risk of future Ministerial directions to the CCA being inconsistent with the national emission reduction targets. Specifically, it proposes to insert text stating that Ministerial directions ‘must not be inconsistent with’ the targets. The EM states that the intention is that ‘this furthers the independence of the Climate Change Authority and ensures Ministerial directions cannot be used to undermine the achievement of Australia’s greenhouse gas emissions reduction targets.’[400]

Committee submissions of scientists

Scientists argued for a strengthened, independent, statutory Climate Change Authority with adequate and improved funding and access to Government data, modelling and officials commensurate with increased duties and responsibilities.[401]

The German Climate Change Act 2019 now contains a provision enabling the German equivalent of the CCA, to have access to climate change data held by government:

All public bodies …. shall enable the Council of Experts on Climate Change to peruse the data required for the performance of its tasks and shall make such data available.

The Federal Government shall ensure that the protection of third parties’ industrial and commercial secrets and of personal data is guaranteed.

The Council of Experts on Climate Change may hear and question public authorities as well as experts, particularly representatives of business organisations and environmental associations, on matters relating to climate action.[402]

Some submissions to the Senate Committee Inquiry into the Bill supported the notion of independent reports by the CCA to Parliament on the targets.[403] This can be compared to the proposed approach of the Bill of reports by the Minister with the input of the CCA. Professor Sackett suggested:

I support the Authority being tasked with advising the Government on the adequacy of current GHG emission targets and progress toward those 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.[404]

Some submissions to the Senate Inquiry raised the question of qualifications for membership of the CCA. The submission from Professor David Karoly states ‘From 2012 to 2017 I was a Member of the Climate Change Authority, the only climate scientist to ever be appointed as a Member.’[405]

It continues ‘I believe that I am the only former Member or current Member of the Climate Change Authority with specific expertise in climate change science and with research publications on the global emissions reductions needed to meet specific global warming targets. This expertise is essential for at least one Member of the Climate Change Authority.’ [406] His submission raised the issue of the CCA’s independence, stating: ‘When new Members and a new Chair were appointed …in October 2015, it no longer provided independent advice on Australia’s emission reduction targets in the period 2016 to the present and accepted the government’s emissions reduction targets.’[407]

Export Finance Act amendments

Items 33 and 34 propose amendments to the Export Finance and Insurance Corporation Act 1991 (EFIC Act). Item 34 would amend section 8 of the EFIC Act, which sets out the primary duties of EFIC. The Export Finance and Insurance Corporation (trading as Export Finance Australia) is already required to have regard to Australia’s obligations under international agreements when  performing its functions. The amendment will add a specific reference to consideration of the Paris Agreement.

A requirement to take matters into consideration does not amount to a dictation to give those matters greater weight when making decisions than other statutory considerations.

Note that decisions of the EFIC (or EFA) do not by themselves trigger the environmental impact assessment under national environmental law, the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). Section 524 of the EPBC Act already provides that a decision by the Commonwealth or a Commonwealth agency to grant a governmental authorisation under the EFIC Act is not an ‘action’ that might otherwise have required environmental impact assessment under the EPBC Act.

A submission to the Senate Committee Inquiry to the Bills by the Australia Institute suggested amendments to the CA Bill to limit the powers and functions of those entities, to more effectively prevent them from facilitating investment in fossil fuel projects. The Institute argued: “The Consequential Amendments Bill does not go far enough to align the investment remits of these agencies with emissions reduction goals of the Australian Government and the Paris Agreement .’ The Institute also suggested further amendments to the Industry Research and Development Act 1986 in relation to the CSIRO, to achieve similar goals.[408]

Conclusion

The Climate Change Bill proposes to codify Australia’s climate change targets. It is similar in approach to national climate change laws enacted in the UK, Ireland, France, Denmark, Germany, and New Zealand.

It represents a chance for the Commonwealth to declare leadership on climate change. Four of Australia’s States and Territories have already enacted climate change targets laws (as long ago as 2007 in the case of South Australia).

