Focus: Action Plan for Climate Change announced in Victoria
30 July 2010
In brief: Victoria plans to reduce its carbon emissions by 20 per cent compared to 2000 levels by 2020, decreasing greenhouse emissions generated by brown coal power plants by up to four million tonnes by 2014. In the absence of a federal Carbon Pollution Reduction Scheme, the Brumby Government claims that the strategies in its Victorian Climate Change White Paper will make Victoria the national leader in addressing the challenges associated with climate change. Partner Grant Anderson (view CV), Senior Associate Charlie Harrison and Law Graduate Natasha McNamara report.
- Victoria's Action Plan
- Twenty per cent emissions reduction by 2020
- Partial Hazelwood closure
- Support for solar power
- Business encouraged to adapt to low carbon economy
- Establishment of the Victorian Carbon Exchange
- Other key actions
- What now?
How does it affect you?
- Legislation will introduce a 2020 target for greenhouse gas emissions that is 20 per cent lower than 2000 levels. This target is more ambitious than the Federal Government's commitment to a five per cent reduction in emissions from 2000 levels by 2020.
- New power stations will be required to meet a target emissions level of 0.8 tonnes of CO2 equivalent per MWh.
- Large scale solar power projects are expected to supply approximately five per cent of Victoria's electricity by 2020.
- The Government will regulate emissions intensive activities through works approvals and licences granted in respect of the highest emitting industrial and commercial sites.
- Rights in carbon stored through vegetation and soil sequestration will be recognised, which will enable the establishment of tradeable carbon offsets based on such sequestration.
The White Paper released by the Victorian Government on 26 July 2010, Taking Action for Victoria's Future: Victorian Climate Change White Paper The Action Plan (the Action Plan), outlines the Victorian framework for tackling climate change. The Action Plan foreshadows a Victorian Climate Change Bill, which was introduced into Parliament on 27 July 2010. The Climate Change Bill:
- sets a 2020 target for reducing greenhouse gas emissions by 20 per cent on 2000 levels and requires the Government to report on progress towards meeting the target every two years;
- amends the Environment Protection Act 1970 (Vic) to allow for the imposition of a target emissions level for new power stations and to enable the regulation of large emitters;
- requires the Government to develop a Climate Change Adaptation Plan every four years and government decision-makers to take climate change into account for specified government decisions;
- establishes legal rights in forestry and vegetation and soil carbon sequestration that can be registered and transferred, and repeals the Forestry Rights Act 1996 (Vic); and
- permits the use of funds in the existing Victorian sustainability fund for the Climate Communities program and contemplates the Government entering into 'climate covenants' with communities, industry and regions.
The Government intends to undertake community and industry consultation and then release a White Paper Implementation Plan. Victoria will review its Action Plan if the Federal Government introduces an emissions trading scheme or imposes a price on carbon.
The Action Plan includes 10 main categories of action: imposition of targets (including the 20 per cent emissions reduction target), reduction of emissions from brown coal, promotion of solar energy, improving household energy efficiency, encouraging green technology development, supporting transition in agriculture, encouraging transport emissions reduction, improving government energy efficiency, developing plans for adaptation and supporting community-based projects. Five key elements of the Action Plan are outlined below.
The Climate Change Bill sets a target for reducing greenhouse gas emissions by 20 per cent on 2000 levels by 2020. This target is the latest in a series of Victorian climate change strategies, including the mandatory 10 per cent Victorian Renewable Energy Target that was introduced in 2007 and that is soon to be transitioned into the national Mandatory Renewable Energy Target. According to the Action Plan, emissions will be reduced through improving energy and fuel efficiency, changing Victoria's energy production mix, changing agricultural practices and land carbon sequestration. The Action Plan outlines the steps the Victorian Government will take to reduce emissions up to 2014. If the Federal Government fails to impose a price on carbon by 2014, the Government will develop further strategies to meet its 2020 target. In the longer term, the Victorian Government is committed to advocating a reduction in greenhouse gas emissions of 80 per cent on 2000 levels by 2050.
