New ‘Big Agenda’ for Nature faces many hurdles

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By Peter Burnett

This is a version of an article published on 12 December 2022 in The Conversation; it contains some additional material.

The Albanese Government’s ‘Nature Positive Plan’ reform package last week, announced by Environment minister Tanya Plibersek last week, is a much-anticipated response to Professor Graeme Samuel’s 2020 Review of the Environment Protection and Biodiversity Conservation (EPBC) Act. It will be a major plank in the Albanese government’s 2023 agenda.

The plan is packed with policy announcements, most of which stick close to Samuel’s recommendations. Major stakeholders have welcomed the package, none more so than Samuel himself, who expressed ‘complete elation and unqualified admiration and respect’ for Plibersek.

The heart of the plan is a bold decision to drop the current ‘box-ticking’ approach to development approval. Instead, decisions must deliver environmental outcomes that reflect new national environmental standards.

As Plibersek puts it, the government now has a ‘big agenda’ supporting a vision of ‘net zero and nature positive by 2050’.

Dauntingly for her, the path of this big agenda stretches far over the political horizon and is littered with hurdles.

Here are ten hurdles the minister will have to jump, just for starters.

1. Climate trigger

The Greens and several cross-benchers have already criticised the absence of a ‘climate trigger’ in the reforms. This would expose large developments to having their carbon emissions limited as a condition of approval. Developments might even be refused for excessive emissions.

The government argues that regulation should not duplicate other measures, especially the safeguard mechanism, which already limits emissions from major facilities. Fair point, but so is the concern that Australia’s primary environmental law, designed to protect matters of national environmental significance, does not deal with the most significant environmental threat of all.

There is scope for a limited climate trigger, to fill gaps in climate regulation, so perhaps a deal will be done. Large-scale land clearing is climate-significant, but not regulated for carbon impacts. Similarly, Australia does not regulate large developments for their ‘scope 3’ downstream domestic emissions (eg, domestic gas production). Now that we have a Climate Change Act and an emissions budget, there is a case for a reserve power not to approve projects on the ground that there is no room left in this budget to accommodate these omissions.

2. Weasel words in the standards

Setting standards for nature-based decisions is cutting edge; the idea is to spell out exactly what a healthy environment looks like, and how much environment we need.

Samuel worked with stakeholders to include some draft standards in his report; in doing so he rightly counseled against ‘weasel words’ — words that rob the standards of their punch, like ‘as far as possible’.

But one person’s weasel words are ‘flexibility’ to another. It won’t be easy keeping the devil out of the detail.

3. Sell standards to states

To eliminate duplication, a major bugbear for business, the reforms provide for states to be accredited to take decisions that are otherwise for federal government, provided they meet the standards. If the states agree to meet the standards for federal decisions, environment groups may push to apply the standards to state-only decisions. States will resist being driven by federal policy.

4. Get into bed with states on regional planning

Regional environmental plans sit alongside national standards at the heart of the reforms. Standards will define what needs to be protected, while plans will say where protected values lie and how much protection is needed, on a traffic light system: red for irreplaceable, orange for values that can be offset, and green for minimal restrictions.

Federation makes it almost essential that the federal government partner with states in preparing regional plans. Plans could be based on Australia’s 56 Natural Resource Management regions or 89 bioregions.

Plibersek has moved early, signing an MOU with Queensland to work together on regional plans on the day she announced the reforms. Even so, this is a long and winding road — time-consuming, expensive and politically challenging.

5. Forest deal

Regional forestry agreements (RFAs) are exempt from the EPBC Act, though both have been criticised for similar failings: inadequate conditions on development, inadequately enforced.

The Rudd government dismissed a similar recommendation pre-emptively. Labor still remembers the 1995 ‘siege of Canberra’, in which logging trucks encircled Parliament House.

One can almost feel the rumble of logging trucks in the cautious language of the plan to ‘begin a process of applying’ the new national standards to RFAs, in consultation with stakeholders.

6. Respect Indigenous views and values

Professor Samuel was rightly passionate about bringing true respect for Indigenous views and values into the EPBC Act. The challenges however do not stop with respectful engagement.

The Rudd Government endorsed the UN Declaration on the Rights of Indigenous People (UNDRIP) and a Parliamentary Committee is considering its domestic application. A key UNDRIP principle is free, prior and informed consent. If we listen respectfully to Traditional Owners, but are told ‘no’, will this translate this into a veto?

7. Kick-start nature repair markets

The Albanese government has placed significant emphasis on the environmental role of the private sector, through ‘nature repair markets’. The plan promises to establish the functional components of these markets.

The government says it cannot foot the repair bill alone. That may be so, but the private sector is motivated by profit, supplemented at the margins by social licence and philanthropy. The government may build a market but with these motivations only a few will come. Often, there just is no business case for voluntary action.

It would be different if we put a price on biodiversity, as we briefly put a price on carbon but, thanks to Tony Abbott, that idea is ‘dead, buried and cremated’.

8. Offsets

Offsets seek to compensate Nature for approved loss, eg clearing habitat for construction. The compensation should be ‘like for like’, eg growing new koala habitat to substitute for cleared habitat. The bottom line is that if offsetting is not possible, nor is the development.

The plan will replace this last restriction with a rule that if offsetting is not possible, pay cash and proceed. Government will spend it on something else, applying a ‘better off overall test’ (BOOT).

If we run out of koala offsets, would feral cat reduction, which benefits quolls but not koalas, leave nature better off? Does the offset need to save two quolls for every koala lost, or is one for one enough? Tricky.

This policy would fit better with a policy goal of conserving whole ecosystems rather than individual species.

9. Build not just trust but support

Samuel found that all sides had lost trust in the EPBC Act. Some things are easily fixed. Full transparency, clear policies, reasons for decision given routinely.

Ironically, things that restore trust will tend to box decision-makers in, just as magicians would find it much harder to perform their tricks if we could see into the magic box.

10. Buckets of money

Of the many hurdles confronting Plibersek in the near term, the highest sits in her own Cabinet room, where she will seek funding in the 2023 Budget. One recent study found that federal and state spending, on threatened species alone, was 15% of what was needed.

Whatever funding is announced, history suggests it will fall several zeros short of what Nature needs.

Endurance race

The biggest problem with the EPBC Act has not been what sits within it, but what does not sit behind it. It has been chronically under-resourced and under-implemented. EPBC is a story of unrealised vision.

We cannot afford a repeat of the EBPC story — better to dig deep and make the Nature Positive Plan work.

Banner image: Image by Christel SAGNIEZ from Pixabay

The fifth and final transformation: Restoring trust in decision-making

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By Peter Burnett

This is the last of my series of blogs arguing there are five transformations implicit in Professor Graeme Samuel’s review of national environmental law,* to which the Albanese government will respond in early December.

The first four transformations were to:

The fifth and final transformation is to restore trust in environmental decision-making.

Trust makes the world go round

It’s true, trust makes the world go round.

Democracies in particular depend upon it. Just look at the polarisation, indeed tribalisation, that has occurred in the United States, culminating in the insurrection at the Capitol building in Washington on 6 January 2021.

