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The Climate Change Authority today released its 2020 review of the Emissions Reduction Fund (ERF).

The ERF retains a central role within the Government’s suite of emissions reduction policies. It generates high integrity, low cost carbon offsets, supports voluntary abatement actions and provides a foundation for pursuing broader environmental, social and productivity benefits.

The Authority’s Chair, Dr Wendy Craik, said ‘The ERF has now been operating for six years and is maturing as a scheme. While Government purchasing had been subdued in recent years, auction results in 2020 suggest efforts by the Government and the Clean Energy Regulator to boost activity are paying off. These include the announcement last year of significant additional funding under the Climate Solutions Fund and the introduction of optional delivery contracts. The Authority also welcomes the announcement of additional funding for the Regulator to speed up ERF method development and project registration times.’  

The ERF has been successful in incentivising low cost abatement from the agriculture, land and waste sectors. Landholders are reaping the rewards of new income streams; Australia’s carbon services industry is growing, as is the voluntary market for Australian Carbon Credit Units (ACCUs) as more major emitters set emissions reduction targets. ACCUs meet the best international practice integrity principles for carbon credits and are recognised globally.

The Authority’s review builds on the Government’s response to the Report of the Expert Panel examining additional sources of low cost abatement (the King Review), which contains measures designed to boost ERF activity and reduce the costs of participating, as well as the Government’s first Low Emissions Technology Statement, which presents a vision of a prosperous Australia and focuses government investment on new and emerging technologies. It also builds on the Authority’s recent research reports, Prospering in a low-emissions world: An updated climate policy toolkit for Australia, which sets out how Australia can further develop its policies to take advantage of the opportunities of a global low-emissions economy and Economic recovery, resilience and prosperity after the coronavirus, which identifies measures that could contribute to a ‘triple-win' economic stimulus package in response to the economic impacts of COVID-19.

For this review, the Authority commissioned the CSIRO to analyse the risks that climate change poses to storing and maintaining carbon in the landscape under ERF methods. Dr Craik said ‘The Authority considers this work to be a vital step in understanding how the changing climate will affect our efforts to reduce emissions. It highlights risks are present and will continue to grow. The Authority recommends more work be undertaken to allow the Government and ERF participants to better understand and manage these risks.’

The Climate Change Authority is an independent statutory agency, established to provide expert advice on climate change policy. The Authority is required by legislation to review the ERF every three years. The ERF is an emissions reduction offsets scheme combined with Government purchasing of abatement, which has been accomplished to date through competitive reverse auctions.

The review report and the CSIRO risk analysis can be found at www.climatechangeauthority.gov.au.

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The Climate Change Authority today released a consultation paper on its review of the Emissions Reduction Fund (ERF).

The Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth) (CFI Act) covers the crediting and purchasing elements of the ERF. The CFI Act also requires the Authority to review the Act, regulations and other instruments made under the Act every three years.

The Chair of the Authority, Dr Wendy Craik said: “The Authority’s 2020 review will take into account the operation of the ERF and the changes made to it in the period since the Authority’s last review in 2017. It will consider the overall performance of the scheme as well as focus on three main themes -

• maintaining integrity and optimising governance
• managing risks to abatement, and  
• opportunities for enhancing outcomes.”

The Authority recognises the severe disruption caused by Covid-19 and acknowledges this may be a difficult time for some to contribute a submission. In order to assist, we are adopting a flexible approach to stakeholder engagement. The consultation paper provides options for providing input and is available at www.climatechangeauthority.gov.au

Your contributions are greatly valued by the Authority and will inform our final review report.

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The Climate Change Authority today released its report Prospering in a Low Emissions World: an updated climate policy toolkit for Australia. This report sets out how Australia can further develop its policies to ensure we make our contribution to the global task of reducing emissions, in both the short-term and long-term, and position Australia to take advantage of the opportunities of a global low-emissions economy.

Dr Wendy Craik, the Chair of the Climate Change Authority said, "Australians are already experiencing the effects of a variable and changing climate. 2019 was Australia’s warmest and driest year on record – a key factor driving this summer’s catastrophic bushfire season, which caused widespread loss and devastation to Australian communities, wildlife and natural ecosystems. At the same time Australians have endured a record severe and prolonged drought.

The case for countries to move quickly to reduce climate change and adopt measures to build our resilience has never been stronger. The good news is the global shift to low emissions presents many opportunities for Australia."

