The Climate Change bill passes the House of Reps: what next?

Last week, the federal government passed its Climate Change Bill in the lower house. This bill makes into law Labor’s 2030 target of a 43% reduction in greenhouse gas emissions on 2005 levels.

While it’s not guaranteed to make it through the Senate yet, Federal Climate Change and Energy Minister, Chris Bowen, told Nine Network that he was “very very confident” the bill would pass and become law. The Greens have given the bill their support, meaning the government needs one more independent Senator to pass the bill. What does a 43% reduction mean for the climate?

According to Climate Analytics, a 43% reduction in emissions is consistent with 2°C of global warming, but not 1.5°C.

This brings it almost in line with the 2015 Paris Agreement goal of: “well below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels.” The target is almost compliant, although it has also been described as “totally inadequate.”

The Paris Agreement allows 2° C as the upper limit for global warming, but 1.5° as the more desirable goal. The difference between 1.5° and 2° of warming worldwide is significant: a 2° warmer world will be much more vulnerable to extreme weather, drought, and rising sea levels.

A reduction of 43% is the minimum amount permitted by the bill – emissions could be reduced further. The bill also includes provision for an annual climate change statement, prepared by the energy minister with advice from the independent Climate Change Authority.

Why did they choose 43%?

The 43% target rests on Labor’s Powering Australia plan, which – among other things – focuses on updating the electricity grid (Rewiring the Nation), incentivising electric vehicles (Driving the Nation), and updating the Safeguard Mechanism, which places limits on Australia’s largest greenhouse gas emitters.

“The 43 number comes from the modelling,” says Felicity Wade, from the Labor Environment Action Network.

“Chris Bowen came up with the key policy inputs, Safeguard Mechanism and Rewiring Australia as the two big ones, with various other bits and pieces as outlined in the Powering Australia policy released last December.

“And then these policies were modelled by Reputex for their emissions’ outcomes.”

“Fundamentally he started with policies that then delivered the target rather than the other way round of setting target then backfilling with policies.”

This means that a higher target would be achievable with more ambitious policies.

“It makes sense to think about the policies first then estimate the reduction they can achieve,” says John Quiggin, a professor of economics at the University of Queensland.

“But when the estimated reductions turn out to be totally inadequate, as in this case, the right response would have been to adopt stronger policies.”

Barriers to higher targets are largely social, rather than technical or economic. The Australian Energy Market Operator’s 2022 Integrated Systems plan has outlined ways in which emissions could be reduced further, all judged feasible by AEMO’s stakeholders. The CSIRO’s recent annual Gencost report found that solar and wind (and their storage) remain the cheapest energy sources in Australia.

“By limiting themselves to marginal variations on the previous government policy, Labour has ensured failure,” says Quiggin.

Labor took a slightly more ambitious 2030 target of a 45% reduction in emissions to the 2019 election, which it lost.

Could we be doing more?

The Paris Agreement, and this legislation, counts domestic emissions. This is arguably not the most significant metric for Australia in terms of our climate commitments, as we are the world’s third largest exporter of fossil fuels. A vast majority of fossil fuels need to stay in the ground for the world to meet the Paris targets.

The Labor Party didn’t bring any new policy on fossil fuel exports to the May election. This is in contrast to The Greens, who hold the balance of power in the Senate and have a policy of no new coal, oil or gas mines, plus no expansions on existing mines.

Greens leader Adam Bandt says the party would continue to push Labor on not allowing new fossil fuel export projects.

Now it’s through the House of Representatives, the bill will be the subject of a committee enquiry in the Senate, which is due to finish by the end of August.