Trust in government has declined in Australia as well. According to the respected Scanlan Research Institute, trust in the federal government (measured as people saying that they trusted the government at least most of the time) reached a low of 27% in 2013.

This recovered dramatically with the pandemic — trust in the federal government had more than doubled by 2020, to 55% — but it started to drop back again last year (48%). Even if trust were to stabilise around 50%, which seems unlikely, that’s not a great result.

There is no trust in our nation’s most important environmental law

Against that backdrop, it is not surprising that one of the main findings of the Samuel Review of the EPBC Act was that it was not trusted, either by business, who are regulated by the Act, nor by the wider community, who rely on it to protect the environment.

Business views the EPBC Act as cumbersome, involving duplication between federal and state systems; slow decision-making; and as facilitating legal challenges intended to delay projects and drive up costs for business (sometimes called ‘lawfare’).

Businesses are concerned in particular by long delays — for business, time is money.

A major project, such as a mine, can take nearly 3 years to assess and approve. For a business, this is far too long. Most people would acknowledge this.

The community on the other hand, are frustrated by the Act, viewing their participation as limited and process-oriented.

Often, people cannot see how the various environmental, economic and social considerations are weighed by the environment minister and are left with a general perception that outcomes are unclear, if not unsatisfactory. Compliance and enforcement are seen (rightly) as weak and environmental monitoring ineffective (also, clearly correct).

According to Professor Samuel, environmental groups often bring legal challenges because of these frustrations. They have the sense that decisions are out of step with community values, but do not have sufficient ready access to information to know exactly why.

Samuel’s recipe for restoring trust

Happily, Samuel had a recipe for restoring trust in the EPBC Act (or its successor).

His most important recommendation supporting trust is the fundamental shift from process-based decision-making to outcome-based decisions, applying the new national environmental standards (which I discussed as the first transformation). Standards would be supported by regional plans and stronger institutions, including information systems and compliance regimes.

If we had a set of environmental standards spelling out just what we need to protect and conserve, and knew that the environment minister was a) required by law to take decisions reflecting these standards and b) properly supported in taking those decisions by well-designed and well-funded systems, we could all sleep more easily.

But it’s not just the results that matter, but how we get there as well.

Professor Samuel’s other recommendations for restoring trust relate to efficiency, transparency and accountability in decision-making processes. He proposed:

  • Giving the community much more access to information, including Plain English guidance; opportunities to participate; access to information being considered; and routinely-given reasons for decisions.
  • A new and more influential set of statutory advisory committees, including an new and overarching Ecologically Sustainable Development (ESD) Committee to provide transparent policy advice to the minister on overall progress towards the outcomes set out in the standards
  • Adding ‘limited merits review’ (explained below) of development approvals to the existing broad standing of community groups to seek ‘judicial review’ in the courts (also explained below).

Judicial review, which is currently available for EPBC decisions, is the right to ask a court to overturn a decision, but only on the legalities — eg, that the minister failed to follow due process by not consulting everyone affected — and not on the merits, which concern the pros and cons of the final decision itself.

Merits review, often sought through a tribunal rather than a court, but not currently available for the most significant EPBC decisions, would get down to the pros and cons of the decision. Samuel’s ‘limits’ to this kind of review include confining merits review to decisions that have material environmental impacts and good prospects of success.

This is designed minimise review of minor decisions, or those that lack merit and promote delay.

For constitutional reasons Samuel could not simply recommend that the Parliament block all delaying actions by prohibiting access to the courts.

Will the cooks follow the recipe?

You have no doubt guessed from my description of Professor Samuel’s recommendations as involving ‘five transformations’ that I think his approach is ground-breaking.

As he himself hinted, the switch to a standards-based decision-making alone is transformative.

In this context, his further recommendations for increased transparency and accountability are icing on the reform cake. That’s not to say they are not important or long overdue.

But will the government go down this track? We’ll know very soon.

I think they will go for the general approach. However, the devil will be in the detail, especially in the detail of the standards.

The Morrison government pretended to start down the Samuel track by proposing an initial set of draft standards that simply repeated various process-based requirements from the existing EPBC Act. These ‘standards’ added nothing to existing rules and so would not have changed decisions. It was an attempt to pull the wool over our eyes.

If the standards-based approach is to work, it is essential that they spell out, in unqualified detail, exactly how much of the ‘matters of national environmental significance’ we must protect and conserve, if we are to maintain quality of life for ourselves and for future generations.

This will not be easy to do — hopefully our ecologists are up for the job!

We’ll also need some good lawyers — it is essential that the standards contain no ‘weasel words’, as Professor Samuel likes to say.

At the end of the day, people will only trust environmental laws that truly protect and conserve the environment. Transparency and accountability are important, but cannot carry the day by themselves.

Banner image: Trust makes the world go round. If the government wants trust restored in its national environmental law it’ll need to ensure it is efficient, transparent, accountable, but most importantly, that it delivers real outcomes. (Image by Tahlia Stanton from Pixabay)

Laying new foundations for environmental decisions: the fourth transformation

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By Peter Burnett

My recent blogs have argued that there are five transformations implicit in Professor Graeme Samuel’s review of national environmental law*, to which the Albanese government will respond in early December.

The first three transformations were to:

  • pursue pre-defined environmental outcomes rather than simply following legal process
  • take Indigenous knowledge and values seriously
  • simplify the processes of environmental regulation and harmonise regulatory outcomes between federal and state systems.

This blog concerns the fourth transformation, which is to lay new foundations for quality environmental decisions.

Money is the root of all … problems

One of the biggest problems with the EPBC Act is that it is a ‘jumbo jet’ of an Act run on a budget fit for a propeller-driven plane.

It has been like that during most of the 20+ years in which the Act has operated.

The original problem was that the environment minister behind the Act, Senator Robert Hill, pulled off something of a coup in getting the EPBC reforms through Cabinet and the Parliament. Many of Hill’s colleagues would likely have opposed the Bill if they had fully understood its scope and power.

As good as he was, Hill was not a magician and scoring a bucket of ‘new’ money to operate a new law with a much wider scope than the laws it replaced was a bridge too far.

The EPBC Act has had some particular financial ups and downs.

In 2007, after the Auditor-General criticised the poor implementation of provisions for protecting and conserving threatened species, the Act received a healthy injection of funds.

On the other hand, over the period 2013-2022, and especially following the notorious Abbott/Hockey ‘horror budget’ of 2014, resources for the environment portfolio, including the EPBC Act, were cut by around 40%.

The new Albanese government has just put some money back in, but it has started from a very low base. The Act remains significantly under-resourced.

Every Act has its consequences (or not) …

The consequences of this long-term underfunding, compounded in some cases by lack of political vision or will, are that many of the foundations of the current system of protection and conservation provided for by the EPBC Act are either significantly under-done, or not done at all.

Three of the most important identified by Professor Samuel were environmental information, compliance and enforcement, and environmental planning.

He described the collection of data and information as ‘fragmented and disparate’, while compliance and enforcement had been ‘limited’ and lacked transparency.

