Hawker Britton Occasional Papers and Media

Your guide to the key policy initiatives for climate change, environment & sustainability in 2009

January 2009

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*By Murray Hogarth and Rob Griggs

This will be a landmark year for policy-making on the environment, climate change and sustainability. Activities at federal and also state/territory level in 2009 have far-reaching implications for the nation’s economy, society and natural environment, and will impact many business interests and communities.

This Hawker Britton occasional paper provides a summary of the key policy decision-making and review processes on the agenda for 2009 that relate to climate change and environmental sustainability. It is intended to assist businesses to identify areas where they may be impacted, positively or negatively, and to consider strategic responses.

The main areas addressed are:

  1. National Climate & Energy Policy – dominated in 2009 by the passage of legislation to introduce a national carbon trading scheme in mid-2010, but including the new Renewable Energy Target, a national energy efficiency strategy and a standard for carbon offsets
  2. Tax Reform – environmental sustainability has achieved unprecedented prominence in the current ‘root and branch’ review of Australia’s taxation system led by Treasury Secretary Ken Henry and reporting by the end of 2009
  3. National Environmental Regulation – the required 10-year review of the core national environmental law, the Environment Protection and Biodiversity Conservation Act 1999, is being done for the Rudd Government, reporting late in 2009; the Environment Protection and Heritage Council of state, territory and federal environment ministers is targeting waste and recycling, with a focus on product stewardship (and potentially a shift into extended producer responsibility, or EPR) this year; and a new ‘national waste strategy’ is being explored.
  4. State/Territory Initiatives - especially energy efficiency targets and schemes being introduced in 2009

1. NATIONAL CLIMATE & ENERGY POLICY

  1. Carbon Pollution Reduction Scheme (CPRS) – following the Green Paper in July 2008 and the White Paper last December, exposure draft legislation is expected late in February 2009, followed by further consultation in March, and then introduction of legislation into the Parliament in May (and likely extensive parliamentary scrutiny). For more information see an earlier Hawker Britton occasional paper at http://www.hawkerbritton.com/hawker-britton-media/federal-act/carbon-white-paper-real-politic-business-opportunities.htm or the CPRS Home Page at http://www.climatechange.gov.au/emissionstrading/index.html
  1. 20% by 2020 Renewable Energy Target (RET) – after a consultation paper in July 2008 from the COAG Working Group on Climate and Water, exposure draft legislation for the new RET (replacing the 2001 Mandatory Renewable Energy Target, or MRET) was released on December 23, 2008, and also a further consultation paper on the treatment of electricity-intensive, trade-exposed industries (EITEs) under the expanded national RET scheme. Responses to the exposure draft and EITE consultation paper must be made by February 13, 2009. COAG is scheduled to consider final RET details at its first meeting in 2009. For more information go to the RET Home Page at http://www.climatechange.gov.au/renewabletarget/index.html
  1. National Strategy for Energy Efficiency – In October 2008 COAG agreed to develop a National Strategy for Energy Efficiency, to accelerate energy efficiency efforts across all governments and to help households and businesses prepare for the introduction of the CPRS. Streamlined roles and responsibilities for energy efficiency policies and programs were to be agreed by end December 2008, and implementation of this Strategy to be finalised by June 2009. In November 2008 COAG agreed to defer this for consideration until ‘early 2009’ to ‘allow for a more informed strategy in consultation with industry’. See COAG communiqués at http://www.coag.gov.au/ and also the National Framework for Energy Efficiency at http://www.nfee.gov.au/home
  1. National Standard for Carbon Offsets – the Rudd Government advanced a 2007 election commitment by releasing its Department of Climate Change and Water discussion paper on a national standard for carbon offsets on December 23, 2008, and will be holding information sessions in February 2009. Submissions must be made by February 27, 2009, and for more information go to http://www.climatechange.gov.au/nav/carbon_offset.html 

2. TAX REFORM

Australia’s Future Taxation System (AFTS) - aka the ‘Henry Tax Review’, is headed by Treasury Secretary Dr. Ken Henry. The review is looking at the current tax system and will make recommendations to position Australia to deal with the demographic, social, economic and environmental challenges of the 21st century. AFTS released its consultation paper in December 2008 and is gearing up for its major public consultation phase starting in March 2009, with other stakeholder engagement running from January through to June.

