The new Climate Change Bill offers a fresh approach – but will it be taken?

The Climate Change (National Framework for Adaptation and Mitigation) Bill 2020 was introduced into Federal Parliament by independent MP, Zali Steggall on 9 November. The Bill prescribes a clear goal of achieving net-zero emissions in Australia by 2050, but apart from that specific target, does not seek to prescribe how the goal is achieved. Rather the Bill envisages the development of four key elements to both achieve the goal as well as adopt to the impacts of climate change. The four key elements are:

• the setting of emission budgets – there will be a budget for periods of five years each, with the first starting on 1 January 2022;
• the preparation and implementation of emission reduction plans for each budget period;
• the completion of a national climate change risk assessment, which is to be reviewed and updated at five yearly intervals; and
• the preparation of a national adaptation plan in response to each risk assessment.

A new Climate Change Commission would provide independent advice and carry out reviews, with the members of the Commission to be appointed by a new bipartisan joint parliamentary committee on climate adaptation and mitigation. All decisions, including by the Commission and responsible Minister, are to be informed by specific guiding principles which are intended to ensure fairness, justice, scientific integrity, community engagement and domestic and international co-operation.

Net-zero target

The net-zero target is hard wired into the Bill with a target date of 31 December 2050. Although the Minister may change the target date, the date can only be earlier, not later. The Minister must seek the advice of the Commission which may make recommendations not only in relation to the timeframe for achieving the target but also how the target is to be met.

A change in the target can only be recommended or made by the Minister if there has been a significant change in specified factors with respect to climate change, where those factors include global action, academic peer reviewed research, technological developments and Australia's obligations under relevant international agreements.

Recognising the role of scope three emissions in Australia's export markets, the Commission is also to report to the Minister on the effect of Australia's fossil fuel export emissions in meeting the objects of the Act.

Setting emissions budgets

The Minister must set an emission budget for each five year period commencing from 1 January 2022 with two consecutive emissions budgets to be in place at any one time. In setting the budgets, the Minister must obtain advice from the Commission, and consider and prepare a response to that advice which is to be tabled in Parliament.

In setting budgets, the Minister is expressly prohibited from taking into account any "carry over credits" such as those said to have been earned under the Kyoto Protocol. The current Federal Government has signalled an intention to use such "carry over credits" to meet its current 2030 target under the Paris Agreement of 26-28% below 2005 levels.

The areas on which the Commission is able to provide advice to the Minister when setting emissions budgets are quite broad, including pricing and policy methods to meet the emissions budget and net-zero target.

The Commission is to report within one year after the end of each emissions budget period evaluating progress, and how well the emissions reduction plan (see below) has contributed to that progress.

Emissions reduction plans

The key tool to achieving the net-zero target and the five yearly emissions budgets is the emission reduction plan. The Minister is required to prepare an emissions reduction plan setting out the policies and strategies for meeting each emissions budget. The plan must include:

• sector specific policies;
• multi-sector strategies;
• a strategy to mitigate the impacts that reducing emissions and increasing removals of GHG will have on employers, employees and communities; and
• policies and proposals for the deployment and development of low emissions technologies.

No later than two years before the beginning of an emissions budget period, the Commission is to provide advice to the Minister on the direction of the policy required in the emissions reduction plan for that budget period. The first advice is required to be given no later than 1 February 2021 for the budget period beginning 1 January 2022.

The adaptation framework

Mitigating and reducing emissions is only one part of the Bill. The Bill also establishes a framework for the adaptation that will need to occur to cope with the inevitable effects of climate change on our economy and society. In this respect, the Commission has another central role in preparing a national climate change risk assessment, which is to be updated every five years.

The function of the risk assessment is to:

• assess the risks to Australia's economy, workers, society, agriculture, environment and biodiversity from the current and future effects of climate change based on multiple global emissions pathways scenarios;
• identify the most significant risks based on the nature, severity, probability and cost of the risks; and
• assess the need for co-ordinated responses to those risks over each five year period.

In preparing the risk assessment, the Commission is to take into account a number of matters, including the best available peer research including those from the Bureau of Meteorology and CSIRO, as well as economic, financial and fiscal advice from financial regulators including APRA, ASIC and the RBA, each of which has been very vocal in the last two years regarding the significant risk to the international financial system posed by climate change.

The onus will then turn to the Minister, who must prepare a national adaptation plan in response to each risk assessment published by the Commission. Like the emission reduction plans, each national adaptation plan must set out the strategies, policies and proposals to protect against and mitigate the risks identified, and the timeframes for implementation.

Importantly, the plan must also identify the measures and indictors to enable regular monitoring and reporting on implementation, and how the strategies, policies and proposals are to be funded. Once implemented, the Commission has as one of its functions responsibility to provide annual progress reports that evaluate the implementation of the national adaptation plan, including barriers to implementation. The Minister is obliged to prepare a statement in response to each progress report published by the Commission, which statement is to be tabled in Parliament.

A fresh approach to mitigating climate change risk

The Bill represents a fresh approach to addressing the increasing risks posed by climate change in Australia. Rather than prescribing specific policy tools to achieve a specified emissions reduction target (like the repealed Clean Energy Act), or an adaptation strategy, the Bill creates a framework by which those policies can be developed, and changed if necessary, to meet the specific circumstances and informed by the best available advice. The establishment of the Commission, while performing a similar role to the Climate Change Authority which it will replace, is a further attempt to de-politicise debate around climate change. That members of the Commission will be appointed by bipartisan joint parliamentary committee is a major improvement.

The net-zero target proposed by the Bill is agreed by all major political parties and industry groups, as well as consistent with the goal of the Paris Agreement. The key issue is one of timing – in this respect, the target date of 2050 reflects current Labor policy and most major industry groups. In contrast, the current Federal government has only committed to achieving that target by the second half of this century.

While it would be easy to simply look at the numbers on the floor of the House of Representatives and conclude that the Bill is doomed to defeat, the pressure both domestically and internationally for Australia to increase its ambition and commitment to addressing climate change is unlikely to change. On the contrary, it is only likely to increase as governments, markets, businesses and societies demand more and effective action. The Bill presents a possible pathway for achieving this within the current political environment.