As for planning, while the Act includes a full suite of planning provisions, Samuel found that these provisions had yielded only piecemeal approaches and ad hoc efforts at coordinated national action.

For example, ‘bioregional plans’ prepared for four of Australia’s marine bioregions have never been updated, while no bioregional plans had been prepared for any of Australia’s 89 terrestrial bioregions.

In many respects such ‘under-institutionalisation’ is a perennial problem in Australian environmental policy. So perennial in fact that (ANU) environmental policy expert Professor Steve Dovers even had a name for it: ‘policy ad-hocery and amnesia’.

Of course, this doesn’t excuse such failures.

Samuel’s fix

As we’ve seen, Professor Samuel’s proposed fix is built around the new concept of national environmental standards.

If we are to avoid the ‘on paper, but not in practice’ problem of the current law, the standards will need to be complemented by a range of supporting institutions. Samuel made a number of recommendations in that vein, including:

  • Extending the concept of national standards beyond on-ground environmental outcomes, to deal with requirements for transparent processes and robust decision-making, including environmental data and information; and compliance and enforcement
  • A national data supply chain, managed by a supply chain ‘Custodian’, guided by a strategic plan and supported by adequate investment in new information systems
  • Independent compliance powers for the environment department, with increased transparency and accountability; and adequate resources
  • A new set of planning tools which emphasise strategic approaches at national and regional levels

To go beyond regulation and encourage investment in restoration, Samuel also recommended establishing a central Trust to coordinate public and private investment. While he didn’t mention money every time he made a recommendation, there is a clear sense in his report that none of this will work unless properly funded.

Over to you Tanya

Although environment minister, Tanya Plibersek has spoken positively about implementing the Samuel reforms, there remains a significant risk that this government will repeat the mistake of the Howard government by enacting laws that are strong on paper but weak in practice.

Putting a stop to the long-term decline of Australia’s environment will take a political courage, persistence and (last but not least) major investment.

It is notoriously difficult to obtain ‘new’ money in a government Budget. The lion’s share of expenditure is already baked-in and there are many competing commands for any remaining Budget ‘headroom’.

Plibersek is about to announce the government’s design for the next generation of environmental regulation. Even if it looks very different to the EPBC Jumbo, I’m guessing the design will still be in same ‘heavy lift’ Jumbo Jet class.

But will there be provision to fill the fuel-tanks and a hire a full complement of crew?

* Independent Review of the Environment Protection and Biodiversity Conservation (EPBC) Act, 2020.

Banner image: Australia’s national environmental law was sold to us as a ‘jumbo jet’ set of protections… but then they only provided enough funds to run a propellor driven plane.
(Image by Anja from Pixabay)

It’s ‘business as usual’, but at least there actually is plenty of business

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Senate Budget Estimates on the environment, November 2022

By Peter Burnett

Australia’s environment department has been run down over the past decade. I’m pleased to see from this month’s Estimate hearings that it’s getting extra resources. What does that mean? Let’s consider two areas, biodiversity and Indigenous heritage.

2022 is unusual in that the new Labor government has handed down a Budget, even though the previous government had already tabled the ‘normal’ Budget in March. The main objective for this extra October Budget was to fund election commitments and to de-fund programs from the former government that Labor did not support. Larger reforms have been held off until the next (normal) Budget, due in May 2023.

Some funding was redirected from old to new programs. For example, most of the money from the old ‘single touch approvals’ program, under which the former government wanted to accredit States to take environmental approval decisions under the Environment Protection and Biodiversity Conservation (EPBC) Act, was redirected into reforming the Act itself, in response to the Samuel Review of 2020.

The environment department has been run down over the last ten years. It has lost core capabilities as well as programs. The budget put $275 million over four years into strengthening corporate areas of the department.

This sounds like dull stuff, but it bodes well for building capacity to get things done. However, it’s impossible to tell how close this amount goes to enabling the department to do things it needs to be doing, like putting boots on the ground to deliver programs.

Environment is such a big agency now — covering climate and energy as well as biodiversity, water and heritage, that it’s impossible to cover everything here. So, I’ve picked just two topics of interest for a closer look, biodiversity and Indigenous heritage.

Endangered possum ‘on notice’

To illustrate just how low is the base from which the government is starting in this area, take Senator Rice’s attempts over 9 successive years to pin the government down on a credible recovery plan for the critically endangered Leadbeater’s Possum, the faunal emblem of Victoria.

Senator Rice pointed out that a 1997 recovery plan for the possum had expired in 2002 — 20 years ago. A draft replacement plan had not been sent to the Victorian government for comment until 2019; moreover, it remains a draft.

Officials assured Senator Rice that things had changed under the new government and that ‘we’ve really been asked to give this priority’. Unfortunately, however, the Threatened Species Scientific Committee had identified the need for further research as to exclusion zones for possums in forestry areas.

Apparently, funding had been identified and ‘we’d expect that the research would start quickly’. How long would it take? ‘We will be able to take on notice the exact timeframe’ said the official. ‘I’m not sure how long it needs to …’

Aargh! Leadbeater’s possum may be a particularly bad example, but it is by no means unique. Things are crook.

Modelling pathways to goals?

David Pocock is a new Independent Senator for the ACT. He displayed both a strong interest in environment and a good policy brain by asking about two government commitments, ‘no more species extinctions’ and its ‘30-by-30’ commitment (to have 30% of land and sea in reserve by 2030).

Had the government done its homework? Specifically, could the government deliver on these commitments with the $56 million p.a. it had allocated to threatened species, and the zero new funding it had allocated to the National Reserve System?

Senator Pocock pointed out that a recent academic study suggested that it would cost $1.7 billion p.a. just to save threatened species.

And another senator asked, had the government modelled the path to these goals?

‘Have you modelled this?’ has become something of an easy (but often valid) question in Estimates, asked mostly in relation to economic policies, but now it is being asked of environment policy.

For the record, no, the department had not modelled these outcomes.

The threatened species money was an election commitment — ie, the Labor Party came up with the amount while in Opposition, though we don’t know how, and Senators did not ask. So we remain in the dark about why $56 million p.a. is the right number.

On the 30 by 30, officials told the Committee that existing proposed reserves, including Indigenous Protected Areas, would get the government to 27%, leaving a 3% gap, unfunded but possibly met through no-cost additions, including Defence land (which, counter-intuitively, is often of high biodiversity quality) and State-owned land that they might be persuaded to place in reserve (presumably at their own cost of maintaining).

While modelling may not always be useful, we do need to move away from this kind of ‘a-wing-and-a-prayer’ approach.

Both major parties tend to announce modest yet very specific amounts for environment programs. The specificity implies that budgets have been carefully costed, while the modesty of the amounts involved often points to the opposite — that the calculations involved were probably based on a political calculus (‘this sounds credible’) rather than technical assessment of the costs of reaching the policy objective.

To be fair to the government, a target such as preventing threatened species loss can be delivered through multi-pronged approaches, including tighter regulation of development. Direct on-ground spending may be only one string to their bow.

The point remains however, that serious environmental policy needs to be taken more seriously than it is, and grounded in detailed strategy, fully and transparently costed.

