By Head of Policy and Law Reform Rachel Walmsley and Scientific Director Megan Kessler
With less than one month to go until the Conference of the Parties of the UN Climate Change Convention meeting in Glasgow (COP 26), EDO looks at what the Australian Government can do in the next few weeks to ensure we are committing to meaningful action on climate change.
This legal update identifies five opportunities for Australian climate policy commitments: act now to reduce impacts and costs; provide certainty for businesses and the community; define leadership and responsibility; incentivise innovation in our energy transition; and plan for and measure success.
Opportunity 1: Act now
The climate science could not be clearer. The IPCC AR6 Report confirms it is unequivocal that human influence has heated the atmosphere, ocean and land; and that this unprecedented human-induced climate change is already affecting many weather and climate extremes in every region across the globe. IPCC AR6 confirms that every tonne of carbon dioxide (CO₂) emissions adds to global warming, and concludes that limiting human-induced global warming to a specific level requires limiting cumulative CO2 emissions and reaching at least net zero emissions, including driving strong reductions in other greenhouse gas emissions.
This means there is now intense and increased focus on the commitments made by nations to achieving net zero greenhouse gas (GHG) emissions, phasing out fossil fuels projects and financing, and setting interim emissions reduction targets between now and net zero, with the first phase focusing on 2030 reductions. In the words of COP 26 President Alok Sharma: “Countries are being asked to come forward with ambitious 2030 emissions reductions targets (NDCs) that align with reaching net zero by the middle of the century. To deliver on these stretching targets, countries will need to accelerate the phaseout of coal, encourage investment in renewables, curtail deforestation and speed up the switch to electric vehicles.” [1]
COP 26 provides a significant and timely opportunity for Australia to step up and commit to doing what needs to be done. In the coming weeks, the Australian Government must commit to setting enforceable emissions reduction targets that are enshrined in legislation. The targets must be consistent with the goals of the Paris Agreement of limiting global temperature increase to well below 2 degrees Celsius (°C) above pre-industrial levels, while pursuing efforts to limit the increase to 1.5°C
IPCC AR6 has confirmed that to avoid the worst impacts and costs of climate change, we need to limit the temperature increase to 1.5°C. This can only be achieved if we act now.
Opportunity 2: Provide clarity and certainty for business and community by charting a path to net zero
The scientific, social, economic, human rights and environmental imperatives are clear, particularly for Aboriginal and Torres Strait Islander peoples and our neighbours in the Pacific region. To avoid momentous costs and impacts, Australia needs enforceable legal targets and policy settings that reduce GHG emissions consistent with a net zero target in line with a carbon budget that will limit warming to 1.5°C.
A recent federal parliament inquiry reported that legislating a target would: [2]
- provide long-term policy certainty and reduce legal and regulatory risks;
- improve investor confidence and certainty for business;
- be consistent with the work of the IPCC and broad international scientific consensus;
- align with the same commitment made by many of Australia’s international trading partners such as New Zealand, the United Kingdom, Japan and South Korea;
- align with the same commitment made by many international and domestic corporations; and
- improve human health.
Providing certainty starts with establishing clear legally enforceable targets based on the science, and then providing the tools and rules for how the targets will be met.
The Australian Government must immediately commit to achieving net zero in line with a carbon budget that is consistent with the goal of limiting global temperature rise to 1.5°C, and to setting interim targets and goals that specify the rate at which emissions must decline. A clear and ambitious 2030 target is necessary to ensure a net-zero target aligned with the Paris Agreement temperature goals is achievable.
The Australian Government Must immediately commit to achieving net zero in line with a carbon budget that is consistent with the goal of limiting global temperature rise to 1.5°C
Opportunity 3: Define leadership and responsibility for meeting targets
To ensure that emissions reduction targets and temperature goals are met, clear duties of decision-makers to ensure decisions are made that are consistent with those targets and goals, must be articulated in legislation.
The courts are recognising these duties exist, for example, in Sharma v Minister for the Environment (Sharma), the Federal Court held that the Commonwealth Environment Minister owed all Australian children a duty of care when she decided whether to approve or refuse an extension to an existing coal mine under Australia’s Commonwealth environmental law (EPBC Act). At the state level, in a case brought by Bushfire Survivors for Climate Action, the Land and Environment Court of NSW held the NSW EPA has a duty to develop policies, objectives and guidelines to regulate greenhouse gas emissions and protect NSW communities from the impacts of climate change. Rather than relying on brave clients to bring public interest cases to have these duties confirmed by the courts, it would be better for all stakeholders to have these specific duties clearly set out in legislation. [3]
Opportunity 4: Incentivise innovation in our energy transition
There are significant costs that could be saved by stronger action now. The Climate Council estimates that by 2038, extreme weather events, alongside the impacts of a higher sea level, could cost the Australian economy $100 billion every year. [4] The Reserve Bank of Australia, the Australian Securities and Investment Commission and the Australian Prudential Regulation Authority have cited risks posed by climate change as a central concern for the economy and financial stability. Decisive action now could help ameliorate these financial impacts.
