Reviewing the 2020 Climate Policy Toolkit
by Peter Burnett
The Climate Change Authority (CCA) has released its latest advice to the Australian Government on how to respond to climate change. It’s contained in a report titled: Prospering in a low-emissions world: An updated climate policy toolkit for Australia.
For a body with three seats out of seven occupied by former Coalition politicians, it’s a bit of a surprise as it favours strong climate action.
Who or What is the CCA?
The CCA was set up by the Gillard Labour government in 2011. The Climate Change Authority Act was one of 18 bills forming the Clean Energy Future package, the centrepiece of which was a carbon price (also known as the ‘carbon tax’). The carbon tax didn’t survive of course, but thanks to Al Gore’s powers of persuasion with Clive Palmer, the CCA Act did. The CCA’s role includes research, and this latest report is released as a ‘research report’.
The CCA has seven members. The chair, Dr Wendy Craig, has headed a number of statutory authorities, including the Great Barrier Reef Marine Park Authority (GBRMPA) and the Murray Darling Basin Authority. While not political, she is trusted by the Government, as seen in her conducting the recent review of the impact of the EPBC Act on agriculture, a review loaded with political sensitivities.
Also a member of the CCA is another former head of GBRMPA, Dr Russell Reichelt.
Most significantly, three members of the Authority are former conservative politicians. Kate Carnell is a former Liberal ACT Chief Minister; John Sharp is a former National Party transport minister and Mark Lewis is a former Liberal agriculture minister in WA.
Finally, Stuart Allinson has an industry background, while the Chief Scientist, Dr Alan Finkel, is a member ex officio.
A updated Climate Policy Toolkit
The CCA produced its original Policy Toolkit report in 2015, at the request of government. This update appears to be unsolicited.
The report presents 35 recommendations about transitioning Australia to a low emissions future. But it does so ‘building on the Government’s current climate change policy settings’.
The Government rejected the CCA’s earlier advice in the lead-up to the Paris Conference in 2015 that it should aim to reduce emissions (on a 2000 baseline) by 40-60% by 2030. It is not surprising then that this report takes the Government’s 26-28% by 2030 emissions-reduction target as a given.
Because governments don’t like taking the tough decisions needed to fix the environment, advisers often stress economic opportunity when serving up unpalatable recommendations. This report is no exception, with Dr Craik declaring in her media release that ‘we need to position our economy for the coming changes in global trade and investment markets and seize on the opportunities before us, or risk being left behind.’
The updated advice
Despite this, there is some good advice in the recommendations. I’ve listed what I think are the highlights below (with my ‘translation’ of what I think they mean):
Develop a long-term climate change strategy that secures Australia’s contribution to the achievement of the temperature goals of the Paris Agreement.
Translation: we should do our bit to stop temperatures rising, not just to meet (inadequate) national targets.
Governments should work together to support industries and communities facing an uncertain future to identify pathways for industries to evolve and remain competitive and to exploit new economic opportunities.
Translation: we don’t really like the Left-oriented phrase, the ‘just transition’, but we agree with the idea of managing the transition to a low carbon economy so that sections of the community are not disadvantaged.
Australia should aim to meet its 2030 Paris Agreement target using emissions reductions achieved between 2021 and 2030.
Translation: don’t claim Kyoto carryover credits.
Develop an international climate strategy to support a strong global response to climate change that minimises physical impacts on Australia and increases international demand for Australia’s emerging low-emissions export industries.
Translation: push other countries to up the ante as it’s in our national interest.
Review and update the 2015 National Climate Resilience and Adaptation Strategy.
Translation: we need to do more in preparing to deal with the impacts of climate change.
In the electricity sector, advance electricity system security; fast-track reforms for integrating large amounts of low- and zero-emissions generation into the electricity market; align bilateral Commonwealth-State energy agreements with AEMOs Integrated System Plan; and increase certainty on the timing of the retirement of ageing coal generators to facilitate timely investment in replacement capacity and storage.
Translation: hurry up and fix energy policy.
Enhance the Safeguard Mechanism to deliver emission reductions from large emitters in industry, with declining baselines with clear trajectories and the ability to trade under- and over- achievement once baselines have commenced declining.
Translation: emissions trading, thou name shall not be spoken, though thy spirit be honoured.
For vehicles with internal combustion engines, reconsider implementing a greenhouse gas emissions standard for light vehicles and undertake a cost-benefit analysis of an emissions standard for heavy vehicles.
Translation: traditional transport can’t be left out of climate policy.
For electric vehicles, minimise barriers to electric vehicle uptake, including by: ensuring adequate infrastructure coverage on highways and in regional areas; considering implications for electricity network tariff reform and fuel excise revenue, and setting targets for electric vehicle adoption in government fleets.
Translation: Time to get serious about electric vehicles, including the tricky topic of new taxes to replace lost fuel excise.
Land use and agriculture activities should continue to be covered by the Emissions Reduction Fund, with credits continuing to be used as offsets for facilities covered by the Safeguard Mechanism.
Translation: Keep buying credits from agriculture until the Safeguard Mechanism above forces industry to buy them instead.
Introduce a Land and Environment Investment Fund (that is, a Clean Energy Finance Corporation (CEFC) for the land), to invest in low-emissions and climate-smart agriculture. Investigate and implement the most effective incentives to encourage the use of emissions-reducing inputs in agriculture.
Translation: Self-explanatory on the Fund. Farmers should be hit with carrots rather than sticks.
Recognise the benefits of a circular economy approach for emissions reductions, ensure the National Waste Policy Action Plan considers industry development, the waste hierarchy, research and development, training and barriers to adoption; and emphasises the creation of industries in regions undergoing transition.
Translation: governments need to drive us much further down the path of reuse and recycling.
Reinvigorate the National Energy Productivity Plan with enhanced ambition and additional resources, including by implementing a National Energy Savings Scheme that builds on existing state and territory energy efficiency schemes; strengthen and extend energy performance standards for appliances and commercial equipment (eg hot water products and pumps, boilers and air compressors); accelerate energy efficiency improvements for buildings.
Translation: energy efficiency has always offered cheap and low-pain options, so get on with it.
Continue to fund the Australian Renewable Energy Agency (ARENA) and consider expanding its remit into other sectors requiring R&D for low-emissions technology or practice. Expand the remit of the Clean Energy Finance Corporation (CEFC) to allow it to invest in emissions reduction technologies in all sectors to help overcome barriers to finance. Restrictions on the scope of the CEFC’s activities, its portfolio mix and the financial instruments it can use should be lifted. The Government should consider making further capital injections in the CEFC to fund this expansion.
Translation: the investment mechanisms that the Abbott government wanted to get rid of have proven very successful and should be expanded.
Together with the major accounting bodies, examine the phasing-in and mandatory reporting of climate-related risks and mainstream climate-related disclosures in companies’ audited financial statements. Assist the finance and investment sector to develop standards and verification processes for green finance products and services.
Translation: the impacts of climate change on business are here. This means getting companies into mandatory reporting but also capitalising as companies are driven by risks and stakeholders to mitigate their climate impacts.
Not a bad package overall
All in all, this is not a bad package, containing some carefully couched hints from a body that includes the Government’s own colleagues, to up the ante on climate, even on ‘no go’ areas like the 2030 targets.
Image: Part of Figure 5 from the report Prospering in a low-emissions world: An updated climate policy toolkit for Australia