Here’s what you need to know about the Australian government’s climate change bills

Presuming they get support from the Senate crossbench, the Australian government’s climate change bills are expected to become law next month.

The bills, among other things, legislate Labor’s election commitment to cut greenhouse gas emissions to 43% below 2005 levels by 2030, and to reach net zero by 2050. This sets in law Australia’s latest Nationally Determined Contribution (NDC) to the global Paris Agreement on climate change.

The climate change bills are a strong start. They play a valuable role in setting long-term direction for Australia’s climate policy, increasing certainty for business and the community. They embed emissions reduction objectives into some government functions, and help align the government’s decision-making, spending and planning with its climate goals.

However, experience internationally – and Climateworks Centre analysis – shows there are opportunities for Australia to take further legislative action to help limit global warming to 1.5°C.

What’s in the bills?

The bills before the Parliament are ‘framework legislation’. Rather than legislating a particular solution, they prescribe an end-goal and interim reporting on that goal, allowing the government to then determine the most appropriate course of action at any given time. Framework legislation has been put in place in a number of countries, including the United Kingdom, as well as in South Australia, Tasmania, Victoria and the ACT.

The Australian government’s climate change bills are actually a package of two pieces of legislation.

The first is the Climate Change Bill that has four main parts.

Firstly, it puts Australia’s NDC into law. It also creates a process for an annual climate statement, to be tabled in Parliament by the Minister for Climate Change, outlining progress towards the targets, the effectiveness of government policies in reducing emissions, and the impact of these policies on rural and regional Australia.

The bill also empowers the Climate Change Authority in two new areas – to advise the Minister for Climate Change to inform the climate statements, and to advise on new greenhouse gas emissions reductions targets to be included in a new or adjusted NDC.

The Minister must request this advice for a new target every five years.

The second piece of legislation is the Climate Change (Consequential Amendments) Bill, which incorporates emissions reductions targets into 14 existing Acts.

This second bill includes amendments to:

• existing climate change, emissions reporting, renewable energy and carbon farming legislation
• select infrastructure and financing legislation
• Acts governing the CSIRO, Clean Energy Finance Corporation, Clean Energy Regulator, and Australian Renewable Energy Agency.

What’s the status of the bills?

The bills recently passed the House of Representatives, incorporating some amendments proposed by independents. These included clarifications that the legislated targets were a floor, not a ceiling, and increasing the role of the Climate Change Authority.

Independent Helen Haines secured amendments regarding regional economic benefits and considerations, but Andrew Wilkie and the Greens were unsuccessful in their attempts to amend the 2030 target to be more ambitious.

Negotiations between the Australian government and the crossbenchers are continuing, as the bill is considered by the Senate committee, leading up to a debate and vote in the upper house.

While there’s a strong likelihood the bills will pass the Senate, it’s unclear whether there’ll be further amendments.

What would these bills mean for climate action in Australia?

These bills represent a good beginning in setting up framework climate change legislation for Australia. They establish key parts of a framework for climate action.

In legislating emissions reduction targets, the climate change bill sends a strong signal to business, investors, trade partners and the community, and so increases business confidence.

It also mandates a reporting process that will track progress towards those targets, and expands the advisory role of the Climate Change Authority.

The Climate Change (Consequential Amendments) Bill starts the process of embedding the targets into government policies and decision-making.

These bills will help Australia achieve its current NDC. But, as the world strives to limit warming to 1.5°C, Australia will be expected to lift its ambitions further so that it can play its full part in implementing the Paris climate goals.

To help Australia meet its net zero goals, further learning from good practice in framework climate legislation from Australia and around the world shows amended or future legislation could:

• Expand on the current consequential amendments to fully embed the emissions reductions objective across all government decisions, including policies, planning and spending.
• Explicitly task the Climate Change Authority with reviewing Australia’s existing NDC at the same time as reviewing and making recommendations for the next Australian NDC. For example, in two years the government will be asked to submit its NDC for 2035. At this point, it would be best practice for the current 2030 target to be assessed with consideration given as to whether it needs to be adjusted.
• Obligate the creation of policies designed to achieve emissions reduction targets across different sectors, including regular reports on the effectiveness of these policies. This can assist with the development of targeted roadmaps and policies. Experience elsewhere has shown such policies to be helpful in reducing emissions.

The targets currently included in the Climate Change Bill are also not yet aligned with trajectories that are fully compatible with the Paris climate goals.

Climateworks’ analysis shows Australia can still play its full part in the Paris climate goals; however, very strong emissions reductions are required this decade.

The Australian government can use the processes established by the climate change bills to continue to lift its ambitions, striving for further reductions in line with climate goals – and make the most of opportunities for Australia’s economy from the emerging global net zero economy.