Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2004-2005-2006
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
Climate Change Action Bill 2006
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator Milne)
Climate Change Action Bill 2006
OUTLINE
1. As a result of increasing levels of carbon dioxide and other greenhouse gases in the
atmosphere, global average temperatures have risen by 0.6°C over the past century.
The international consensus of scientific opinion is that this trend will lead to a rise of
global temperature by 2 - 5°C over the next century. Such a rise in temperatures
would be devastating to most of the world.
2. The changing global climate will affect our natural and built environments as
temperatures rise, rainfall patterns change and sea levels rise and force adjustments
to our way of life. As extreme weather events become more frequent and changes
are made to the way we use energy, the way we live and work will have to change,
and the lifestyle we take for granted may not be enjoyed by our children and
grandchildren.
3. Climate change is the most significant challenge facing the global community and the
greatest threat to Australia's way of life.
4. According to the CSIRO, Australia is hotter and drier than it was 100 years ago, with
less water per capita, more bush fires and more extreme weather events. 1
5. According to the CSIRO & the Bureau of Meteorology, Australia is very vulnerable to
climate change. A 2°C increase in global temperature would severely damage the
Great Barrier Reef, Kakadu's wetlands and the alpine regions of south eastern
Australia, as well as threaten low lying coastal areas.
6. Governments around the world have started planning for these changes; acting to
minimise the magnitude and rate of change by reducing greenhouse gas emissions
and adapting to future climate change that is now unavoidable. Responsible
Governments are:
· Investing in climate change science to improve our understanding of future
climate;
· Talking to the community and businesses about climate change and what it
means for them;
· Actively shifting their economies to succeed in a world where greenhouse gas
emissions are increasingly restricted; and
· Working multilaterally with other Governments to reduce greenhouse gas
emissions and preparing for a future under a changing climate, while respecting
their common but differentiated responsibilities and capabilities.
7. Recognising the need to stabilise greenhouse gas concentrations in the atmosphere
and the absolute importance of united global action to meet this challenge, the United
Nations Framework Convention on Climate Change was agreed to in 1992. Since
then the Parties have continued to negotiate and the third session of these
negotiations resulted in the adoption of the Kyoto Protocol to the Convention in
December 1997.
1
CSIRO consultancy report for the NSW Greenhouse Office, November 2004.
8. The Kyoto Protocol signifies an important change in the attitude of nations and shows
they are serious about addressing climate change. It represents a global response to
a global problem. The Kyoto Protocol has four major features:
· Binding targets on greenhouse-gas emissions for all developed countries and
for those countries in transition to a market economy. These targets range from
-8 per cent to +10 per cent of the countries' 1990 emissions levels by 2008-2012.
For example, most of the European Union will have to cut their emissions by 8%,
New Zealand, Russia and Ukraine must keep their emissions stable and
Australia would be able increase its emissions by 8%. Of the industrialised
nations, only Australia and Iceland have a target which permits an increase from
1990 levels. As well as having a low emission target, a special clause was
included for Australia's benefit so cuts in land-clearing would be counted.
· Flexibility and market based mechanisms to assist countries to meet the
targets. For example, countries may partially compensate for their emissions by
increasing "sinks" (forests, which remove carbon dioxide from the atmosphere).
The sinks can be on their own territory or in other countries, or they may pay for
foreign projects that result in greenhouse-gas reductions. To ensure the flexibility
and economic efficiency of making emission cuts, mechanisms such as
emissions trading have been established so parties may trade units of their
emissions allowances with other Parties.
· Project based mechanisms, known as Joint Implementation and Clean
Development Mechanisms, through which industrialised countries can partly
meet their emissions targets through "credits" earned by sponsoring greenhouse-
gas-reducing projects. In the case of Clean Development Mechanism projects,
such activities occur in developing countries.
· It has widespread international support and will provide the architecture and
reporting, monitoring and verifying infrastructure for future international
agreements on climate change. Countries such as Canada, Japan, New Zealand
and every country in Europe, are all adopting domestic measures to implement
the Kyoto Protocol and countries like India and China have developed the
necessary frameworks for the pursuit of Clean Development Mechanisms.
8. The Kyoto Protocol became legally binding on 16 February 2005.
9. After gaining significant concessions, Australia signed the Kyoto Protocol on 29
April 1998. However, for purely political reasons, Australia is now one of only
two developed countries not to have ratified it. The other is the United States.
10. The Climate Change Action Bill 2006 (the Bill) will:
· Require the Australian Government to take the necessary steps to ratify the
Kyoto Protocol within 60 days of the commencement of the Act;
· Set national greenhouse gas emission targets for 2020 (20% below 1990 levels)
and 2050 (80% below 1990) including annual progress reporting and five-year
review periods. Australia must meet these targets if it is to contribute equitably to
the global challenge of avoiding dangerous climate change;
· Introduce a greenhouse trigger into the Environment Protection and Biodiversity
Conservation ACT 1999 (EPBC Act) to ensure that information about the
greenhouse gas emission resulting from major developments are adequately
considered during approval processes. The trigger will be any action likely to
result in greenhouse gas emissions of more than 100,000 tonnes of carbon
dioxide equivalent in any 12-month period;
· Introduce a national energy savings target to halt the growth in energy
consumption by 2008; in effect the trigger is equivalent to business-as-usual
growth in energy consumption;
· Require large energy users to undertake energy efficiency audits, publicly report
on opportunities that have a payback period of up to ten years, and to implement
energy saving measures that have a payback period of up to three years;
· Increase the Mandatory Renewable Energy Target (MRET) so renewable
electricity contributes at least 15% to national demand by 2012 and 25% by
2020;
· Require the establishment a system of renewable energy feed-in tariffs to
provide a minimum price per unit of produced renewable electricity for a set
period to provide investors security on income; and
· Immediately end the harvesting of old growth forests to maintain existing
significant carbon stores.
