Sustainability Bites

People have been calling for the creation of a ‘climate trigger’ for years, but to little avail. Why? Because things are complicated, and a climate trigger is not the only game in town. It’s no silver bullet, but a quick check on where Australia’s emissions are coming from suggests a climate trigger may have a role to play.

One of the most frequent criticisms of Australia’s premier national environmental law, the Environment Protection and Biodiversity Conservation Act (EPBC Act), is that it says nothing about the biggest environmental issue of all, climate change.

For constitutional reasons, the EPBC Act is built around a number of specific ‘matters of national environmental significance’, or ‘MNES’, such as World Heritage and threatened species. People sometimes refer to the provisions that invoke protections for MNES as ‘triggers’.

Hence, the wording of the criticism that there is no ‘climate trigger’.

Two reviews and lots of talk

As required by law, the EPBC Act has been subject to two independent reviews; the first in 2009 by Dr Allan Hawke, and the second, in 2020, by Professor Graeme Samuel.

As Australia was mired in a highly-controversial debate about a carbon price at the time of the first review, Dr Hawke recommended an ‘interim greenhouse trigger’, that would sunset once the carbon price came into effect. The government rejected that recommendation, and the Senate rejected the carbon price, leaving us with pretty much nothing.

Australia eventually gained a carbon price under the Clean Energy Future scheme in 2011, but the carbon price remained highly controversial and the scheme was repealed by the new Abbott Coalition government in 2014.

Climate gets an honourable mention …

Against this backdrop, Professor Samuel would later recommend against a climate trigger in his final report, for two reasons. First:

… successive Commonwealth Governments have elected to adopt specific mechanisms and laws to implement their commitments to reduce greenhouse gas emissions. The EPBC Act should not duplicate the Commonwealth’s framework for regulating emissions.

Second, a climate trigger would be inconsistent with Commonwealth-State agreements that emissions would be dealt with by national-level strategies and programs, rather than by the EPBC Act.

However, there was merit in requiring proponents making application under the EPBC Act to:

… transparently disclose the full emissions profile of the development. The Act should also require that
development proposals explicitly consider the effectiveness of their actions to avoid, mitigate or offset
impacts on nationally protected matters under specified climate change scenarios.

Pass the info on

Although it was now a Labor government, rather than previous conservative coalition government, responding to the review, and despite having quite a strong stance on dealing with climate change, the Albanese Government accepted Professor Samuel’s advice and maintained the position that the EPBC Act would not directly regulate climate impacts.

Rather, under the Nature Positive Plan reforms it announced in 2022, climate would be merely be considered in Australia’s new nature laws.

Development proponents would be required to include expected greenhouse gas emissions in environmental impact assessments — ie to disclose likely emissions (but only domestic emissions, thus excluding downstream emissions that occur overseas, for example when Australian coal is burnt by foreign customers).

The Environment minister would simply pass the information to the Climate Minister; there would be no additional regulation.

Beyond that, climate considerations would now be a mandatory consideration in various environmental planning processes.

The government’s rationale for this ‘light touch’ approach to regulating climate impacts in Australia’s primary national environmental law is that it already has the bases covered, especially through the ‘Safeguard Mechanism’.

This is a separate regulatory framework, originally introduced but not really used by the previous Coalition government, which sets emission baselines for the largest emitters and ratchets those baselines down progressively to net zero by 2050, while allowing emitters to buy or sell carbon credits, according to whether they are ahead or behind in meeting their baselines.

Currently, there are 219 Safeguard Mechanism facilities, accounting for about 28% of Australia’s emissions.

The case for a Climate Trigger

Twenty eight down; what about the remaining 72% of emissions?

Many sources, such as vehicles and farms, are too small to regulate individually, or, like households, produce emissions indirectly, by consuming services such as electricity. These sources are addressed through various sector-wide measures, such as the Capacity Investment Scheme, under which the government buys renewable energy at large scale, or the Agriculture and Land Sector Plan, which funds general measures such as capacity building and innovation.

But there are some activities outside the top 219 emitters that are big enough to regulate directly.

