AUSTRALIAN CLIMATE BILL: The Ceasefire in the Climate Wars

INTRODUCTION

Climate change in Australia has been a critical issue since beginning of 21st century. Australia is becoming hotter and more prone to extreme heat - waves, longer season of wildfires, prolonged droughts and floods due to anthropogenic climate change.

According to Australian government Bureau of Meteorology, State of Climate 2020 report, ‘Australia’s climate has warmed on an average by 1.44 ± 0.24?C since the beginning of 20th century’.

Along with this, the country is also worst polluter per head of population in the developed world and is third – largest exporter of fossil fuels trailing behind Russia and Saudi Arabia in the world.

In early August 2022, the country incentive its climate action, when the Australian House of Representatives (the lower house of Parliament of Australia) had passed ‘Climate Change Bill’ ― the country’s first climate change legislation in more than a decade.

Earlier in late July, the bill was tabled in the house by federal minister for Climate Change and Energy Chris Bowen. 

The primary objective of the bill is to reduce greenhouse gas emissions targets by 43% by 2030 (below 2005 levels) (compared to Liberal – National Coalition government goal of reduction of 26 – 28%) and achieve “net zero” by 2050.

With this emission reduction target, Australia comes at par with nations such as Canada, South Korea and Japan, through lagging behind the climate action pledges taken by EU, U.S. & U.K.

In addition, the bill emphasis that the emission reduction target of 2030 is a floor not a ceiling, which means it is minimum cut that can happen but there is nothing to legally prevent deeper emission cuts.

The legislation comes primarily in the background of increased global action on climate change and provides a confidence building measure for the investors who are looking forward for investments into clean energy & other climate solutions in one of the sunniest nations across the globe.

BACKGROUND

In July 2012, the Gillard Labour minority government with support of Greens and independents, introduced carbon pricing scheme through Clean Energy Act of 2011. It was part of a broad energy reform package called Clean Energy Futures Plan, which aimed to reduce greenhouse gas emissions in Australia by 5% by 2020 (2000 base line) and by 80% by 2050 (2000 base line). The carbon price was applicable to facilities which emit more than 25,000 tonnes CO2 – e per year (Scope 1 emissions), but not to indirect emissions (Scope 2 emissions). The scheme was also not applied to road transport and agriculture. To offset the impact of carbon tax on some sectors of the society, government reduced income tax (by increasing the tax – free threshold) and increased pensions and welfare payments slightly to cover expected prices increases as well as compensation for some affected industries.

To offset the impacts of carbon tax, Australian government introduced multiple industry assistance programs such as ‘Job and Competitiveness Program’, ‘Coal Fired Generation Assistance’, ‘Steel Transformation Plan’, etc.

The Climate Change Authority, a statutory agency, was created in 2012 to recommend the setting of emission caps, conduct periodic reviews of carbon pricing process and to report on progress towards meeting national targets. These emission caps were to form the basis for cap – and – trade structure to commence in 2015.

As the carbon tax didn’t apply to all fossil fuels usage, it only had an effect on some of emitters of greenhouse gases. Among those emitters to which it applied, emissions were significantly lower after introduction of the tax. According to Investor Group on Climate Change (IGCC), emissions from companies subject to tax went down 7% with introduction of tax & tax was "the major contributor" to this reduction.

In a study conducted by Australian National University titled ‘Impact of the carbon price on Australia’s electricity demand, supply and emissions’ in July 2014,  estimated that carbon pricing scheme had cut carbon emissions by as much as 17 million tonnes – biggest annual reduction in greenhouse gas emissions in 24 years of records in 2013 as carbon tax helped drive a large drop in pollution from electricity sector. 

After the Liberal – National Coalition victory in 2013 Australian federal elections and with premiership of Tony Abbott, the act was repealed the carbon pricing scheme in July 2014 on the pretext of job cuts and forced energy inflation and replacing it with Emission Reduction Fund, paid by taxpayers from consolidated revenue.

Almost for a decade of fossil fuel – supporting Liberal – National coalition in power in Canberra, Australia was viewed as a global laggard on action to curb carbon emissions.

Even, the former Australian prime minister (then Treasurer) Scott Morrison in February 2017, waved a lump of coal in the House of Representative and said “this is coal, don’t be afraid’; as a testament to his Liberal party’s committed support of coal and gas lobbies, despite catastrophic bushfires and floods during his tenure (2018 – 2022).