Indigenous heritage

In 2020 Rio Tinto demolished, with state heritage approval, a 46,000-year-old Indigenous site at Juukan Gorge in the Pilbara. The site was probably of global cultural and archaeological significance. The outrage at this destruction was global; it was made worse by the fact that national safety net mechanisms to protect Indigenous heritage failed to trigger.

As part of its response to the resulting crisis, the previous government began a process of co-designing a new national First Nations’ cultural heritage regime.

The new government has allocated $14.7 million over the next four years to continue this process. Officials described an ongoing process of detailed consultation:

“It’s very much our intent to talk not only with bodies and representative bodies but actually with communities and community members in order to get feedback about, if we are going to have a structure or approach which potentially gives First Nations people and traditional owners a much greater role in decision-making about heritage protection, understanding their concerns and approaches around all of that.”

All of this is welcome, though decades overdue and prompted by an unmitigated and avoidable disaster.

As an indication of the long-term neglect of this area, one of the national safety net laws, enacted in 1984, was intended to be interim, and included that word in its title to make this clear. The Act was amended several years later — not to insert a permanent mechanism but to remove the word ‘interim’!

Also welcome is the attention the government is giving to include sites with significant Indigenous heritage values in its World Heritage program, with nominations under development for sites in Cape York, the West Kimberley, and Murujuga (also known as the Burrup Peninsula in the Pilbara, the site of over a million ancient petroglyphs of unknown origin.)

A small down payment

The Indigenous heritage processes in train are a rare example of good news in the environment portfolio.

On biodiversity, I think we could say that the new government has made a small down payment, but on a veritable mountain of environmental debt. The repayment schedule will be taxing and stretches out into the far distant future …

As to the rest, it’s a case of ‘watch this space’. Officials told Senators that the government was on track to announce its promised overhaul of national environmental law by Christmas and to legislate next year.

Here’s hoping the reforms are bold and innovative, because as Prince (now King) Charles has pointed out, we’ve been drinking in the Last Chance Saloon.

Banner image: “So, I see the Australian Government is back in the business of resourcing environmental management. I’ll believe it when I see the outcomes.” (Image by David Salt)

Simplicity, harmony and the third transformation

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By Peter Burnett

My recent blogs have argued that there are five transformations implicit in Professor Graeme Samuels review of national environmental law, to which the Albanese government is about to respond.* The first transformation was to be driven by environmental outcomes rather than processes, while the second was to take Indigenous knowledge and values seriously.

Today I write about the third transformation, which is to simplify the processes of environmental regulation and harmonise regulatory outcomes between federal and state systems.

No more picking cherries

Proposals for regulatory streamlining, and for the alignment of federal and state environmental assessment laws, have been floated at various times over the last 30 years. Yet this goal remains elusive. Most recently, the Morrison government tried to pass streamlining amendments to the EPBC Act, but failed in the Senate.

The problem with the former Prime Minister’s proposals was that he picked the cherries (as he would have seen them) from the reforms proposed by Professor Samuel and pushed the other reforms out into the never-never. One of the messages from the (previous) Senate was that a majority of Senators wanted action that was comprehensive, not piecemeal.

Morrison’s reforms were dressed up as streamlining; however, they were better described as a devolution of responsibility from the Commonwealth to the states. Vacating the field is not a solution to duplication (at least, not here).

To my observation, the former Prime Minister didn’t have an environmental bone in his body. I’m convinced that he wanted to achieve ‘single touch’ approvals by simply extracting the Federal government from environmental decision-making as far as possible, rather than by negotiating a genuine compatability of different systems.

Officially, maintenance of environmental standards was part of the deal. In practice, it was a hollow promise: Morrison’s initial set of draft ‘standards’ were just a collection of process-based words taken from the existing law. They would have guaranteed nothing in terms of outcomes.

Easy as 1, 2, 3 …

In contrast, Graeme Samuel recommended a harmonising of both environmental processes and outcomes between federal and state jurisdictions. This is a much more ambitious proposal, although it’s easy enough to summarise.

In effect, Samuel wants to transform not just federal environmental regulation, but state regulation as well. His template is easy as 1, 2, 3:

  1. Develop national standards for ecologically sustainable outcomes and give these standards shape locally through regional environmental plans
  2. Build a leading edge, risk-based decision-making system, including comprehensive environmental information, extensive policy guidance, streamlined processes and strong quality control
  3. Accredit states to take most of the decisions, which should be easy because everyone will be singing from the same song-sheet!

But in practice …

Step 2 is perhaps the easiest of a difficult bunch. With enough time and money, information systems can be built, processes automated, helpful policy guidance prepared, and so on. All this would speed up decision-making but alone it doesn’t remove duplication or guarantee improved environmental outcomes.

It’s the harmonised standards that holds the most potential. If the standards were sufficiently high to stop environmental decline and the environmental planning processes met the standards, the feds really could accredit the states and then drop back to a ‘trust but verify’ brief.

The major challenge lies with securing the necessary genuine federal-state partnership to deliver on this ambition. The underlying problem is that, constitutionally, Federal and state environmental responsibilities overlap and, with the possible exception of the Morrison proposals above, neither side wants to play second fiddle to the other.

At first glance, the states are responsible for managing the major components of the environment — land, water and air.

However, environmental problems have been recognised increasingly over the last 50 years as ubiquitous and broad-scale — often national, sometimes global. As the pioneering ecologist Barry Commoner put it in the 1970s, ‘everything’s connected to everything else.’

Federal responsibilities for international matters, along with the federal government’s ability to use non-environmental powers such as its power to regulate corporations, have enabled the Commonwealth to deal with concerns such as the extinction of species, by overlaying State land-management responsibilities with internationally- and nationally-driven policy imperatives.

In response, the states have pushed back against what they see as creeping federal control, and continue to do so.

Another problem is that although Samuel’s proposed national standards are, on their face, for federally-protected matters only, if the states were to sign up to them to secure federal accreditation, it would be hard for them to apply lower standards to the rest of the environment.

To adapt Alfred Deakin’s famous 1902 prophecy about Commonwealth dominance in fiscal matters, the states could find themselves, ‘legally free but environmentally bound to the chariot wheels of the central government’.

Hardly a recipe for success, is it?

Yet I think Samuel’s policy prescriptions are the right ones. The threats posed by environmental degradation operate at landscape, if not global, scale and are, ultimately, existential, as is becoming increasingly obvious as more and more ordinary Australians feel the impacts of extraordinary natural disasters.

And the solution is …

We simply have to find a way to unravel this impossibly-intricate Gordian knot of a problem. These problems are wicked enough without adding inconsistent and even conflicting regulation to the mix.

Tradition has it that Alexander the Great solved the problem by drawing his sword and cutting the knot. Might Tanya Plibersek turn out to be a modern Alexander?

Stay tuned for my own Alexander-like solution in a forthcoming blog.

* Independent Review of the Environment Protection and Biodiversity Conservation (EPBC) Act, 2020.

Banner image: So much complexity, so much variation in the manner in which the federal government and state governments regulate the environment. What would it take to wipe the slate clean and start afresh? (Image by David Salt)

Getting results: the first transformation of our national environmental law starts with ‘standards’

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By Peter Burnett

‘All that’s gold does not glitter’.

