Climate Change Bill 2022: Here’s What You Need to Know

In what is widely considered to be a landmark climate change reform, Australia’s parliament recently passed legislation to cut carbon emissions by 43% (compared to 2005) by 2030 and to reach net zero by 2050. It is Australia’s first climate legislation in a decade.

Australia’s Climate Change and Energy Minister, Chris Bowen, stated that the passing of the legislation showed how the country was “serious about reaping the economic opportunities from affordable renewable energy.”

The consensus is that this Climate Change Bill will provide businesses more clarity in setting their own net zero and emissions reduction targets and accelerate Australia’s energy transition towards renewables. Experts also predict that energy efficiency and electrification could get increased focus as a result of the legislation.  

What are the key elements of the Climate Change Bill?

The Climate Change Bill has four key elements. 

  • The first key element, as mentioned earlier, is the commitment to cut greenhouse gas emissions to 43% below 2005 levels by 2030, and to reach net zero by 2050.
  • The second element expands the advisory role of the Climate Change Authority as it is tasked with monitoring Australia’s progress against the current targets and informing the setting of future targets, including Australia’s next target under the Paris Agreement, for 2035. 
  • The third key element involves Australia’s Climate Change Minister reporting annually to the Parliament on the country’s progress with the set targets. 
  • The Climate Change Bill’s final component is its inclusion of the nation’s targets in the goals and duties of a number of important government organisations, including the Australian Renewable Energy Agency (ARENA), Clean Energy Finance Corporation (CEFC), Infrastructure Australia, and the Northern Australia Infrastructure Facility (NAIF). This implies that those organisations will have to follow the law’s guidelines.

What are the initial reactions? 

The initial reactions to the climate change legislation have mostly been positive, with many calling it an “important first step” in Australia’s fight against climate change. Experts believe the climate change bill will be sending a strong signal to businesses, investors, trade partners, and the public in general about the emissions reduction targets. 

Reacting to the Climate Change Bill, the Energy Efficiency Council’s CEO Luke Menzel, tweeted, “Net zero legislated! This is not symbolic. It will drive decision-making by business and government. There is more to accomplish, but for today congratulations to everyone in our nation’s Parliament that made this happen. (sic)” 

Some climate activists, on the other hand, opined that the emission targets could have been higher and stressed the government to achieve more. 

How Australia’s climate and emissions reduction targets compares to other countries?

Several other countries have implemented climate policies and emission targets, with all of them being different from each other. While the United Kingdom has committed to cutting emissions by 78% (compared to 1990 levels), the United States aims to reduce emissions by 52% in 2030 (compared to 2005 levels).

Japan, New Zealand, and Canada on the other hand want to reduce their emissions by 46%, 46%, and 40% respectively (both by 2030 compared to their 2005 levels). 

Comparing Australia’s targets with other countries, Mark Howden, who’s the vice chair of UN’s Intergovernmental Panel on Climate Change (IPCC), in an interview to BBC said, “We’re no longer a laggard.” He also added that the targets don’t make Australia “a global leader” either. 

What does the Bill mean for Australia’s Energy Situation?

Speaking about the impact the Bill will have on the energy market, Mr Bowen said, “Legislating these targets gives certainty to investors and participants in the energy market and will help stabilise our energy system.”

So how would this impact Australia’s energy situation? According to the Australian Energy Market Operator (AEMO), in the current scenario, approximately two-thirds of the country’s electricity is generated by thermal generation. On the other hand, renewables (rooftop and grid-scale solar, wind, hydro, and biomass) make up 33.31% of the country’s energy market. The remaining 0.10% is from battery storage.

Through this policy, the Australian government is also seeking to accelerate the energy transition by reducing the reliance on fossil fuels and promoting the adoption of renewables. 

Energy Efficiency & Electrification Technologies Could Get Increased Focus

Industry experts believe that the recently passed bill could ramp up the Labor Party’s Powering Australia plan, which is separate from the legislation. 

A component of this plan involves the recent announcement from ARENA indicating that it has expanded its remit to include energy efficiency and electrification technologies. 3E Group had earlier welcomed this announcement since this broader focus enables better demand management, and reduced energy costs and emissions for businesses that implement solutions and support a flexible, renewable grid. 

Apart from this, through Powering Australia, the government also aims to invest $20 billion towards upgrading the electricity grid so that it could handle more clean energy, and also cap emissions from the nation’s 215 biggest polluting facilities.

What could happen next?

Predicting the immediate impact of the legislation might be difficult until a full plan is released, according to Dr Cassandra Star, who is the Associate Professor of Public Policy at Flinders University and director of the university’s Climate and Sustainability Policy Research Group. 

But having said that, other experts expect that there are five aspects where there could be an increased emphasis in the near future: 

  • Accelerating the transformation of Australia’s energy system to renewable power. 
  • Focusing on electrification and energy efficiency. 
  • Improving the job sector by giving a major boost to clean manufacturing. 
  • Putting an end to land clearing and speeding up efforts to restore degraded land and forests.
  • Bolstering the institutions and legislation that facilitate Australia’s transition to a zero-emission economy.

Partnering with 3E Group to set and achieve Net Zero targets

When you partner with an impact fund-backed Net Zero solutions provider like 3E Group (formerly Ecosave Australia & NZ), your organisation can efficiently work towards emissions reduction and accelerate your journey towards Net Zero. Connect with 3E Group or call us today at 1300 55 77 64. 

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