After a lost decade, Australia now has legislation before the parliament aiming to take (or at least plan for) action on climate change.
It mandates a 43% cut in GHG emissions by 2030, compared to 2005, and commits to net zero by 2050.
The bill is designed to set the pathway for this government, and those to come. It will shift power back to the Climate Change Authority to both monitor progress, plan policy and prepare Australia’s ambitions for the Paris Agreement, for 2035.
It’s a new law, and it will require the Minister for Climate Change, now Chris Bowen, to report annually to the parliament and be held accountable for progress.
It introduces legislation that will reduce fringe benefit tax for some electric cars, and it allocates $20 billion to upgrading the power grid, which is vital to shift the country towards the target of 82% renewable power by 2030.
Where the bill falls short is a failing to outline any specific policies or rules to actually drive reductions in emissions at their source, it doesn’t put constraints on fossil-fuel powered energy production. But also, it doesn’t address the many coal and gas mining projects that have the potential to add far more carbon emissions to the atmosphere than abatement efforts will subtract.
Of course, this is all inline with the labor government’s election promises. It was made clear by Anthony Albanese that they would not go as far as putting a moratorium on new coal and gas developments, which is what Greens leader Adam Bandt is calling for.
“That’s not the policy of the Labor Party and we won’t be supporting it because that would have a devastating impact on our economy.” PM Anthony Albanese says.
A further option put forward by the Greens is a ‘climate trigger’ which would be included in the Environment Protection and Biodiversity Conservation (EPBC) Act so that any new project must have its climate change impact considered before being approved.
The labor party has so far shown little interest in this kind of market intervention, but has suggested their focus will be on the ‘safeguard mechanism’ which restricts the emissions of Australia’s largest polluters.
Investors Welcome a Pathway for Climate Policy
For investors, the bill offers a welcome sense of certainty around the direction of government policy, even if it falls short of mandating caps on carbon emissions.
The Investor Group on Climate Change (IGCC) recognises the huge potential for growth;
“The introduction of the Climate Change Bill to parliament is an opportunity to unlock hundreds of billions of investment in climate solutions across the economy.” says Erwin Jackson, Director of Policy, at IGCC.
“A clear, stable, robust, and long-term legislative framework to manage the systemic economic risks and opportunities of climate change can support investment in the clean industries that will address climate goals, and support energy security and industrial development. IGCC has estimated that around $131 billion in new investment this decade can be unlocked with policies that would deliver on stronger emissions targets.”
For Kristy Graham at the Australian Sustainable Finance Institute (ASFI) it’s important for Australia to keep up with global norms in order to remain economically competitive;
“ASFI is supportive of the Climate Bill. Enshrining near-term and 2050 targets in legislation, and expanding the Climate Change Authority’s role in promoting integrity and accountability, are good first steps to bring more certainty on the direction of travel for climate policy in Australia.” says Kristy Graham.
“These changes will help signal that Australia is transitioning in line with the rest of the world, ensuring our economy can remain competitive and supporting the domestic transition to net zero emissions. ASFI looks forward to working with the Government and others across the finance sector to ensure Australia’s financial system can help unlock progress towards achieving Australia’s emissions targets, while also supporting a more resilient and socially inclusive Australia.”
Kylie Charlton at Australian Impact Investments recognises the benefits for investors in having confidence about the long-term policy direction;
“The proposed Climate Bill is an important step that will help build investor confidence that climate policy going forward will be supportive of the transition to a low-carbon economy. This confidence is critical to capital being directed to drive initiatives to decarbonise the economy and that very often have long dated investment horizons”. says Kylie Charlton, Managing Director of Australian Impact Investments.
For Tim King at Melior, it’s a start;
“Whilst Melior believe that the Climate Change Bill being considered by the Federal Parliament could be more ambitious and detailed, we view the proposed legislation as a vitally important first step for providing a foundation for more impactful climate action after many years of delay and uncertainty.”