The Bill is a form of climate change response legislation that sets declaratory targets for national ambition in responding to the threat of climatic disruption. It attempts to influence society and investors by sending a signal of intent, by marking a direction of travel for future policy.

The Bill attempts to create economic certainty by setting a clear overall long-term and mid-term objective for climate change emissions reduction. These targets are principally aimed at mitigation (i.e. reduction) of emissions, rather setting out measures for adaptation to climatic change and extreme weather events.

Compared to similar ‘framework laws’ for climate change already enacted overseas, and also at the State and Territory level, the Bill is very brief.  On that basis, there is some logical basis for press commentary that the Bill is ‘largely symbolic’.[409] Although the Bill sets broad targets, it contains few provisions or concrete mechanisms that might assist Australia to meet the targets. 

By comparison with international examples, it appears to lack a comprehensive approach in terms of implementation measures such as carbon budgets.

The Bill does not propose emissions trading or carbon taxation. It has no immediate implications for private sector businesses and would not impose reporting or compliance obligations.

Whilst the Minister’s Second Reading Speech to the main Bill mentions an 82% renewable energy target, that target is not included in this Bill.[410] Neither the main Bill nor the CA Bill will amend existing law for Australia’s renewable energy target.[411]

While many stakeholders are broadly supportive of the passage of climate change targets, the Bill as presented only provides a high-level framework for the future direction of Australia’s national response to climate change. Amendments were moved to represent the interests of rural and regional Australia, but at the time of writing there had been no amendments relating to Indigenous Australians and climate change.

Some stakeholders have raised concerns about whether the targets are set with adequate reference to experts or expert bodies on climate science. In a similar vein, concerns have been expressed as to whether the targets presented in the Bill are consistent with Australia undertaking its ‘fair share’ of climate change mitigation effort.

The targets for emissions reduction by 2030 and net zero by 2050 aim to partially implement Australia’s obligations under international climate change agreements into domestic law. In particular, the main Bill aims to apply the Paris Agreement’s progression principle. By setting a long-term target in law, the proposal is for Australia to move the response to climate change beyond the reach of short-term preoccupations. 

Appendix One: State and Territory climate targets[412]

Appendix Two – Comparison of NDCs in G20 nations

The table below provides links to each G20 member’s most recent NDC, available from the UNFCCC registry of NDCs.

The World Resources Institute provides comparison tools, including:

•   Comparing all targets (this lists the % share of global emissions)
•   NDC comparisons
•   The Climate Action Tracker (CAT) website also has an interactive infographic where national climate targets can be viewed by clicking on the desired country. CAT also undertakes analyses of the adequacy of emissions reduction policies and most G20 members are analysed.

Notes: ^athe Argentinian NDC does not appear to be available on the registry in an English translation.

Appendix Three: Climate Change Glossary

Except where otherwise indicated, text on this page is attributed IPCC, 2018: Annex I: Glossary [Matthews, J.B.R. (ed.)]. In: Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels. [423]

Adaptation: In human systems, the process of adjustment to actual or expected climate and its effects, in order to moderate harm or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate and its effects; human intervention may facilitate adjustment to expected climate and its effects.

Additionality: An additionality test assesses whether a project or activity creates ‘additional’ emissions reductions that would not have occurred in the absence of the incentive. The baseline for the project assesses how much emissions have been reduced. Additionality is important to ensure that a scheme does not pay for emissions reductions that would have occurred anyway.[424]

Anthropogenic: Resulting from or produced by human activities.

Anthropogenic emissions: Emissions of greenhouse gases (GHGs), precursors of GHGs and aerosols caused by human activities. These activities include the burning of fossil fuels, deforestation, land use and land-use changes (LULUC), livestock production, fertilisation, waste management and industrial processes.