During the campaigning for 2022 federal elections, incumbent Australian prime minister Anthony Albanese announced measures to be taken to tackle the climate crisis along with international allies and end the country’s a decade – old ‘climate wars’.

The draft bill was amongst the first legislation tabled in the Parliament after the Labour government came to power in Canberra after winning the 2022 federal elections on the policies to be undertake to accelerate emission reduction and to boost renewable energy.

HIGHLIGHTS

The prominent highlight of the bill is: 

1.      Reduction of emissions of at least 43% by 2030 & achieving net zero by 2050, one that any future govt. will also have to follow. 

2.    Strengthening the Climate Change Authority (established in 2012; statutory government agency tasked for providing independent advice on climate change policy) to monitor progress made against the emission targets, provide annual advice & inform the setting of future targets, including emission target setting under Paris Agreement, for 2035.

3.     The Federal minister for Climate Change will have report the progress made towards these targets to Parliament on Australia annually.

4.    Direct several key government agencies to consider the emission reduction targets in their investment/project approval decisions, including Australian Renewable Energy Agency, Clean Energy Finance Corporation and Infrastructure Australia so that these agencies have guidelines to adhere to when approving projects. (In the case of Infrastructure Australia for example, a new gas pipeline).

RESERVATIONS 

It doesn’t include a mechanism or funding to cut down the greenhouse gas emissions from electricity, industry, transport, agriculture or other parts of the economy and no funding to drive the change.

ANALYSIS

Prof. John Quiggin, a former member of Climate Change Authority in his article published in The Conservation, has labelled the proposed legislation “would be almost entirely symbolic, far from ambitious and in all likelihood will be easily met (emission cuts)”. Even before 2022 federal elections, Australia was on track for a 35% emissions reduction – well above the commitment of Morrison govt. This was mainly due to state govt. action & rapid take up of clean energy by households & businesses.

However, many experts has hailed it as the most significant piece of climate legislation in a decade, while some had also criticized it for not going far enough.

As per Richie Merzian, the climate & energy program director at Australia Institute, “this climate bill will not be enough to meet the Paris Agreement goals but it is a huge leap forward and opens a new era of cooperation and constructive policymaking. There is still a lot of work to go to reverse Australia’s role as the third largest exporter of fossil fuel, but there is hope & momentum that things are finally starting to change.”

Andrew McKellar, chief executive of Australian Chamber of Commerce, called for swift passage of the bill. “The best way to secure the planning, investment & innovation that will underlie an efficient energy transition is through legislated targets”.

However, the legislation provides a framework for stability in the midst of climate war between pro – climate activist and climate denial-ist and provides confidence in investment in green and eco - technologies across the country.

FIGHT IN THE SENATE

After the bill is passed by House of Representative in the August, the bill will tabled for a Senate committee inquiry and then placed for voting in the Senate (upper house) in September 2022.

However, the incumbent Labour government had the strength to pass the bill in the House of Representative. But, it would need the support of senators belonging to Australian Greens Party and one other independent senator possibly either pro – climate David Pocock or Jacqui Lambie, to get the bill pass through the Senate, as the leader of opposition and liberal parliamentarian Peter Dutton has opposed the legislation  

POLITICAL COMPROMISE ON THE LEGISLATION

As the Australian government didn’t conceded to Greens core demand for blanket ban on new fossil – fuel projects, a move rejected prime minister Anthony Albanese, who argue that this will result into import of expensive and relatively polluting fossil feel from other countries.

However, the announcement of 43% emission reduction being floor and not the ceiling and incorporation of “climate trigger” in the legislation, which means that the development proposals (mostly new coal and gas projects) will require prior approval for their impact on climate change.

Also, the commitment given by Labour government on “Dutton insurance” policy which will make more difficult for future governments to shy away from climate action has assuaged the parliamentarians of Australian Greens Party and Teal independents to vote for the bill in the House of Representative, will possibly follow same path in the Senate.

The Australian Conservation Foundation (ACF) has encouraged the parliamentarians of Australian Greens Party to pass Labour government climate change bill as a down – payment on ending Australia’s decade – long climate wars.

CONCLUSION

Almost a decade of politicized “climate wars” in the Australian polity, it seems that the climate change bill will be a model that acknowledges more political will is needed going forward to avert the climate crisis. The legislation is not a solution to negative impact that the country has seen due to anthropogenic climate change in recent years, but it is of course, a belated beginning of a major transition that the entire world has been slow to walk – up on.