Legislating to end climate and energy chaos

26 July 2022

The Albanese Government will introduce the Climate Change Bill 2022 into Parliament on Wednesday 27th July, to enshrine the nation’s commitment to reduce greenhouse gas emissions by 43 per cent below 2005 levels by 2030, and net zero by 2050, into law. 

Legislating targets provides the strongest possible signal to industry and investors of Australia’s collective commitment to decarbonising our economy and becoming a renewable energy superpower. 

It also helps restore Australia’s international reputation, positioning Australia to capitalise on the opportunities arising from global climate action.

The legislation has four key elements:

  • Enshrines in law our Nationally Determined Contribution of 43% emissions reduction by 2030 and net zero emissions by 2050;
  • Tasks the independent Climate Change Authority to provide advice on Australia’s progress against these targets, and to advise on new targets under the Paris Agreement which will include a 2035 target;
  • Requires the Minister for Climate Change to report annually to Parliament on progress in meeting our targets; and
  • Embeds the nation’s targets in the objectives and functions of a range of key government agencies including ARENA, CEFC, Infrastructure Australia and the NAIF.

Climate Change and Energy Minister Chris Bowen said the Australian Government was making good on its promise to the Australian people.

“We went to the election promising to reduce emissions by 43 per cent by 2030, we were given a mandate and now we are delivering,” he said.

“This Bill confirms our commitment to ambitious but realistic targets supported by Australia’s states and territories, business, industry, unions, environmental and community groups – and provides a platform for collaboration to drive down emissions while ensuring reliable energy supplies.

“The Bill makes it clear that 43% is our minimum commitment – and does not prevent our collective efforts delivering even stronger reductions over the coming decade. 

“The current issues confronting Australian and global energy markets highlights why this long-term commitment is so important.

“The Albanese Government is giving the Parliament the opportunity to end the climate wars. We encourage members of Parliament to support this Bill and signal our shared national commitment to responsible climate action." 

KEY ELEMENTS OF THE LEGISLATION

The Climate Change Bill 2022 is focused on the targets, the annual statement to Parliament and advice from the Climate Change Authority on future targets. The Climate Change (Consequential Amendments) Bill 2022 embeds those targets and the Paris Agreement into other Commonwealth legislation. 

The Climate Change Bill 2022 sets out our targets to reduce Australia’s greenhouse gas emissions by 43 per cent on 2005 by 2030, and to net zero by 2050, as reflected in Australia’s commitments submitted on 16 June 2022. The targets are to be interpreted consistently with both the Paris Agreement and Australia’s formal Nationally Determined Contribution. Achieving these targets is about taking action to reduce emissions to at least the target level, or more where we can.

The Bill will reflect Australia’s obligations under the Paris Agreement, committed to by the previous Government:

  • The global goals in Article 2 of the Paris Agreement of holding the increase in global temperature to well below 2C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5C above pre-industrial levels will be reflected in the objects of the Bill;
  • Any future Nationally Determined Contributions under Art 4 of the Paris Agreement must only be submitted by the government consistent with the requirements in the agreement for them to be a progression beyond Australia’s current commitments.

The annual climate change statement will deliver accountability for delivering the targets, covering

  • the progress made during the year towards achieving the targets; 
  • international developments during the year that are relevant to addressing climate change; 
  • climate change policy; and
  • the effectiveness of the Commonwealth’s climate change policies in contributing to the achievement of the targets.

The Climate Change Authority must provide public advice on these statements, taking into account a range of principles in its establishment legislation, which will include the purposes in Article 2 of the Paris Agreement. The Minister must table a response to any material issues of disagreement with this advice. 

The Climate Change Authority will be obliged to provide advice on future targets at least once each five years, to align with processes under the Paris Agreement. They can also be asked to advise on adjusting targets. The advice will be public and the Minister must take into account and respond to this independent advice. If the Minister disagrees with the advice, reasons must be tabled. 

The operation of the Bill would also be subject to an independent review mechanism at regular intervals. With the first review within 5 years and subsequent reviews 10 years after that.

The Climate Change (Consequential Amendments) Bill 2022 inserts the targets in the objectives and functions of a range of Commonwealth agencies and schemes. This includes:

  • Amending the objects of the legislation establishing the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA) help focus those agencies on contributing to those targets;
  • Requiring the targets to be taken into account by Export Finance Australia and Infrastructure Australia for a number of their functions;
  • Recognising CSIRO’s contribution to all elements of the Paris Agreement in its legislated functions;
  • Including the targets in relevant functions of the Northern Australia Infrastructure Facility (NAIF);
  • updating climate change laws to reference both the targets and Paris Agreement, so that policies such as carbon crediting and the safeguard mechanism help deliver on those targets;
  • updates the Climate Change Authority legislation to reference the purposes of the Paris Agreement in the principles it considers when providing advice.