Anthropogenic removals: the withdrawal of GHGs from the atmosphere as a result of deliberate human activities. These include enhancing biological sinks of CO₂ and using chemical engineering to achieve long-term removal and storage. Carbon capture and storage (CCS) from industrial and energy-related sources, which alone does not remove CO₂ in the atmosphere, can reduce atmospheric CO₂ if it is combined with bioenergy production (BECCS).

Baseline scenario: In much of the literature the term is also synonymous with the term business-as-usual (BAU) scenario, scenarios that are based on the assumption that no mitigation policies or measures will be implemented beyond those that are already in force and/or are legislated or planned to be adopted. Baseline scenarios are not intended to be predictions of the future, but rather counterfactual constructions that can serve to highlight the level of emissions that would occur without further policy effort. Typically, baseline scenarios are then compared to mitigation scenarios that are constructed to meet different goals for greenhouse gas (GHG) emissions, atmospheric concentrations or temperature change. The term baseline scenario is often used interchangeably with reference scenario and no policy scenario.

Carbon budget: This term refers to three concepts in the literature:

1. (1) an assessment of carbon cycle sources and sinks on a global level, through the synthesis of evidence for fossil fuel and cement emissions, land-use change emissions, ocean and land  sinks, and the resulting atmospheric  growth rate. This is referred to as the global carbon budget;
2. (2) the estimated cumulative amount of global carbon dioxide emissions that is estimated to limit global surface temperature to a given level above a reference period, taking into account global surface temperature contributions of other GHGs and climate forcers;
3. (3) the distribution of the carbon budget defined under (2) to the regional, national, or sub-national level based on considerations of equity, costs or efficiency.

Carbon intensity: The amount of emissions of carbon dioxide (CO₂) released per unit of another variable such as gross domestic product (GDP), output energy use or transport.

Climate target: a temperature limit, concentration level, or emissions reduction goal used towards the aim of avoiding dangerous anthropogenic interference with the climate system. For example, national climate targets may aim to reduce greenhouse gas emissions by a certain amount over a given time horizon, for example those under the Kyoto Protocol.

CO₂ equivalent (CO_2-eq) emission: The amount of carbon dioxide (CO₂) emission that would cause the same integrated radiative forcing or temperature change, over a given time horizon, as an emitted amount of a greenhouse gas (GHG) or a mixture of GHGs. There are a number of ways to compute such equivalent emissions and choose appropriate time horizons. Most typically, the CO₂-equivalent emission is obtained by multiplying the emission of a GHG by its global warming potential (GWP) for a 100-year time horizon. For a mix of GHGs it is obtained by summing the CO₂‑equivalent emissions of each gas. CO₂-equivalent emission is a common scale for comparing emissions of different GHGs but does not imply equivalence of the corresponding climate change responses. There is generally no connection between CO₂-equivalent emissions and resulting CO₂‑equivalent concentrations.

Mitigation: A human intervention to reduce emissions or enhance the sinks of greenhouse gases.

Scope 1 emissions: all direct greenhouse gas emissions to the atmosphere from sources that are owned or controlled by the reporting entity. ‘Examples are:

• emissions from manufacturing processes, such as manufacture of cement
• emissions from the burning of diesel fuel in trucks
• fugitive emissions, such as methane emissions from coal mines [emissions including venting, flaring, leakage], or
• production of electricity by burning coal.’[425]

Scope 2 emissions: indirect emissions from purchased electricity generation, heat or steam. These emissions occur at a site owned or controlled by another entity.   

Scope 3 emissions: all other indirect emissions – including use of sold products (such as coal or gas consumed elsewhere, for example, overseas), emissions associated with transportation and distribution of products in vehicles not controlled by the reporting entity, outsourced activities, waste disposal. 

Sink: (carbon sink) A reservoir (natural or human, in soil, ocean, and plants) where a greenhouse gas, an aerosol or a precursor of a greenhouse gas is stored. Note that UNFCCC Article 1.8 refers to a sink as any process, activity or mechanism which removes a greenhouse gas, an aerosol or a precursor of a greenhouse gas from the atmosphere.