The report suggests how Australia can prosper in a low-emissions world due to our abundance of clean energy and already strong institutions and capabilities. As global demand for energy increases and countries move to lower emissions, there will be a growing demand for Australia’s clean energy resources and low emissions products. The report also points to the potential for emerging technologies and industries, such as hydrogen, to generate significant opportunities for Australia; and acknowledges the Government’s forthcoming Technology Roadmap to stimulate research and investment.

New areas of jobs and growth could open up in diverse economic sectors such as sustainable agriculture, new green-tech industries, environmental and financial services and climate resilient infrastructure.

In the report, the Authority updates its previous policy toolkit on economy-wide opportunities to reduce emissions for Australia to meet its Paris Agreement commitments. The report presents 35 recommendations to help transition Australia to a low emissions future, building on the Government’s current climate change policy settings to drive down emissions in the transport, industrial, electricity, agriculture and land, and waste sectors.

As well, the updated toolkit aims to empower businesses, governments, communities and families to take action to reduce their emissions and help them better prepare for the changes in our climate that are already locked in.

As an open economy Australia needs continued access to global markets which will be transitioning to low emissions goods and services The Authority emphasises that Australia’s future prosperity will be best served by participating in strong global action to reduce emissions and planning for and managing the impacts of the global transition. The updated toolkit seeks to provide a clear, long-term signal to businesses, investors and communities on the global transition to a net zero emissions world and to ensure the transition is well managed so new jobs and benefits flow to regions and communities.

"We need to position our economy for the coming changes in global trade and investment markets and seize on the opportunities before us, or risk being left behind," Dr Craik said.

Established in 2012, the Climate Change Authority provides independent expert advice to the Australian Government and Parliament on climate change policy. The Authority does this by conducting statutory and specifically commissioned reviews and by undertaking independent research and analysis.

The report can be found at www.climatechangeauthority.gov.au

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The Climate Change Authority today released a consultation paper on updating its previous advice to Government on policies to meet Australia’s greenhouse gas emissions reduction commitments under the Paris Agreement.

Since the Authority last provided its advice to Government on the policy toolkit required to meet the Paris Agreement, a number of developments have occurred in Australia and around the world in terms of climate change science, economics and policy.

The updated advice will seek to provide recommendations that ensure Australia is well-placed to meet its 2030 emissions target and that are consistent with meeting subsequent targets with enhanced ambition that put Australia on a path to net zero emissions, consistent with the Paris Agreement framework.

The Authority is particularly interested in:

• What aspects of the Authority’s previous recommendations remain valid and why?
• What are the opportunities and risks associated with the global transition to net zero emissions and how can Government assist the positioning of the Australian economy to take advantage of the opportunities and mitigate the risks?
• What are the barriers (regulatory and non-regulatory) to realising emissions reductions and are there any additional supporting policies, regulations or government actions that could drive emissions reductions in cost effective ways?
• What role should the Government play in enabling the development and uptake of low‑emissions technologies and development of associated industries?
• What role should international units and carryover from earlier commitment periods have in Australia’s response to climate change?

Stakeholder contributions will inform the Authority’s final report, which the Authority is aiming to release at the end of 2019. The Authority encourages submissions from interested individuals and organisations until 23 August 2019.

As part of the work to inform the forthcoming update of advice, the Authority has today also released a stocktake of drivers for, and actions by, industry to reduce greenhouse gas emissions in Australia, including new and emerging low emissions technologies.

The industry paper is one of a series of three stocktakes the Authority has released in 2019, which provide a summary of actions to mitigate emissions by governments and industry in Australia and taking place internationally. It is available at www.climatechangeauthority.gov.au.

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The Climate Change Authority today released its review of the National Greenhouse and Energy Reporting legislation. The National Greenhouse and Energy Reporting legislation establishes the National Greenhouse and Energy Reporting scheme, the safeguard mechanism and the framework for administration and compliance, including auditing requirements for these and other climate change policies.

The Authority found the legislation is working well, is meeting its objectives and is generally fit for purpose.

The Climate Change Authority Chair, Dr Wendy Craik, said ‘We heard from industry, governments and others that they find the information reported under the legislation to be useful, whether it be the Australian Government meeting its international reporting obligations, investors assessing climate risks, or businesses identifying energy efficiency opportunities.’

