A Bill for an Act to set out Australia's greenhouse gas emissions reduction targets, to provide for annual climate change statements, to confer advisory functions on the Climate Change Authority, and for related purposes.
The Australian federal government’s landmark Climate Change legislation heralds sweeping changes in the way business is done in Australia, including the way companies operate, monitor and report their greenhouse gas emissions.
Once passed, the bill will become law and Australia will be bound to reduce its carbon emissions by 43% (based on 2005 levels) by 2030, and to reach net zero by 2050.
Under the law, the federal Environment Minister is required to report to Parliament annually on the country’s progress towards meeting these goals and the Climate Change Authority will work with the government to inform the setting of future goals.
The legislation will bring Australia into line with signatories of the Paris Agreement by providing a framework for dealing with climate change and signals a long-awaited new direction in federal government policy towards net zero emissions.
Set amid a backdrop of extreme weather events in Australia and around the world and a poor State of the Environment Report, the law recognises the need for action on the urgent risks threatening the stability of the Australian economy and is the first major step towards creating a policy and regulatory framework to meet these challenges.*
In many respects, the law is a ‘green reset’ for the way business operates in post-pandemic Australia, as we transition away from fossil fuels towards renewable energy. The initial impact of the law on business is likely to focus on the reduction of not just carbon emissions but all greenhouse gas emissions. It is anticipated that companies will be required to set yearly targets for greenhouse gas emissions, monitor their progress towards these goals and report on their efforts. Additionally, corporations will most likely be required to disclose the risk to their business from the impacts of climate change and their mitigation strategies. In its simplest form, the new law means businesses must work to reduce emissions and those of their customers and suppliers.
Australian business is well positioned to take advantage of the opportunities created by its low carbon transition, with the ‘green economy’ already thriving as demand for new sustainable goods and services continues to grow. Increasing digitization and clever ‘green tech’ will bring immense efficiencies for businesses as they strive to monitor and report on their emissions activities to ‘green’ their operations and create real value in their business offering.