First, there are many facilities that, while too small to be caught by the Safeguard Mechanism, are big enough (emissions over 25,000 tonnes per annum) to be subject to mandatory national reporting, facilities that make everything from paper to bricks. If these emitters are big enough to report directly to the national reporting scheme, they are big enough to consider regulating.

Then there is land clearing, which affects not just biodiversity, but climate as well, because vegetation and soil are major carbon sinks In Australia, we clear over 400,000 ha per annum.

While carbon emissions from land clearing are hard to calculate, the Wilderness Society has estimated that land clearing in Australia emits about 100 million tonnes each year, representing about 20% of Australia’s annual emissions.

So there’s a prima facie case for a climate trigger for proposed facilities likely to generate emissions over the 25,000 tonne threshold.*

Carrots and sticks

But is regulation the best way to reduce emissions in these sectors?

Economic instruments such as a carbon price are the most efficient, but on the back of Prime Minister Tony Abbott’s ‘axe the carbon tax’ election win back in 2013, Australian politics has made carbon pricing untouchable.

Another option would be to lower the threshold for the Safeguard Mechanism, though that’s not on the government’s agenda either.

There’s another, relatively new, factor to bear in mind. Since the Climate Change Act was passed in 2022, we have been legally committed, both internationally and domestically, to reach Net Zero by 2050.

So, while incentive-based approaches are good, now that we are legally bound to Net Zero, we need a mechanism that will guarantee compliance.

This is where traditional regulation comes into its own. When incentives (carrots) aren’t enough, we need a reserve power to say no (sticks); this will becoming increasingly important as we approach 2050 and policy effort becomes correspondingly focused on hard-to-abate activities.

Also, I think we have to distinguish between existing and proposed facilities. Existing emissions might be reduced with help from sectoral initiatives, such as those that facilitate a switch from fossil fuel to green hydrogen for combustion, but significant new sources are another thing.

Thresholds and duplication

In that context, when it comes to new facilities with significant emissions, we have to be able to pose the threshold question: does this significant new source of emissions benefit society? We are spending billions on decarbonising the economy, so, as long as there are alternatives, why would we want to let a new high emitting facility start up?

It’s a similar story with large-scale land clearing. While there will continue to be reasons for allowing it for some purposes, as 2050 looms, there will also be increasingly good reasons to say ‘as a society, we can’t afford this’.

The remaining problem, that of duplication with the Safeguard Mechanism, is straightforward to deal with: include a carve out for any facility that will be picked up by that mechanism.

Then there’s the politics …

Despite the complexities, making a policy case for a climate trigger looks like the easy bit. With anything environmental, the highest hurdles are political.

A Labor government has to differentiate itself from from both the Left and the Right. Because the Greens support a climate trigger, signing up to a trigger opens Labor to a Coalition attack line that it is in bed with ‘radical Left greenies’.

But holding out against a climate trigger feeds a Green and cross-bench attack that Labor are in bed with big business, because they won’t fix an obvious hole in Australia’s premier national environmental law.

Despite these risks, the government has been steadfast in opposing a climate trigger. In fact, environment minister Tanya Plibersek has been pushing back strongly against any suggestion that the bill she currently has in Parliament to establish an Environmental Protection Agency (EPA) might be used to piggy-back this and other reforms.

Trigger warning

So, clearly, we won’t be getting a climate trigger any time soon. Right?

Well, last year, this same government were steadfast in opposing amendments to their Nature Repair Market bill.

Until they weren’t. Almost without warning, they did a deal with the Greens that involved, among other things, excluding biodiversity offsets from the market that this bill would intended to create.

That would have hurt the government policy-wise, as demand for offsets would probably be the biggest driver of the biodiversity markets the bill sought to create. But the deal was done, nonetheless.

So maybe we’ll get a climate trigger this year, the last chance before the election? The possibility clearly has business and farming groups worried enough for them to fire a warning shot across the government’s bows.

Stay tuned for further developments …

*Mandatory national reporting extends to businesses with multiple emission sources, eg an airline, but the EPBC Act would not be suitable for regulating such multi-source entities.

Banner image: Could a climate trigger fire silver bullets?
(Image by Andy Choinski from Pixabay)