‘People we spoke to value the fact the reporting scheme is underpinned by robust methods, which provide a high-quality, nationally-consistent dataset.’

The Authority found the reporting scheme is widely considered to be a best-practice approach to measuring and reporting emissions and energy, and compares favourably to schemes in other countries. In its first year of operation (2016–17), all facilities covered by the safeguard kept their net emissions at or below their baselines. Facilities with safeguard obligations are generally comfortable with its operation and the options for meeting their baselines, however, many called for clarity around its future operation.

Although the Authority finds the legislation is meetings its objectives, there are opportunities for improvements to reduce costs and enhance administration of the legislation. Taken individually, each opportunity for improvement may be seen as incremental. Collectively, they can make an important contribution to building on the schemes’ strengths and improving their overall efficiency and effectiveness.

The Climate Change Authority is an independent statutory agency, established to provide expert advice on climate change policy. The Authority is required by legislation to review the National Greenhouse and Energy Reporting legislation by 31 December 2018 and then complete further reviews every five years.

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The Climate Change Authority today released a paper as a basis for consultation on its review of the operation of the National Greenhouse and Energy Reporting legislation.

The Chair of the Climate Change Authority, Dr Wendy Craik, said ‘Now that energy and emissions reporting has been in place for a decade, it’s a good opportunity to see how it is working and to consider if any improvements are needed.

‘The Authority is particularly interested in how the energy and emissions data is being used and whether the increased awareness of firms’ emissions and energy use has led to improvements in the way they are managed.’

Under the legislation, companies measure and report their greenhouse gas emissions and energy production and use. It covers around 800 companies and 60 per cent of Australia’s emissions. Some of this energy and emissions data is published online and used by companies, governments and other decision makers.

The legislation also underpins the safeguard mechanism, which places limits on emissions from facilities and provides a framework for companies to measure, report and manage their emissions.

The third component of the legislation is the greenhouse and energy auditing framework. This is an important part of the compliance regime applying to audits under the reporting scheme, the safeguard and other climate change policies such as the Emissions Reduction Fund and the Renewable Energy Target.

‘Stakeholder contributions will inform the Authority’s final review report, which is due by the end of this year’, Dr Craik said.

The Authority encourages submissions from interested individuals and organisations until 11 September 2018.

The Authority is required under the legislation to review its operation by 31 December 2018 and every five years after that. This is the first review of the legislation.

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The Climate Change Authority today released its review report on the National Wind Farm Commissioner.

The National Wind Farm Commissioner was appointed by the Australian Government in late 2015 in response to community concerns about wind farms. When the National Wind Farm Commissioner was established in 2015, the Government said it would review the role in 2018. The Authority’s review responds to that undertaking.

The Climate Change Authority Chair, Dr Wendy Craik said ‘In general, the National Wind Farm Commissioner has exceeded expectations in dealing with community complaints about wind farms.

The Authority recognises, however, that some stakeholders remain very unhappy with the outcome of their complaints to the Commissioner about wind farms – in many cases because of ongoing concerns about turbine noise and health impacts.

However, there isn’t much the Commissioner can do about wind farms that have already been approved – these are generally matters for state and local governments’, Dr Craik said.

The Authority found the Commissioner has made a number of best practice recommendations, which have improved the way the wind industry and governments work with affected communities.

In light of these findings and the ongoing growth in the wind industry in Australia, the Authority recommends that the role continue for a further three years.

The Authority also recommends that the Commissioner’s scope be expanded, with a modest increase in Australian Government funding, to include large scale solar and storage such as large scale batteries given their potential to cause community concerns.

The Authority recommends that the Commissioner’s role and funding be reviewed again in 2021 in light of the rapidly changing renewable energy industry in Australia.

With the goal of continuous improvement in mind, the Authority has recommended some enhancements to the accessibility and transparency of the Commissioner’s complaints handling services and measures to broaden public awareness of the role.

The Authority explored possible alternative funding models for the Commissioner (including an industry levy) but found the case for cost recovery is not compelling once administration costs are factored in.

The Climate Change Authority is an independent statutory agency, which provides expert advice to the Government on climate change policy. The Minister for the Environment and Energy, the Hon Josh Frydenberg MP, asked the Authority to conduct a special review of the role of the National Wind Farm Commissioner.