FINANCIAL IMPACT STATEMENT
Ratification of the Kyoto Protocol would have no direct financial impacts on the
Commonwealth budget; however, ratification would stimulate significant and immediate
benefits to Australian businesses by enabling their participation in emissions trading and
renewable energy technology markets.
Climate Change Action Bill 2006
NOTES ON INDIVIDUAL CLAUSES
Clause 1 Short title
1. The short title by which this Act may be cited as the Climate Change Action Bill
2006.
Clause 2 Commencement
2. This clause provides that the Act commences on the day on which it receives the
Royal Assent.
Clause 3 External Territories
3. This clause provides that the Act extends to the external Territories
Clause 4 This Act binds the Crown
4. This clause provides that, if the bill is passed, the Crown is bound by its
provisions.
Clause 5 Application of Criminal Code
5. This clause provides that the Criminal Code applies to all offences against the Act.
Clause 6 Interpretation
6. This clause defines certain terms that are used in the Act.
Clause 7 Object of the Act
7. This clause provides that the object of the act is to:
(a) ensure that Australia meets its obligations under the Convention; and
(b) assist with global efforts to stabilise greenhouse gas concentrations in the
atmosphere at a level that would prevent further human interference with
the climate system; and
(c) achieve this level within a timeframe sufficient to:
(i) allow ecosystems to adapt naturally to climate change; and
(ii) safeguard human health and well-being; and
(iii) ensure that food production is not threatened; and
(iv) enable economic development to proceed in a sustainable manner.
Clause 8 Ratification
8. This clause requires the Government of the Commonwealth of Australia to deposit
a legal document of ratification of the Kyoto Protocol with the United Nations within
60 days of the commencement of the Act.
Clause 9 National Climate Change Action Plan
9. Under this clause the Minister will be required to have a National Climate Change
Action Plan prepared. The plan must set out a detailed implementation strategy to
meet Australia's obligations under Article 2 of the Kyoto Protocol, so Australia will
achieve its quantified emission limitation and reduction commitments under Article
3 of the Protocol.
Clause 10 The Kyoto Target
10. This clause requires the Minister to ensure that Australia's aggregate human
induced carbon dioxide equivalent emissions in the first commitment period, 2008-
2012, do not exceed 108% of the 1990 levels.
Clause 11 Annual Greenhouse Gas Inventory and National Communication
11. This clause requires the Minister to establish a national system for estimating
human induced emissions of greenhouse gases not controlled by the Montreal
Protocol, as required by Article 5 and as accepted by the Intergovernmental Panel
on Climate Charge (IPCC). The clause also requires the Minister to publish the
annual inventory of greenhouse gas emissions, and to submit it for review by
expert review teams, pursuant to decisions of the Conference of Parties, as set out
in Article 8 of the Kyoto Protocol. Finally, the clause requires the Minister to submit
an Annual Communication in accordance with article 7, and subject to subsequent
decisions by the Conference of the Parties.
Clause 12 Framework for involvement in international trading schemes
12. This clause requires the Minister to develop a means by which the international
transfer of emission reduction units can be facilitated. Such a mechanism would
include means by which units could be transferred as a result of reduced human
induced emissions or enhanced human induced removals by sinks of greenhouse
gases. The mechanism would also allow for the transfer of emission reduction
units under the clean development mechanisms. The clause would also require
the Minister to establish a registry of emission units to ensure the accurate
accounting for and recording of units and their transfer, and the accurate,
transparent and efficient exchange of information between Australia and overseas
registries.
Clause 13 Emission reduction targets
13. This clause requires the Minister to establish regulations setting targets for
reducing Australia's greenhouse gas emissions. The initial targets must not be
more than 108% of the 1990 emission levels in the first commitment period of the
Kyoto Protocol, beginning on 1 January 2008 and ending on 31 December 2012.
After the year 2020, the regulations must set a target which is at least 20% below
1990 emission levels. After the year 2050, the regulations must set a target which
is at least 80% below 1990 emission levels. The Minister must, by 31 March each
year, table in each House of the Parliament a report of Australia's greenhouse gas
emissions in the previous year.
Clause 14 Inquiry into greenhouse gas emissions
14. This clause requires the Minister to cause a public inquiry into the level of
Australia's greenhouse gas emissions to be conducted by the department of state
responsible for climate change and energy, every five years commencing on the
date of commencement of this Act. The Minister must table a copy of the report in
each House of the Parliament and must take the recommendations into account in
making regulations under section 13.
Clause 15 National energy savings target
15. This clause requires the Minister to set a national energy savings target in order to
offset business as usual growth in energy consumption.
Clause 16 Minimum price for renewable energy
16. This clause requires the Minister to specify regulations setting a minimum price to
be paid to generators of electricity, for electricity generated by eligible renewable
energy sources, for set periods.
Clause 17 Prohibition of logging in old growth forests
17. This clause provides that it shall be an offence for a person to conduct logging
activities in any forest that is ecologically mature where forest in the upper stratum
or overstorey is in the late mature growth phases.
Clause 18 Amendment of the Environment Protection and Biodiversity
Conservation Act 1999
18. The Environment Protection and Biodiversity Conservation Act 1999 is amended
as set out in Schedule 1.
Clause19 Amendment of the Renewable Energy (Electricity) Act 2000
19. The Renewable Energy (Electricity) Act 2000 is amended as set out in Schedule 2.
Clause 20 Amendment of the Energy Efficiency Opportunities Act 2006
20. The Energy Efficiency Opportunities Act 2006 is amended as set out in Schedule
3.
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