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

Did farmers do the ‘heavy lifting’ under Kyoto?

Did anyone?

By Peter Burnett

My ears pricked up last week when I heard Michael McCormack, Deputy Prime Minister and leader of the National Party, say that farmers should be exempt from any commitment Australia might make to a Net Zero by 2050 emissions target because farmers had done the heavy lifting under Kyoto.

My ears were not to deceiving me because the Agriculture Minister, David Littleproud, would soon repeat the comment (Regional Australia ‘should not pay bill for climate target‘).

Australia’s Kyoto policies

This struck me as passing strange, since I had been researching the Howard Government’s Kyoto policies, which were based on a principle of ‘no regrets’ – ie, that policies to abate emissions of greenhouse gases should not place a significant burden on the economy, the budget or key stakeholders.

And farmers are certainly key stakeholders.

Over time, this ‘no regrets’ principle started to fray at the edges. First, the government enacted a Mandatory Renewable Energy Target (MRET) in 2000. And in 2004, it committed a non-trivial $700 million for emissions reduction programs, although the lion’s share of this was aimed at fossil fuel industries, who were key government supporters.

Finally, in 2006, the government announced a domestic Australian cap-and-trade emissions trading scheme to be established by 2012, although it lost office before the scheme was fully developed.

Anyhow, the point is that even though the Howard Government did start to move away from ‘no regrets’ as public opinion shifted, at no time did any of their Kyoto- or climate-badged policies place any significant obligations on farmers (or on anyone for that matter).

They were some programs aimed at supporting farmers to take voluntary action, such as the Farm Forestry Program, which sought to encourage the incorporation of commercial tree growing and management into farming systems, but of course these don’t count as burdens.

So, if there were no Kyoto regrets, might ministers McCormack and Littleproud been thinking of something else?

Maybe the heavy lifting was for the EPBC Act?

Perhaps they were thinking of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act)? Many farmers were outraged in 2001 when Environment Minister Robert Hill listed the Brigalow Ecological Community in Queensland as endangered. This meant that a farmer could not clear a significant area in brigalow country without an approval under the EPBC Act.

In practice, however, very few farmers seek land clearing approvals under the EPBC Act. Between the commencement of the Act in July 2000 and July 2008 (ie, early in the first Kyoto commitment period) the EPBC Act was only applied to 10 agricultural-related land clearing projects involving the removal of 6,200 ha of vegetation, constituting less than 0.2% of total national land clearing over the period (Macintosh 2009).

In any event, the EPBC protects biodiversity, not the climate.

Perhaps they were thinking of state land clearing laws? Certainly, several states did pass land-clearing laws in the 1990s. The most significant states here are Queensland and New South Wales, because that is where most of Australia’s land clearing was occurring at the time.

New South Wales began to limit the land clearing in a significant way in 1995, initially by policy and then by law, passing the Native Vegetation Conservation Act in 1997 and replacing this with the Native Vegetation Act 2003.

Land Clearing in Queensland in the First Kyoto Commitment Period

Queensland also began to restrict land clearing in 1995, enacting the Vegetation Management Act in 1999 and introducing a new regime in 2003-2004 with the aim of ending broad-scale land clearing by 2006. This new regime was apparently extremely effective, so, as a case study, it is the more interesting of the two states.

Andrew Macintosh from ANU has explained that when the Queensland reforms of 1999 and 2003-2004 were introduced, the Australian Government was engaged in negotiations with Queensland over the design of the laws and financial assistance for affected landholders.*

These negotiations were acrimonious and failed. As a result, the 1999 laws were watered-down and their commencement delayed, and there was no financial assistance, federal or state.

In fact, the Australian Government wasn’t just negotiating with Queensland, but with all states and territories. And its objective, at least on the surface, was not to support Kyoto but to strengthen the National Strategy for the Conservation of Australia’s Biodiversity, which had just received a poor review.

But back to Queensland, which rolled out a $150 million package to support the 2003-2004 laws. Macintosh found that while this helped farmers, it by no means eliminated their opposition and there were ongoing complaints about the scheme in operation.

Interestingly, Macintosh interviewed Peter Beattie about the Queensland scheme some years later. Mr Beattie, who was Queensland Premier at the time, said that there was little doubt the laws would have been introduced irrespective of concerns about climate change.**

Apparently it’s the same story with New South Wales; the laws made no mention of climate change and it was not raised as a significant issue when the laws were being designed.**

Who’s been doing the heavy lifting?

So, did farmers do the heavy lifting under Kyoto? The answer is ‘no’, because nobody did any heavy lifting under Kyoto. It is certainly true however that environmental laws have had an impact on farmers and that this has been the cause of considerable grief over the years, although sometimes affected farmers have been compensated.

The underlying and more difficult question is whether it is fair to curtail or even prevent land clearing, in the interests of protecting and conserving the environment?

For my own part, although I would not acknowledge an absolute right to clear land, as some farmers claim, I do argue that environmental laws are for the benefit of all. As a result, where they have a disproportionate impact, for example by removing from farmers a right to clear land, I believe we should spread the burden of those impacts across the entire community.

This might mean that we should be making structural adjustment payments to some farmers.

Or perhaps we should pay them for ecosystem services from their properties.

In that regard, the government is currently developing (again)*** trials for an Environmental Stewardship Program. If the trials are successful, we may see farmers being paid to protect or restore biodiversity on an ongoing basis.

In my view this would be a welcome development.

*Andrew Macintosh, ‘the Australia clause and REDD: a cautionary tale’, Climatic Change, 2012, Volume 112, Issue 2.

** Andrew Macintosh, ‘Mitigation Targets, Burden Sharing and the Role of Economic Modelling in Climate Policy’, (2014) Australian Journal of Public Administration, Volume 73 No 2.

