A Legal Lens on Climate Change

The Albanese Government’s Climate Change Bill has officially passed the Senate, with 37 votes to 30. It legitimises Australia’s efforts and acts as a first step towards making a tangible difference in reducing climate pollution.

The Climate Change Act 2022 (Cth) (the Act) and the associated Climate Change (Consequential Amendments) Act 2022 (Cth) functions as an ‘umbrella’ piece of legislation, providing direction and setting the scene when it comes to Australia's net-zero commitments and according with the targets set under the Paris Agreement. The major focus of the Act is to drive an economy-wide emissions reduction, with formal targets legislated being:

• reducing net Green House Gas (GHG) emissions to 43% below 2005 levels by 2030; and
• reducing net GHG emissions to zero by 2050.

The 43% emissions reduction by 2030 target is also merely set as a minimum goal and can be further increased as progress is made. The targets are also automatically increased every 5 years to ensure that Article 2 of the Paris Agreement is followed.

With a now clear and legislated goal to reduce climate pollution this decade, various sectors will ultimately be affected, including the energy, property, environment, manufacturing, and farming sectors. As policies are established and through the annual progress report required to be provided by the Minister to Parliament, implications of this Act are likely to be extensive.

This development is not the first in the climate change space, with an urgent independent inquiry currently being undertaken into the integrity of Australian Carbon Credit Units (ACCUs) under the Emission Reductions Fund. There is also another inquiry currently underway by the Australian Government, this time in relation to the Safeguard Mechanism and its effectiveness in assisting industry to reduce emissions in line with Australia’s climate targets.

Legal frameworks are likely to evolve as a result of this Act and the various related Commonwealth policies and inquiries. This highlights how essential it is for businesses to reach out and receive the most up to date and pertinent legal advice. There are likely to be very real material changes to the way such schemes operate, and even the possibility of new ones appearing. Businesses could be faced with additional obligations and requirements to ensure a further reduction or offset in their total emissions and therefore made to abide by even lower baseline targets.

These changes could turn into real risks to businesses if a failure to recognise and conform is detected. Reporting obligations may become more stringent and detailed, with businesses likely having to take a closer look at their own activities, outputs, and footprint. Improved methods of tracking, measuring, and reporting will need to be implemented across a range of industries and businesses. This will effectively mean that a greater investment in staff, technology and resources is likely required for many, to ensure that this duty is completed accurately.

There is also a great chance that government will assist businesses with positively contributing to this end goal, by providing government funded opportunities. We can expect encouragement for all to join this energy transition, regardless of sector, possibly through wind and solar projects, storage such as pumped hydro and battery energy storage systems and hydrogen as well. 

If your business requires greater guidance and clarity in relation to these climate developments, contact one of our expert lawyers for advice. You can connect with us on 03 8691 3111 or by sending us an email at hello@alliedlegal.com.au.