So opens the poem that Bilbo Baggins, a Hobbit, wrote to his cousin Frodo, the hero of Tolkien’s Lord of the Rings.

In my last blog I argued that, underlying the definitely non-glittering recommendations of the Samuel Review of Australia’s main national environmental law, the Environment Protection and Biodiversity Conservation (EPBC) Act, lay policy gold, a call for five major transformations in law and policy.

The first of these was to shift from a regulatory regime that was prescriptive and focussed on processes, to one built around the setting and pursuing of national environmental outcomes.

In doing so we would get away from our current ‘box-ticking’ approach to regulation, under which decision-makers (typically the environment minister) consider various factors such as biodiversity loss and the precautionary principle but, at the end of the day, decide pretty much anything they want to.

The main driver of this shift in Professor Samuel’s recommended reforms is the creation of statutory ‘national environmental standards.’

Standards both old and new

We are already used to environmental standards in dealing with certain issues. We have, for example, had standards for ambient air quality and contaminated site remediation for decades.

But we have gone down a different track with nature conservation. Early battles focused on saving precious places from development and indeed the environment movement in Australia was built on some of these, such as the (unsuccessful) fight to save Lake Pedder in the 1970s and the (successful) fight to save the Franklin River in the 1980s.

These were more battles of the heart than the head.

Things shifted in the 1990s. Under the banner of ‘sustainable development’, or, in Australia, ‘Ecologically Sustainable Development’ (ESD), we became more focused on conserving entire landscapes and ecosystems.

But we struggled to pin down exactly what we were trying to achieve. Unable to answer the question, ‘how much environment is enough?’, something we could have worked out if we had done enough science and environmental monitoring, we defaulted to a legalistic approach in which we asked decision-makers to ‘consider’ or ‘have regard to’ certain principles such as precaution or intergenerational equity.

The trouble with such principles is that they are too general to serve as standards and instead become ‘mandatory considerations’ in discretionary decision-making (ie, boxes to be ticked).

The only real limit on this discretion-based decision-making is the ability of the courts to strike down a truly egregious decision on grounds of ‘irrationally’.

The first transformation

Discretionary, bottom-up decision-making is no way to achieve a consistent and ecologically sustainable outcome. Professor Samuel therefore recommended flipping the system on its head: spell out what an ecologically sustainable environment looks like, partly through National Environmental Standards and partly through a comprehensive environmental planning regime, and then require that individual development decisions comply with these standards and plans.

Although transformative, this change seems straight-forward enough; why haven’t we been doing this all along?

One reason is ‘path dependency’. Because many conservation problems first emerged as place-based or issue-specific concerns, we started dealing with them on a reactive, case-by-case basis. This is how our system deals with most issues, environmental or otherwise. As such it was as comfortable as a pair of old slippers — and in we slipped.

Another reason is that we haven’t had the comprehensive environmental information or the deep ecological understanding we needed to draw a line between harm that ecosystems can absorb without losing their identity (resilience), and harm that they cannot absorb. We still can’t do that precisely, although technology and good science have brought us a long way.

More significantly, it is only now that most members of the political class, and indeed a majority in society, are coming to understand and accept that if we don’t act soon, it may be too late.

What would these standards look like?

If standards are central to halting environmental decline, what would they look like? Well, the devil is in the detail, but Professor Samuel included some draft standards in his report, so I’ll use elements of the threatened species standard to give you a brief taste.

In part, this draft standard just repeats some existing formulae, for example that approved developments should not be ‘inconsistent with’ relevant recovery plans.

On the other hand, it also introduces new requirements. One of these is that decisions must take cumulative impacts into account. Another is that decisions must avoid adverse impacts to critical habitat and ensure ‘no net reduction’ of critical habitat.

Note the use of the word ‘net’, which implies that environmental offsets could be used.

So, would they work?

My general view is that Samuel’s draft standards would deliver significant marginal gains, but are not worded tightly enough to halt further major environmental decline.

Just looking at the examples above, I think the following changes (and complementary measures) are needed to make the standard strong enough to halt decline:

  • it is not enough that developments ‘not be inconsistent with’ recovery plans — they need to comply with plans; moreover, the plans themselves must spell things out with much greater precision than existing plans, eg by mapping critical habitat to be protected
  • taking cumulative impacts into account is a significant advance, but doing so requires a major national exercise in gathering and maintaining environmental data over time
  • if a species is to recover, decision-makers must not approve impacts to critical habitat, rather than simply ‘avoiding’ them
  • further, if there is to be ‘no net reduction’ in critical habitat, then offset rules would have to be so stringent that I doubt whether they can be met in practice, which probably means that the word ‘net’ should go from this requirement.

And will standards become reality?

Having National Environmental Standards would be truly transformative for environmental decision-making and in my view they could indeed be policy gold, as long as we get the detail right.

By the same token, standards lack lustre for a reason. As you can see from these brief examples, formulating the right words of protection is not that hard. The real challenge is to build political support for the tough decisions that strong standards imply.

Banner image: Good clear environmental standards could provide a pathway to transform our national environmental law into something that makes a real difference. (Image by David Salt)

Five transformations: Breathing life into Australia’s national environmental law

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By Peter Burnett

I often write in these blogs about Australia’s national environmental law, the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). My excuse is that the EPBC Act is the most important environmental law in the country, but it doesn’t work. This is something we all should be worried about, and, as you’ve heard before, this is a piece of legislation that badly needs reform. Australia’s new federal government is making hopeful sounds here but, again as you’ve heard before, talk is cheap.

The job of reform is big, complex and challenging. However, if you reflect on the basic aims of what the EPBC Act was established to achieve, I think it’s possible to envisage a simple pathway forward. And that pathway involves five basic transformations on how the Act currently performs.

The story so far …

The new Australian government has promised to overhaul the EPBC Act and to establish a independent federal Environmental Protection Agency (EPA).

In pursuit of this reform, environment minister Tanya Plibersek has promised to respond to Professor Graeme Samuel’s 2020 review of the Act by the end of this year and to table proposed new laws in 2023.

Plibersek has hinted strongly that the government will follow Samuel’s recommendations, so that provides a clear starting point for discussion while we wait for the detail of the government’s plan.

From great green hope to great green flop

Looking back over the history of the EPBC Act — three years in development and 22 years in operation — it is clear that few of the high hopes held for the Act have been realised. While it expanded federal government involvement in environmental regulation significantly, the evidence suggests that the benefits of this have been marginal. Worse, when we look at the whole picture, the limited benefits achieved are partly offset by the resulting regulatory duplication.

The fundamental reason for this failure to deliver is not poor regulatory design, but gross under-implementation, mostly the result of under-resourcing and a lack of political will.

The EPBC Act can be seen as a three-legged stool on which most of one leg, dealing with environmental planning, is largely missing. (The other two legs protect the so-called ‘matters of national environmental significance’ and provide for environmental impact assessment.)

Most of the plans envisaged by the Act, and essential to its operational, are either vague in content, sitting unimplemented on the shelf, or simply not done.