Under the Action Plan, the Government commits to tackling the State's reliance on brown coal by reducing Victorian brown coal-fired generators' greenhouse gas emissions by up to four million tonnes by 2014. A total reduction of 28 million tonnes by 2020 is projected. The Action Plan states that the 2014 target is equivalent to shutting two units of the Hazelwood Power Station. The Action Plan does not unilaterally commit the Government to a partial closure of Hazelwood. Rather, the Action Plan indicates that the Government intends to engage all brown coal-fired electricity generators in discussions on how these emissions reductions can be achieved. However, in his statements to the media about the Action Plan, Premier Brumby commented that closure of two of the eight units at Hazelwood is the most cost-effective way to achieve Victoria's emissions reduction target. Premier Brumby indicated that the State and Commonwealth governments will negotiate with Hazelwood's owner, International Power, and other stakeholders in relation to Hazelwood's 'staged closure'.1
The Action Plan notes that Victoria will require the support of the Federal Government to reduce the State's dependency on brown coal. Further, the Action Plan states that '[w]hen the Commonwealth government makes a carbon price operational, it will have the primary responsibility for financing economic change in the Latrobe Valley.' However, the Action Plan also indicates that if a carbon price is not imposed nationally, the Victorian Government may regulate carbon emissions from existing brown coal-fired generators. Under the Action Plan, the construction of new coal-fired power stations that use conventional technology will effectively be banned, because all new power stations will be required to meet a target emissions level of 0.8 tonnes of CO2 equivalent per MWh.
The Action Plan states that a large-scale solar feed-in tariff will be introduced. However, this feed-in tariff is not one of the initiatives that is included in the Climate Change Bill. Tenders for solar developments will be called for after the design of the feed-in tariff has been finalised and after the Federal Government has announced the successful Solar Flagship projects (three Victorian projects have been shortlisted). The large-scale solar feed-in tariff is intended to result in solar generation of five per cent of Victoria's electricity supply by 2020. It will operate alongside the existing premium household feed-in tariff, which compensates householders who supply solar-generated electricity to the grid.
The Climate Change Bill amends the Environment Protection Act 1970 (Vic) to empower the Environment Protection Authority to regulate greenhouse gas emissions. As a consequence of these amendments, the Environment Protection Authority will have the power to enforce the replacement of old, inefficient technology used at industrial and commercial sites of emissions intensive activity through the grant of works approvals and licences.
The Government also plans to establish a 'green door' for energy projects that produce no more than 0.5tCO2 per MWh. Under the green door mechanism, energy projects that meet this emissions threshold will be assigned a project manager who will assist with the application and planning stages of project development. This initiative is intended to streamline low emissions energy projects, but the Action Plan provides little detail about its operation.
The Government hopes to position Victoria as a leader in the development of clean energy technology through the development of a 'ClimateTech Strategy'. Again, little detail on this component of the Action Plan is provided. The Action Plan promises that the strategy will be released by the end of 2010.
The Action Plan provides for the establishment of a carbon exchange so that businesses and members of the general public will be able to voluntarily offset their carbon emissions. Offsets created by Victorian landholders and forest operators will be able to be procured through a central offset purchasing system.2 The offsets will be generated through soil carbon sequestration, changes in agricultural practices and new forest plantations. Under the Climate Change Bill, landholders who engage in vegetation and soil sequestration will be granted legal rights in the sequestered carbon that can be registered and transferred.
The Action Plan also addresses household energy efficiency, transport, government energy efficiency, adaptation and community programs. Key actions in these areas include:
- setting a target of five-star energy efficiency in existing homes by 2020;
- allowing drivers to offset their vehicle emissions when registering their vehicle;
- improving the energy efficiency of government buildings and facilities by 20 per cent by 2018;
- legislating to require the Government to develop a Climate Change Adaptation Plan, and creating a Climate Change Preparedness Program for communities and local industries; and
- expanding the Climate Communities program. The Climate Communities program currently provides grants to Victorians taking action to tackle climate change and funds nine regional facilitators to support community efforts. The program will be expanded to provide various forms of support for action on climate change by households, businesses, community groups and schools. For example, a new Climate Communities web portal will provide householders with information on all Victorian Government climate change programs, services and rebates.
The Victorian Government has seized the initiative in taking action on climate change with its Climate Change Action Plan. The Climate Change Bill, put before Parliament this week, introduces many of the Victorian initiatives. The detail that the Action Plan lacks in several areas will be fleshed out in due course in the White Paper Implementation Plan and through the utilisation of powers provided by the Climate Change Bill.
- Premier of Victoria, 'Brumby Unveils Plan to Lead Nation on Climate Action' (Media Release, 26 July 2010).
- Premier of Victoria, 'Farmers to Benefit from White Paper Actions' (Media Release, 26 July 2010).
- Grant AndersonPartner,
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- Anna CollyerPartner, Sector Leader - Power & Utilities,
Ph: +61 3 9613 8650
- Chris SchulzPartner,
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- Jim ParkerPartner,
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- John GreigExecutive Partner - Energy, Resources & Infrastructure,
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- Bill McCrediePartner,
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