Creating investor certainty through reinvigorating a national renewable energy target (RET); incentivising renewables (for example, by restoring feed in tariffs and providing subsidies for storage capacity as developments in storage technology will help transform the energy landscape); removing barriers and providing a clear pathway for ecologically sustainable renewable energy projects; extending the roles of the Clean Energy Finance Corporation (CEFC) and the Australian Renewable Energy Agency (ARENA) to support development of renewables (not fossil fuel-based energy sources); and strengthening and incentivising energy efficiency solutions are all commitments that the Australian Government can make now. There are also significant opportunities in transport reform, including for electric vehicles.
Policy drivers must leave no sector or community behind – involving genuine transition planning for affected coal communities; incentivising carbon-biodiversity co-benefit schemes such as stewardship payments for rural landowners to manage land for carbon and biodiversity; and empowering First Nations communities to manage Country.
Limiting global temperature increase to 1.5°C is critical, including for the survival and sovereignty of Aboriginal and Torres Strait Island communities and Pacific States who are already suffering climate harm at the current rate of 1.1 warming. Australia’s policy commitments must ensure Aboriginal and Torres Strait Islander peoples and our neighbours in the Pacific region are included in energy transition policies.
The transition can also be galvanised by removing fossil fuel subsidies and perverse incentives (ie, funding of fossil fuels). There are tools and rules that need strengthening – including for example, clear requirements about genuine carbon offsets, establishing nationally harmonised, binding limits on (or pricing of) fugitive emissions from current coal and gas extraction projects (recognising that future fossil fuel extraction is not consistent with meeting Paris Agreement targets), and establishing effective and best practice national emissions and efficiency standards (for example, for electricity, building, agriculture and transport sectors). These changes should also occur within a climate justice framework, ensuring that the most affected communities (from both an economic and climate change perspective) are themselves invested in energy transition through equitable and genuine transition investments in these communities. A commitment to achieving our targets and staying within a carbon budget that will limit warming to 1.5°C requires commitment to establishing clear policy drivers, incentives and legal mechanisms which are just and equitable.
Opportunity 5: Plan for and measure success
We need mechanisms to assess and track progress to ensure that standards, emissions budgets and targets are met. This involves monitoring and reporting, frameworks for risk assessment and adaptive planning, and ensuring expert advice guides continual improvement. We already have the first steps in this framework. The Australian Government should commit to expanding the Emissions and Energy Reporting System under the National Greenhouse and Energy Reporting Act 2007 (NGER Act) to provide a more comprehensive picture of Australia’s GHG emissions and establishing mechanisms by which emissions are tracked from the first stages of project development (for example, by requiring Climate Impact Statements for new proposals) through to disclosure and mandatory reporting of climate risk; reporting on scope three emissions (i.e. the emissions burnt by the wholesale consumer of fossil fuels); impacts on human rights; and State of the Climate Reporting across jurisdictions and sectors.
The Australian Government also has international obligations to ensure that it does not cause transboundary harm to its neighbours, particularly the States most vulnerable to climate change in the Pacific. Environmental assessments, such as Climate Impact Statements, must include assessment of the impact of scope three emissions on these Pacific States, and more comprehensive climate reporting is needed to track progress towards achieving goals, targets and benefits for the region.
There is no more time to lose, but so many benefits to be gained by taking climate action now.
It is time for a national Climate Act
It is clear that to effectively implement the necessary commitments maximise transition opportunities and ensure we have the right mix of tools, rules and incentives to meet our targets, Australia needs an overarching Climate Act to coordinate our climate change response.
Australia currently has over 80 pieces of legislation relating to energy and various elements of climate policy, however the sum of these parts does not equal an effective legal framework to ensure the necessary action on climate change. It is time for a national framework Climate Act to set the path to net zero, define responsibility, galvanise transition away from fossil fuels and incentivise innovation in meeting our targets to stay within a carbon budget that will limit warming to 1.5°C.
There is no more time to lose, but so many benefits to be gained by taking climate action now.
EDO is compiling legal solutions to ensure Australia’s domestic climate policy and law can do what needs to be done. Once COP 26 is over, there is a critical opportunity and imperative for national climate law reform and EDO will continue working with experts, communities, and governments to promote laws for a safe climate for all.
References
[1] See: COP26-Explained.pdf (ukcop26.org)
[3] Such legislated duties already exist in Victoria and in the laws of over 30 other countries including New Zealand, Canada and the UK.
[4] See: Compound Costs: How Climate Change is Damaging Australia’s Economy | Climate Council