Meanwhile, as Professor Samuel put it in his review, ‘Australia’s natural environment and iconic places are in an overall state of decline and are under increasing threat.’

What should we do about it?

The EPBC Act is highly complex. It is over 1,000 pages long and there are hundreds of pages of supporting regulations and determinations.

And the Act in turn sits within a complex set of roles, responsibilities, laws and agreements that govern the environment in Australia’s federal system.

Understanding the system is no mean thing, let alone fixing it. So, where to start?

When I went through Professor Samuel’s 38 recommendations, it struck me that he was calling for a complete transformation, in fact five of them. These are:

First, to change from prescriptive regulatory processes to setting and pursuing national environmental outcomes

  • the EPBC Act (and its state counterparts) focus on following due process, a ‘box ticking’ exercise that requires consideration of various factors such as biodiversity loss and the precautionary principle but, at the end of the day, allows governments to decide pretty much anything they like

Second, to shift from Indigenous tokenism to full use of Indigenous knowledge and a full recognition of Indigenous values

  • Samuel was highly critical of the tokenism of current arrangements, while recent events, especially the Juukan Gorge disaster in 2020, have generated considerable impetus for change

Third, to simplify regulatory processes and harmonise environmental processes and outcomes between federal and state jurisdictions

  • this isn’t just about ‘streamlining’ which has become almost a cliché, but a call for harmonisation of processes and outcomes across the nation

Fourth, to lay new foundations for quality decision-making

  • many of the foundations of the current system are either significantly under-done (eg environmental information, compliance and enforcement) or not done at all (eg bioregional planning across the continent)

Fifth, to restore trust in decision-making

  • damningly, Samuel found that none of the key stakeholder groups — business, environment groups and the wider community — trusted the current arrangements.

The reform process going forward

I’ll take a closer look at each transformation in a series of blogs over the next two months, in the lead up to Tanya Plibersek’s response to Samuel.

The reform debate will last right through 2023 and into 2024, as, once the response is on the table, there’s a large reform Bill to draft and an extended Parliamentary process to navigate as Plibersek seeks to shepherd her reforms through a Senate in which the balance of power, for the first time, lies with a cross-bench that is tinged a fairly dark shade of green.

Among other things, she will have to deal with very strong pressure to extend the EPBC Act by including a ‘climate trigger’.

My aim in the lead-up to that debate is to offer some points of focus in a discussion that always risks getting lost in its own complexity. (If you prefer to watch rather than read, I presented these transformations in a Parliamentary Library Seminar on 30 August.)

The problem is enormous and policy ambition needs to be high — bring on the reform!

Banner image: The job of reform is big, complex and challenging. However, it’s possible to envisage a simple pathway forward involving five basic transformations. (Image by David Salt)

Game of Sustainability – Episode One: A New Hope

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By Peter Burnett

This is another in our series on the environmental policies of previous Australian Governments. This time, the policy story is too long for a single blog …

In my last blog in this series I told the story of how the Hawke government started with an environmental bang in 1983 by blocking Tasmania’s Franklin Dam project. It did this by passing laws to protect the World Heritage status of the surrounding wilderness.

By taking this unprecedented action, Hawke dramatically expanded federal environmental power through the High Court decision in the Tasmanian Dam Case. After that, Hawke pretty much lost interest in the environment.

Until, that is, the 1987 election was in the offing.

The second wave

There was a second global wave of environmental concern in the mid 1980s (the first wave was in the late 1960s and early 1970s).

In 1984, the worst industrial disaster in world history, a chemical accident at Union Carbide’s Bhopal factory in India killed more than 22,000 people.

Then in 1986 there was a nuclear accident at the Chernobyl nuclear power station in the Soviet Union (now in modern-day Ukraine). The casualties were much lower than Bhopal (the death toll will eventually reach around 4,000 when long-term injuries are included) but the accident forced the resettlement of some 350,000 people and released a radioactive cloud that gave the world, and Europeans in particular, enormous concern.

The resulting wave of environmental concern swept around the world. And it affected Australia as well, although the issues here played out more through a revival in anti-development sentiment, again played out in several instances through World Heritage nominations.

Environmental revival in politics

All this led the Hawke Government to run hard on environmental issues in the lead up to the 1987 election. Labor made campaign commitments about environmentally-significant areas such as Kakadu Stage II; in return the environment movement had advocated a vote for Labor.

Graham Richardson, an influential party fixer, was instrumental in this political deal-making. His reward after Labor won the election was not just promotion to the ministry as Environment Minister, but the elevation of the environment portfolio to cabinet.

Suddenly the environment was at the centre of Australian policy-making.

Let the games begin …

Yet there was more to this second wave than a return to prominence of environmental issues. The whole debate was about to shift from a case-by-case approach (revolving around ‘places of the heart’) to one based on joined up, but complex and contested, policy principles.

Just after the election, the United Nations released a major report, Our Common Future, also known as the Brundtland Report. This is the report that put Sustainable Development on the map.

Brundtland argued that countries should pursue Sustainable Development as ‘development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs’.

This deceptively simple idea captured imaginations around the world. Within five years, at the Rio Earth Summit in 1992, Sustainable Development would become the phrase on everyone’s lips and the foundation stone for Agenda 21, an action plan endorsed by almost every country and major stakeholder group in the world.

Meanwhile, back home …

Even though Australia was part of this global phenomenon, things played out differently at home during the five years between the publication of Our Common Future through to the Rio Earth Summit.

Richardson rejected early advice from his department to take the Brundtland Report to Cabinet for a discussion of its policy implications. He was a political hardhead and hardly a policy nerd — presumably he wanted to stick with the simple ‘case-by-case’ political appeal of World Heritage listings, rather than explore the rabbit warrens of a policy concept like Sustainable Development.

However, ministers with economic portfolios were deeply frustrated by Richardson’s ‘one-off forays’, or ‘icons’ approach as they called it (an icons approach only worries about the iconic bits of nature, the special rainforests and coral reefs, for example).

Richardson had the reputation of stitching up deals on popular environmental causes with Prime Minister Hawke in advance of Cabinet meetings, with the result (as they saw it) that well-developed proposals for economic development would be torpedoed by the latest popular environmental cause. Economic ministers wanted some rules to play by.

Primary Industries Minister John Kerin led a Cabinet revolt. He first took his frustrations to Cabinet at the end of 1987, arguing that existing processes for considering conservation and development proposals were characterised by a lack of consistency and frequent requirements for:

eleventh hour ad hoc responses to proposals … (both within and outside Governments), minimal recognition of the multiple objectives involved in resource allocation decisions and a propensity for parties to seek ‘winner take all outcomes’ without understanding economic, social or environmental consequences.*

Round one to rationality … sort of

Round one went to Kerin and the economic ministers. Sort of. The government announced in late 1988 that it would establish a Resource Assessment Commission (RAC) to assess major environment and development issues. However, while the advice of the RAC was to be based on three legislated principles, dealing with policy integration, optimising benefits and sequential use of land, this was not ‘Sustainable Development’ as was being discussed elsewhere around the world.