*** An earlier Environment Stewardship Program was closed down.

Image by Alistair McLellan from Pixabay

2020 hindsight – insights on government thinking from 20 years ago

1998 and 1999 were important years for environmental policy in Australia

By Peter Burnett

As policy researcher, I love New Year’s Day. Not because it’s a public holiday but because it’s when the National Archives of Australia release government records, including Cabinet papers, from several decades earlier. Documents used to be released after 30 years but, under a Rudd Government reform, this is being reduced progressively to 20 years. And this is great for anyone seeking deeper insights into how policies are conceived and developed.

This year Archives released documents from 1998 and 1999. I’ve been looking at the Cabinet submissions and decisions from these two years to see what environmental issues were preoccupying the first and second Howard Cabinets (there was an election in 1998).

At least, I’ve been looking at the ones that are available. Even though there are only a few hundred cabinet documents prepared each year, and their annual release is of significant media interest, Archives actually only release the ones that their history adviser regards as newsworthy. Most of the others are available on application, but you have to wait, sometimes for many months, for these files to be ‘examined’, to decide whether they contain any exempt material, usually related to national security.

The need to apply for files and then wait for some months has limited what I can write about one of the major issues, as you’ll see below. Such are the frustrations of anyone seeking insight from the official records.

What were the issues in 1998–99?

The final years of last century were very important for environmental policy, nationally and around the world.

Internationally the Kyoto Protocol had been concluded at the end of the previous year, with Australia securing a special deal, sometimes called the Australia Clause. This allowed us to increase our emissions by 8% on 1990 levels in the coming decade, when other developed countries had committed to a 5% reduction.

We had based our case on the principle of ‘common but differentiated responsibilities’, a principle developed originally to accommodate the circumstances of developing countries. We argued that this should apply to us because of our population growth and fossil fuel-intensive economy. (Which, of course, has great relevance in current debates on whether Australia is pulling its weight on climate change.)

Domestically, the Government was busy rolling out the first tranche of spending under the Natural Heritage Trust, which had been funded through the partial sale of the national telecommunications utility, Telstra. It was also in the midst of reforming national environmental law, tabling the Environment Protection and Biodiversity Conservation (EPBC) Bill, later passed in 1999 as the EPBC Act (now up for its second decadal review).

While all this was important, top of the Government’s reform agenda was the introduction of a goods and services tax (GST). This reform would deliver unexpected, possibly even accidental, environmental benefits (as I discuss below).

Winning our emissions bargain

As you might expect in the immediate aftermath of the Kyoto climate meeting, the environmental issue taking most of Cabinet’s attention was whether to ratify the protocol, and its implications for domestic policy.

Having been worried in the lead up to Kyoto that Australia’s hard line might lead to diplomatic isolation, the Government could rest easy. Australia’s tough negotiating stance had been very successful and the three ministers with climate responsibilities were able to report that the Kyoto agreement had met all of Australia’s primary objectives. (I once heard that Environment Minister Robert Hill was applauded when he entered the Cabinet room on return from Kyoto.)

They advised Cabinet that the 108% target represented a cut to business-as-usual growth of 30%, which was ‘comparable to the average for industrialised countries as a whole’. Another important achievement was international agreement that emissions from land use change and forestry (now known as Land Use, Land Use Change and Forestry, or LULUCF) would be treated much the same as other anthropogenic emissions. This was important for Australia because much of our target would be obtained through a reduction in emissions from a reduction in land clearing.

Even though Kyoto was done, the climate change caravan kept on rolling. Australia also had to settle its position for the fourth Conference of the Parties to the Climate Change Convention (COP 4 – we’ve just had COP 25).

The interesting point in our position was that we decided to push for the widest possible and most flexible international emissions trading scheme. This did not come from any government convictions about the efficacy of emissions trading, but simply to keep our options open: the US had estimated that they might meet up to 75% of their emissions task by purchasing international permits, reducing compliance costs by something between 60 and 90%!

Domestically, Cabinet agreed to update the National Greenhouse Strategy (‘National’ indicating that the States were parties) in light of Kyoto, but without allocating extra money. This was because the Government had already announced a $180 million package in the lead-up to Kyoto.

But nothing on the EPBC Act

To my surprise, there was no Cabinet submission on the EPBC Bill. I find it hard to believe that Environment Minister Robert Hill got such a major reform through without a stand-alone Cabinet submission, but I double-checked and Archives does not list any submission related to this reform beyond an earlier authority to negotiate an EPBC precursor, what became the 1997 COAG Heads of Agreement on Roles and Responsibilities for the Environment. This was the document by which the States endorsed Hill’s set of ‘Matters of National Environmental Significance’.

So I’ve requested access to some related files to dig deeper. Watch this space: I’ll report what I find.

Show me the money

There were a number of submissions relating to environmental spending. Most are no longer interesting but there was one interesting money story.

In 1999 the Government persuaded the Australian Democrats to support the introduction of the Goods and Services Tax (GST) by funding a new environmental package, known as Measures for a Better Environment. This package included some significant reforms designed to reduce transport emissions and greenhouse gases.

Some reforms were vehicle-based, including incentives for buses and trucks to shift to CNG and LPG, while others were fuels- based, including a commitment to develop national fuel standards. There were also rebates for installing solar panels and increased support for the commercialisation of renewable energy.

I heard an interesting story recently that suggests that the strength of this package might have been fortuitous. Apparently Prime Minister John Howard asked Treasurer Peter Costello how much they should be prepared to spend on such initiatives. ‘About 400’ was the reply. Howard duly offered $400m. It seems Costello was thinking $400,000.

Could it be that this is how we get significant environmental reform? Through horse-trading or accident?

Image by Pexels from Pixabay