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Client Update: Climate change policy news: more guidance for Australian businesses

6 December 2016

In brief: Over the past fortnight, both the Federal and Victorian Governments have made progress in climate change policy and regulation, with the Federal Government announcing its terms of reference for the 2017 climate change policy review, and the Victorian Government tabling its new Climate Change Bill 2016 in Parliament last week. Partner Chris Schulz (view CV), Senior Associate Emily Gerrard and Associate Emily Johnstone report.

Federal review of Australia's climate change policies

The Federal Government yesterday announced its terms of reference for the 2017 climate change policies review. The review is intended to examine whether Australia's regulatory and policy settings remain appropriate and will achieve Australia’s 2030 emissions target and Paris Agreement commitments. More specifically, the review will look at:

  • the opportunities and challenges of reducing emissions on a sector-by-sector basis;
  • the impact of policies on jobs, investment, trade competitiveness, households and regional Australia;
  • the integration of climate change and energy policy, including the impact of state-based policies on achieving an effective national approach;
  • the role and operation of the Emissions Reduction Fund and its safeguard mechanism;
  • complementary policies, including the National Energy Productivity Plan;
  • the role of research and development and innovation;
  • the potential role of credible international units in meeting Australia's emissions targets; and
  • a potential long-term emissions reduction goal post-2030.

As noted in the Federal Government's announcement, the review will be informed by developments in international climate policy, and include a focus on electricity prices for end users. The review will build on parallel processes, including the Finkel Review of the reliability and security of the National Electricity Market, and the work of the Ministerial Forum on Vehicle Emissions.

Given the breadth of the terms of reference and the challenges and opportunities for governments, the private sector and communities, the 2017 review provides an opportunity to provide certainty in relation to regulatory and policy settings post-2020. The review will commence with the release of a discussion paper and consultation with stakeholders and the community in February 2017 and conclude by the end of 2017.

Victorian Climate Change Bill

The Victorian Government introduced the Climate Change Bill 2016 (Vic) into Parliament on 22 November 2016. The Bill aims to implement the majority of the Government's commitments outlined in its response to the 2015 independent review of the Climate Change Act 2010 (Vic).

The Bill repeals and re-enacts the Climate Change Act 2010 with a number of key amendments, which we have briefly outlined below.

  • Long-term target
    The Bill embeds into legislation the Government's long-term target announced in June 2016 of net zero greenhouse gas emissions by 2050. The Bill imposes duties directly on the Premier and the Minister for Energy, Environment and Climate Change to ensure that this target is met.
  • Interim targets
    To ensure an orderly transition to 2050 while limiting Victoria's cumulative emissions, the Bill requires the Premier and Minister to implement a system of five-yearly interim targets from 2020. The targets must be set in advance having regard to independent expert advice, advances in technology and environmental, economic and social impacts.
  • Climate change strategy and adaptation plans
    The Bill also introduces a five-yearly climate change strategy, to be prepared by the Minister every five years from 2020. The strategy will outline the Government's priorities across the areas of mitigation, adaptation and transition, and will be supported by targeted 'adaptation action plans' focusing on key areas such as transport, the built environment and primary production.
  • Pledge system
    The Bill also implements a new whole-of-economy pledge model based on the United Nations Framework Convention on Climate Change process and the Paris Agreement. The model contains both 'whole-of-government' and 'sector' pledges, which will require the government to reduce its own emissions and to ensure that its ministers commit to emissions reductions in key sectors such as energy, waste and agriculture.
  • Other changes
    The Bill also contains a number of other provisions designed to assist with implementing its objectives, including a reporting regime that requires reports at the end of each interim target period, as well as regular updates to the community about emissions data and the impacts of climate change in Victoria.

    The Bill also amends the Environment Protection Act 1970 (Vic) to clarify the EPA's climate change functions, including recommending to the Governor in Council that policies and regulations be implemented to regulate greenhouse gas emissions in Victoria.

Other parts of the Bill remain largely unchanged, including statutory recognition of forestry, carbon sequestration and soil carbon as proprietary interests, and providing for the making of registrable management agreements. It also continues the Secretary's power to manage Crown land for carbon sequestration on behalf of the Crown.

According to the Victorian Government, the Bill will provide a platform for 'effective, state-based climate action' that will supplement national actions and the Government's other strategies, including the updated water plan, Plan Melbourne, biodiversity reforms and a proposed Marine and Coastal Act.

How does this affect you?

The outcomes of the climate change policies review and the passage of the Climate Change Bill through Parliament will provide further guidance to Australian businesses on the practical implementation of the Paris Agreement in Australia. We will continue to monitor the status of these initiatives.

 

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