In fact, in a process later described by Richardson as ‘long and difficult’, officials had come up with no less than forty five principles related to environment and development, covering everything from ‘maintaining essential ecological processes and life support systems’ (spot-on) through ‘development and environmental considerations should be taken into account … early’ (relevant) to ‘rights of interested parties … in the decision-making process should be made clear and adequately publicised’ (marginal)!

In other words, although Sustainable Development had been on the table for more than a year, the Australian government had yet to engage with it properly.

All this would change the following year, 1989.

Watch this space for the next exciting episode in this ‘Game of Sustainability!’

*John C Kerin (2017). The Way I Saw It; the Way It Was: The Making of National Agricultural and Natural Resource Management Policy (Analysis and Policy Observatory)

Banner image: What is ‘sustainable development’? Is it protecting the best bits of nature? Is it the right to clean water and safe food for everyone? Or is it living in a way that doesn’t limit the choices of future generations? The debate on what sustainable development meant was raging towards the end of the 1980s; and in Australia it took on its own unique direction. (Image by David Salt)

Should we include a climate-change trigger in national environmental law?

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By Peter Burnett

In Australia this week, all eyes (well most of them) are on Canberra for the first sitting of Parliament since Labor came to power in May. The first order of business is the promised Climate Change Bill, to enshrine the government’s promised 43% target.

While public debate on the bill has focused on the target itself and the nature of a possible ‘ratcheting mechanism’ to raise the target over time, there’s also been quite a bit of attention given to something that definitely won’t be included: a ‘climate trigger’ for environmental approval of large projects such as mines and dams.

Let me explain.

Triggering the EPBC Act

For constitutional reasons, our main national environmental law, the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), is based on a set of ‘triggers’. These are formally known as ‘matters of national environmental significance’. The triggers cover various things you’d expect to be of national significance, such as impacts to World Heritage places and threatened species, but not the most obvious candidate of all, climate change.

The EPBC Act was drafted by the conservative Howard Coalition government in the late 1990s as part of an overhaul of national environmental law. This bold reform was an unlikely project for a conservative government, but came about for two reasons.

First, Howard had courted the environment movement quite successfully in the 1996 election campaign, largely by promising a large pot of money (the National Heritage Trust) in exchange for privatising the national phone company, Telstra. There was a sentiment at the time that perhaps conservatives could care for the environment as well as progressives, by investing in it.

Second, Howard’s environment minister, Senator Robert Hill, was not just a skilled political operator, but a genuine environmental reformer (though perhaps a flawed one — see below).

In particular, Hill demonstrated an ability to navigate obstacles in government where others would have foundered on the political rocks.

Kyoto and the climate trigger

Despite Hill’s commitment to reforming environmental law he also led the Howard Government’s negotiating team at Kyoto, securing the notorious ‘Australia clause’, under which Australia was allowed to increase its emissions to 108% of 1990 levels, despite other rich countries being locked-into cuts.

Beyond this, also notoriously, Howard refused to ratify the Kyoto Protocol, despite Australia’s easy ride through with the Australia clause.

Howard had a real thing about action on climate change. Despite Australia’s easy ride, early on his major concern seemed to be that Australia might be taken for a ride, by being required to do more than its fair share of the ‘heavy lifting’. Later on, he seemed determined to hold out on ratification as a way of supporting the USA under George W Bush.

You can see why, despite being the most obvious candidate, climate was never going to be a trigger in the EPBC Act. Unfortunately for the government though, it had to do a deal with a minor party, the Australian Democrats, to get the EPBC Bill through the Senate.

Howard agreed to more than 400 Democrat amendments to secure passage, but wouldn’t include a climate trigger.

A climate trigger discussion paper

The government did however agree to consult about including a climate trigger by later amendment, and released a discussion paper on the topic at the end of 1999.

An obvious issue was the emissions threshold for the trigger. The lowest number discussed was 500,000 tonnes CO2-equivalent. This was said to capture 92% of emissions from new major facilities, such as power stations and aluminium smelters, then under construction.

Interestingly, today’s ‘safeguard mechanism’, enacted by the Abbott Government to support its Emissions Reduction Fund and requiring large emitters (currently 215 of them) to meet an individually-tailored emissions cap, has a threshold of 100,000 tonnes.

Even more interestingly, while the discussion paper canvassed some of the more technical issues associated with defining the trigger in some detail, such as whether emission estimates would be based on average or peak capacity, it completely avoided the significant issue of what kinds of requirements might be imposed on a new facility once the trigger was, well, triggered.

The discussion paper said this was because approval decisions had to be consistent with the principles of ecologically sustainable development and should take account of issues such as jobs and international competitiveness. (Had they addressed the issue, I think the most likely approach at the time would have been to require that the proponent use ‘best available low-emission technology at reasonable cost’.)

Then there was the issue of carbon emissions from land clearing. The discussion paper simply excluded this topic; the implication was that land clearing was not a ‘project’.

I think this explanation and exclusion are tendentious. I suspect that the government never intended to introduce a trigger, but simply to go through the motions. In that context, any content beyond the barest minimum could expose the government to enemy political fire, for no gain (to them).

Back to the future

So, there we have it. No climate trigger. But should we have one now?

Labor is promising to re-orient the safeguard mechanism, under which emissions from the major facilities are capped.

The previous government kept resetting the caps, giving emitters an easy ride in meeting them. Now, the government will lower the caps progressively, as the theory says such a scheme should, forcing facilities to lower emissions or buy emissions credits.

Under that scenario, it doesn’t make much sense to apply a climate trigger to major facilities — anyone building such a facility already knows that its emissions will be subject to a reducing cap.

Even if a climate trigger applied, what conditions could the environment minister impose that would achieve more than keeping emissions under a reducing cap? (In theory, a trigger would allow the minister to block a project entirely, this seems unlikely).

What about land-clearing?

Then there’s land clearing. Although the significance of land clearing is usually seen in terms of habitat loss, it is also significant for carbon emissions where the vegetation concerned is of high quality (low quality regrowth areas are marginal in terms of carbon emissions).

At present there is no land clearing trigger in the EPBC Act, even for biodiversity-related reasons. And, unlike industrial facilities, there are no climate-related laws applying to land clearing.

Thus, above a certain extent and quality, there is a case for a climate trigger relating to land clearing.

However, states and territories all regulate land clearing for other reasons. Due to the complexities of doubling-up on land regulation, it might be more effective to combine a trigger with a national standard for land clearing and to switch off the trigger in states where clearing laws meet the standard.

And in the end?

At the end of the day, given Labor’s plans for the safeguard mechanism, the case for a ‘climate trigger’ is particular rather than general. It would make sense for the clearing of significant areas of land containing old-growth and other high quality vegetation, but that’s about all.

In any event, a climate trigger is off the agenda as an amendment to the Climate Change Bill, given climate minister Chris Bowen’s statement that the government would rather pursue its climate target on a non-statutory basis, than have policy change forced on it by legislative amendment.

But there will be a second opportunity, when environment minister Tanya Plibersek delivers on her commitment to introduce major reforms to the EPBC Act in 2023.