Environmental issues were one of the main themes in the first round of submissions to the AFTS review, being run by a secretariat in Treasury, and one of the main areas for investigation is ‘climate change, the environment and sustainable economic growth’. Review areas with particular environmental relevance include transport and motor vehicles, existing environmental tax-transfer arrangements and new opportunities, and pricing of access to natural resources (both non-renewable and renewable). Submissions to the review can be made up until May 1, 2009, and a major two-day policy forum is expected to be held in June.  For more information and to see the consultation paper and early submissions go to http://taxreview.treasury.gov.au

3. ENVIRONMENTAL REGULATION

  1. Environment Protection and Biodiversity Conservation Act 1999 – A review of the EPBC Act is under way and will inevitably include consideration of a critical issue – extending the Act to include climate change, especially creating a ‘greenhouse trigger’ for application of the EPHC Act provisions e.g. to new mines, power stations, land clearing etc. Being conducted by Dr. Allan Hawke, the review took written submissions up until December 19, 2008, and will conduct public consultation in the first half of 2009. The Department of the Environment, Water, Heritage and the Arts is providing the secretariat. Dr. Hawke will provide his final report in October 2009. More information at http://www.environment.gov.au/epbc/review/index.html
  1. Environment Protection and Heritage Council (EPHC) – Product stewardship to drive recycling is a key theme for the EPHC ministers in 2009, in the broader context of a mooted ‘national waste strategy’. Consideration of a national deposit scheme for beverage containers is on the agenda, with potentially major ramifications for the co-regulatory National Packaging Covenant model established under the Howard Government (which itself is up for review ahead of any decision to extend it for a third 5-year period). A report on ‘e-waste’ such as televisions and computers also is being considered at the first meeting in 2009, expected around June, and plastic shopping bags are likely to continue to receive attention. Get more information at http://www.ephc.gov.au

4. State/Territory Initiatives

A number of energy efficiency schemes at state-level are starting in 2009 and will co-exist alongside the national carbon trading scheme, the CPRS. In addition Queensland, NSW and Victoria are all reviewing and updating their climate action plans. The rationale for the energy efficiency focus is that this will drive action that is not picked up by the CPRS and also can deliver benefits other than carbon emission reduction (e.g. direct energy saving including at peak times, averted infrastructure spending).

How these schemes develop and whether or not the Federal Government moves to expedite the development of a national energy efficiency target with tradable certificates (known internationally as ‘white certificates’) will be important issues. Current expectations are that the Federal Government’s policy agenda will be dominated by the CPRS and RET in this term and that a national energy efficiency target, which could overtake the various state ones, and a trading scheme for white certificates is unlikely before 2013-14. In the meantime, business faces challenges of complying with a number of different schemes across several jurisdictions. The relevant state-based schemes are:

  1. Victorian Energy Efficiency Target (VEET) – to be known publicly as the Energy Saver Incentive scheme, it began January 1, 2009
  2. Residential Energy Efficiency Scheme (REES, South Australia) – began January 1, 2009
  3. NSW Energy Efficiency Target (NEET) – originally scheduled to be begin January 1, 2009, but now re-scheduled to July 1, 2009
  4. Queensland’s ‘Q2’ carbon emission target is a one-third reduction per capita by 2020 through targeting car use and electricity consumption

* Rob Griggs (Associate) and Murray Hogarth (Consultant) advise Hawker Britton clients on public affairs strategies around climate change and sustainability. Rob has worked in senior positions in the NSW Premier’s Office and Public Service. Murray is formerly a Sydney Morning Herald environment editor and longtime corporate sustainability strategy adviser with Ecos Corporation.

Contact them on (02) 9279 0200 or by email - rgriggs@hawkerbritton.com and mhogarth@hawkerbritton.com

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