Victoria’s new climate change legislation introduced into Parliament

In 2015, the Victorian Government commissioned the Independent Review of the Climate Change Act 2010 (2010 Act) (Review). The Review found that the 2010 Act did not adequately support the current and future needs of Victoria in responding to climate change and made 33 recommendations, of which 32 were accepted by the government.

Since the Government released its formal response to the Review in June this year, it has been working on preparation of a Climate Change Framework, which is expected to be released before the end of the year. It has also prepared replacement legislation for the 2010 Act and on 22 November 2016, the Climate Change Bill 2016 (Bill) was introduced into Parliament. Subject to being passed, the proposed Act is intended to commence on 1 November 2017.

The Bill repeals and re-enacts the 2010 Act with amendments to give effect to the majority of the commitments set out in the Government’s response to the Review. The reforms include:

• establishing greenhouse gas emissions reduction targets for Victoria, including a long-term emissions reduction target of net-zero emissions by 2050;
• providing for the regular publication of plans and reports to increase transparency and accountability, and to ensure that the community remains informed of Victoria’s ability to meet its emissions reduction targets;
• introducing a new set of climate change policy objectives and guiding principles which will help ensure that government decision-making appropriately takes account of climate change; and
• amending the Environment Protection Act 1970 (EP Act) to allow the Environment Protection Authority (EPA) to regulate the emission of greenhouse gases if directed by the government of the day.

Further detail on these reforms is set out below.

The objectives and underlying rationale for the approach taken in the Bill is clearly framed by the preamble, which includes the following statements:

“The Parliament of Victoria recognises on behalf of the people of Victoria that the international community has reached agreement to hold the global average temperature increase to well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees Celsius above pre-industrial levels the goals enshrined in the Paris Agreement.

There is overwhelming scientific consensus that human activity is causing climate change and that global emissions will need to decline to net zero levels by the second half of the century if this global goal is to be met.

….Although responding to climate change is a responsibility shared by all levels of government, industry, communities and the people of Victoria, the role of subnational governments in driving this transition cannot be understated. Through decisive, long-term action to reduce greenhouse gas emissions, the Victorian government can help Victoria achieve an orderly and just transition to a net zero greenhouse gas emissions economy and remain prosperous and liveable. It will also enable Victoria to benefit from the global trend towards decarbonisation.

…The Parliament of Victoria recognises that the community wants and expects Victoria to play its part in global mitigation efforts and in preparing the community for unavoidable climatic impacts. This Act will help ensure Victoria remains prosperous and liveable as we transition to meet these challenges.

The Bill enshrines Victoria’s long-term target of net zero greenhouse gas emissions by 2050 in legislation and imposes a statutory obligation on the Premier and Minister for Climate Change (Minister) to ensure that the State achieves the target. The target of net zero greenhouse gas emissions will be able to account for the deduction of any eligible offsets from outside of the State, although the type of eligible offsets are likely to be prescribed in subordinate legislation.

To provide transparency in working towards the long-term target, the Bill requires the Government to:

• set interim targets every 5 years and assess Victoria’s progress against these targets at the end of each 5 year period; and
• publish an annual greenhouse gas emissions report, which includes an overview of the State’s greenhouse gas emissions and the extent to which these emissions have been reduced.

Although the first target is not required to be set until 31 March 2020, the Government has indicated that it will be working to announce the first two targets (which will cover the period 1 January 2021 to 31 December 2030) by 2018.

The targets will be informed by independent expert advice, and will based on 2005 as the baseline year. Of note, each interim target must be tighter than the previous target. A interim target can only be amended if the Premier and the Minister consider that exceptional circumstances justify the amendment and reasons are required to be provided as to why the amendment is necessary.

To ensure that Victoria understands and is well prepared for the inevitable impacts of climate change, the Bill also requires a series of plans and reports to be prepared every 5 years, including:

• a climate science report, which provides an update on the implications of climate change for Victoria;
• adaptation action plans for systems that are either vulnerable to the impacts of climate change or essential to Victoria being prepared for these impacts (such as the natural and built environments, the water cycle, and primary production); and
• a climate change strategy, which includes a statement of priorities relating to both adaptation to, and mitigation of, climate change.

To ensure that any action taken on climate change across different areas of government is consistent and coherent, the Bill builds on the principles-based approach set out in the 2010 Act. The guiding principles from the 2010 Act are largely unchanged, however a new set of policy objectives is introduced to guide policy making across government. The policy objectives include:

• reducing emissions in line with the long-term and interim targets
• building Victoria’s resilience for climate impacts
• promoting and supporting regions, industries and communities to adjust to a net zero transition, including capturing new opportunities; and
• supporting vulnerable people and communities in the transition.

The Bill proposes that all Government decisions must take appropriate account of climate change, with the proposed wording as follows:

The Government of Victoria will endeavour to ensure that any decision made by the Government and any policy, program or process developed or implemented by the Government appropriately takes account of climate change if it is relevant by having regard to the policy objectives and the guiding principles

Ministerial guidelines will be issued governing how the Government is required to have regard to the policy objectives and the guiding principles.

Although the Government’s response to the Review flagged the possible expansion of the requirement for certain Government decisions to account for climate change, the Bill does not currently propose any changes to the scope of this requirement.  Certain government decisions under legislation specified in Schedule 1 to the Bill (such as the Environment Protection Act 1970 and the Water Act 1989), are required to have regard to:

• the potential impacts of climate change;
• the potential contribution to the State’s greenhouse gas emissions; and
• any guidelines issued by the Minster.

A review of Schedule 1 is proposed to be undertaken to ascertain whether the list of legislation in Schedule 1 should be expanded.

As recommended by the Review, the Bill also introduces a pledge model. The pledges, which will match the 5 yearly interim target periods, will specify actions which will be taken to reduce emissions and a reasonable estimate of the reduced emissions. The Bill requires:

• a whole of government pledge, which sets out emissions reduction activities from all government departments as well as public entities with significant emissions profiles (these entities will be prescribed in future regulations); and
• sector pledges, which include policy and regulatory measures to be implemented to drive emissions reductions in key sectors such as agriculture, waste and energy (the covered sectors will also be set out in future regulations).

The Bill does not impose any mandatory requirements on local government, but does enable councils to opt in to the pledge system.

The Bill retains the provisions of the 2010 Act dealing with forestry rights, carbon sequestration rights and soil carbon rights and maintains the ability for carbon projects to be undertaken on Crown land through the entering of a carbon sequestration agreement with the Government.

We will be monitoring the progress of the Bill through the Parliament and the development of the subordinate legislation, including the review of Schedule 1. If you would like any assistance to understand how the Bill may impact on you or your activities, please do not hesitate to contact a member of our Climate Change team.