Then, unlike now, the government won’t have the clean option of simply walking away, because so much of the non-climate environmental reform agenda hangs off that reform.

Banner image by Yazril Tri Mulyana from Pixabay

Lies, damned lies and … Environmental Economics?

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A single LNG development in Australia could raise the global temperature by a tiny amount. Should it be allowed? What has the ‘economics of substitution’ got to do with it?

By Peter Burnett

People frustrated by weak government responses to the Paris Agreement (with its goal of limiting global warming to ‘well below’ 2° Celsius and ‘pursuing efforts’ to achieve 1.5°’), continue to look for ways to pressure governments for stronger action. One strategy is to challenge fossil fuel developments in court.

In the latest Australian challenge, the Australian Conservation Foundation (ACF) is challenging the federal approval given to Woodside Energy’s $16 billion Scarborough liquefied natural gas (LNG) project, off the Pilbara coast in Western Australia.

The formal basis for the challenge is, in essence, that Woodside obtained approval from the wrong federal regulator. Beyond that, it gets complicated. But it’s worth considering the details here because there are some very important principles at play.

Offshore Approvals and the Reef ‘carve-out’

Under Australia’s national environmental law, the Environment Protection and Biodiversity Conservation Act (EPBC Act) the federal environment minister would normally need to approve major developments such as Scarborough. However, in 2014, then environment minister Greg Hunt switched off this requirement for offshore projects by, in effect, accrediting the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to approve projects in his stead.

The basis for NOPSEMA’s accreditation is that its regulatory regime was assessed as meeting the requirements of the EPBC Act. But the accreditation had several ‘carve-outs’, including for projects likely to have a significant impact on the Great Barrier Reef (GBR). In other words, if a major offshore project was likely to have an impact on the GBR, then NOPSEMA could not approve it and the task but would revert to the minister for the environment.

ACF’s claim is that even though Scarborough is off WA, its total greenhouse gas emissions, especially the ‘scope 3’ emissions generated when the gas is burnt by overseas customers, will be so large that as to have a significant impact on the GBR, even though it lies on the other side of the country.

If the ACF win the case, this would trigger the carve-out and bounce the project back to Australia’s new environment minister Tanya Plibersek for a fresh approval process, something that could take years (which could well scuttle the proposal).

Overheating

An analysis by Climate Analytics found that the total emissions from the Scarborough project were just under 1.4 billion tonnes, three times Australia’s annual emissions. ACF argues that this will result in 0.000394 degrees of additional global warming that will harm the Reef.

Woodside may counter that this is not a significant impact, even on the back of existing emissions-driven climate change.

Is an extra 4 x 10,000ths of a degree significant? I think there is a good argument that when the GBR is already at a critical point, every additional measurable impact on the whole reef is significant. Keep in mind this is a single development which, by itself, has the capacity to create a measurable global temperature increase (at a time when the world is already overheating).

A second likely defence argument will be that 1.4 billion tonnes is a gross figure, which would be offset significantly, if not completely, by various factors, including that gas from Scarborough, relatively low in carbon intensity, will displace other fossil fuels with significantly higher carbon intensity. This is the ‘market substitution’ argument.

We have been here before. In 2015, environment minister Greg Hunt used a similar argument in successfully defeating ACF’s challenge to Adani’s huge Carmichael coal mine in Queensland. The Federal Court upheld the minister’s decision at both first instance and on appeal.

So, if this argument has failed before, why run it again?

Will the market substitution argument prevail?

The basic argument may be the same, but the legal context is different, notwithstanding that both cases concern the application of the EPBC Act. In the Carmichael case, the relevant arguments revolved around the meaning of certain words in the Act, including ‘relevant impact’.

However, the appeal judges did say that their decision was made on the basis of the particular arguments which ACF had put; they dropped a hint that a different argument might have led to a different result. With so much at stake, this alone is enough to make one think it was worth having another go at the market substitution argument.

I don’t know what arguments ACF and their lawyers have in mind this time around, but the Scarborough case turns on some different legislative words, especially on what is a ‘significant’ impact, as distinct from the meaning of ‘impact’ itself.

In this slightly changed context, I think the economic substitution argument could be attacked from a different angle to the one used in Carmichael. It goes like this:

If the total emissions from the Scarborough project, including scope 3 emissions, are ‘likely to have a significant impact’ on the GBR, the current approval from NOPSEMA is invalid and Woodside must refer the project afresh to Minister Plibersek.

Notwithstanding that significance must be decided on the basis of a likely net, rather than gross emission increase; the likelihood is that each of the factors said to offset the gross impact does not, on balance, reduce the gross figure significantly, for the following reasons.

Even if gas from Scarborough has a much lower carbon content than the fuel currently consumed by Scarborough’s customers, it is not enough to find that this low carbon gas would displace high carbon fuel for these customers. Rather, to achieve a net reduction, the high carbon fuel must be displaced from the entire market — ie, it must be likely that it will be left in the ground.

This is because, prima facie, if supplies of a fossil fuel are displaced by an alternative, basic economics (the principle that markets ‘clear’) suggests that the displaced fuel will be sold elsewhere, even if this requires a price reduction. This is especially true given that the global market for fossil fuels continues to grow, despite a Covid19-induced dip.

Then there is the policy argument, that because many countries have adopted Paris targets such as ‘net zero by 2050’, emissions from Scarborough will be offset by reductions that are driven by these targets.

Even if countries delivered on such targets in full and the 1.5° goal were achieved, the reef would still be under significant threat and Scarborough would still exacerbate that threat.

However, countries are not on a global trajectory for anything like 1.5°, so the backdrop to Scarborough’s impact is closer to a 3° increase. Worse, many countries have a history of promising more than they deliver, in some cases adopting targets that are little more than aspirations.

Finally, there is the argument that technological change will drive major emissions reduction through the shift to renewables. This is valid in some countries, but, globally, the renewables shift is more than offset by global increases in demand: otherwise, global emissions would not continue to rise.

At the end of the day, unless there is evidence that gas from Scarborough is leading directly to high-carbon fuels being left in the ground, the supposed offsets look rather vague at best, leaving it likely that Scarborough’s net emissions will be similar to its gross emissions.

Where are we headed with this?

I wouldn’t like to predict where the Federal Court will land, but I do think it is possible that the market substitution argument, at least under the EPBC Act, will prove to make little difference.*

If I were the federal government I would deal with cases like this by moving quickly to legislate a comprehensive climate policy regime, not to mention a wider and contemporary environment protection regime as recommended by the 2020 Samuel Review.

I would be thinking that it is better for governments to get on the front foot rather than risk the unpredictable results that can follow when people are driven to litigation by their frustration with outdated or missing laws.

*I know the argument has been rejected by the Land and Environment Court in NSW in the Gloucester Resources case (Rocky Hill). But the Court there had the power to review the decision on the merits, which makes a big difference, for reasons too complicated to explain here.

Banner image: New research shows global warming of 1.5°C relative to pre-industrial levels will be catastrophic for almost all coral reefs – including those once thought of as refuges. Should any new fossil fuel developments be approved in such a time? (Image by Maria Beger)