On Wednesday, the federal government introduced a new bill into parliament that will legislate the nation’s commitments to reduce greenhouse gas emissions.
The Climate Change Bill 2022 will enshrine Australia’s nationally determined contribution under the Paris Agreement of a 43 per cent reduction in emissions from 2005 levels by 2030 as well as its commitment to reaching net zero by 2050.
The government suggested that legislating the targets would deliver “the strongest possible signal” to industry and investors about the country’s collective commitment to decarbonising the economy and becoming a “renewable energy superpower”.
Additionally, the government claimed that it would help to restore Australia’s international reputation by positioning it to capitalise on opportunities that arise from global climate action.
Minister for Climate Change and Energy Chris Bowen said that the bill delivered on the climate promises made by Labor in the lead-up to the federal election.
“This bill confirms our commitment to ambitious but realistic targets supported by Australia’s states and territories, business, industry, unions, environmental and community groups – and provides a platform for collaboration to drive down emissions while ensuring reliable energy supplies,” he said.
“The bill makes it clear that 43 per cent is our minimum commitment — and does not prevent our collective efforts delivering even stronger reductions over the coming decade.”
Under the legislation, the Climate Change Authority would be tasked with providing advice on Australia’s progress against its current targets while also advising on new targets as part of the Paris Agreement, including a target for 2035.
The Minister for Climate Change would be required to report to parliament annually on the nation’s progress towards meeting its targets.
The legislation also inserts the targets into the objectives and functions of a range of commonwealth agencies and schemes including the Clean Energy Finance Corporation (CEFC), the Australian Renewable Energy Agency (ARENA) and Infrastructure Australia.
“The current issues confronting Australian and global energy markets highlights why this long-term commitment is so important,” said Mr Bowen.
“The Albanese Government is giving the parliament the opportunity to end the climate wars. We encourage members of the parliament to support this bill and signal our shared national commitment to responsible climate action.”
The Investor Group on Climate Change (IGCC) said that the bill could help unlock hundreds of billions of dollars worth of investment in climate solutions across the economy.
“The proposed bill includes many of the elements that will support the efficient allocation of capital to Australia,” said IGCC director of policy Erwin Jackson.
“Investors seek best practice legislative frameworks that include legislated targets, and independent advice on the policies needed to ensure an equitable transition to net zero.
“These measures will reduce the risk of continuing the chaotic climate policymaking which has increased investment risks and costs in Australia.”
According to the IGCC’s estimates, stronger emissions targets will provide the opportunity to unlock roughly $131 billion in new investment this decade.
Meanwhile, Climate Council CEO Amanda McKenzie welcomed the Climate Change Bill but called on parliament to use it as a foundation for further action.
“It is important that the government has said their targets are the floor not the ceiling, and can be improved overtime. But the language in the bill should make clear that there is no obstacle to governments going faster and further,” she said.
“This new legislation can act as a springboard for Australia to cut emissions and grasp the incredible opportunities that are within our reach as one of the sunniest and windiest places on the planet.”
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.