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The Climate Change Authority today released its research report on ways landholders can improve profitability, reduce greenhouse gas emissions and deliver broader environmental benefits at the same time. These objectives are known as multiple benefits.

For example, a farmer could establish a windbreak of native trees that leads to increased on-farm productivity, emissions reductions and helps native species.

Improving beef cattle herd management can reduce emissions, while increasing productivity. This can be achieved with feed additives, reducing unproductive animals in the herd and lowering the herd’s average age—in short getting stock off the land and to market sooner.

The Authority Chair, Wendy Craik said ‘We know farmers are already doing some great things on their land but we wanted to understand why it wasn’t even more widespread. We also wanted to see if there are some new ideas out there that could offer additional revenue streams to farmers and also help the environment.

It turns out that there is a range of barriers to multiple benefits on the land. Some relate to a lack of information, some relate to the costs of taking action (participating in government programs for example) and some types of action—like putting up windbreaks—require upfront capital, which can be hard to get’.

In a key finding, the Authority is recommending a new targeted investment fund be established to provide the necessary finance for farmers to invest in on-farm activities that deliver genuine multiple benefits.

The Authority is recommending a number of other approaches to drive genuine multiple benefits on the land including a voluntary online reporting tool to reduce costs; a new community of practice to coordinate policy; new Emissions Reduction Fund methods for projects with multiple benefits; and developing a standard to certify carbon credits that provide other benefits such as biodiversity.

The Climate Change Authority is an independent statutory agency, established to provide expert advice on climate change policy. In the final report of its 2016 Special Review into Australia’s climate goals and policies, the Authority recommended further research be done on the multiple benefits for farm profitability and the broader environment that could result from well-designed emissions reduction policies on the land. This report responds to that recommendation.

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The Climate Change Authority today released its review report on the Emissions Reduction Fund (ERF).

The Authority found that the ERF is performing well, creating incentives for new domestic emissions reductions at low cost that will contribute to Australia’s targets under the Paris Agreement. 

The Climate Change Authority Chair, Dr Wendy Craik said ‘In some ways, the ERF has surpassed expectations, contracting 189 million tonnes of emissions reductions over the last two or so years. We think it is a well-administered scheme and our recommendations are intended to enhance the ERF. We did not find any systemic problems’.

‘Investment by both Government and the private sector in ERF offsets, particularly for the land sector should be built on as part of the policy toolkit Australia needs to meet its Paris Agreement emissions reductions goals’ Dr Craik said.

The Authority found that the ERF has a range of checks and balances to bolster its environmental integrity. The independent, expert Emissions Reduction Assurance Committee plays a vital role as the gate-keeper of integrity standards, and the Committee’s method reviews are a key vehicle to ensure that emissions reductions remain robust as the scheme matures.

The Authority has recommended some new measures to help scheme participants become more aware of their obligations, and new tools to help the Clean Energy Regulator enforce breaches of the scheme.

The Authority also recommended new arrangements to enhance the effectiveness of ERF contracts and strengthen signals for new investment in ERF projects.

Stakeholders have highlighted some untapped opportunities for potential abatement on the land. To capture these, the Authority has recommended an enhanced process for method prioritisation and stakeholder engagement as well as new funds for research and development to deliver more domestic abatement.

The Climate Change Authority is an independent statutory agency, established to provide expert advice on climate change policy. The Authority is required by legislation to review the ERF every three years. The ERF is an emissions reduction offsets scheme combined with Government purchasing of abatement, which has been accomplished to date through competitive auctions.

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The Climate Change Authority today released a paper for consultation on its review of the Carbon Farming Initiative legislation, which governs the Emissions Reduction Fund.

The Chair of the Climate Change Authority, Dr Wendy Craik said: “The Authority is required to review the CFI legislation and the Emissions Reduction Fund every three years. The ERF has been in place for a while now so it’s a good opportunity to do a stock-take and see how it’s working."

The Authority looked at the role the ERF could play in helping to meet Australia’s Paris targets in its 2016 Special Review on Australia’s climate goals and policies and remains of the view that those findings are still current.

“Basically we said that the ERF should keep going until other emissions reduction policies like an Emissions Intensity Scheme or a Clean Energy Target and vehicle emissions standards are put in place.”

“The Authority does see a role into the future for the sort of offset crediting arrangements the ERF uses for the land sector.” Dr Craik said.

The key question for the Authority in this review is whether the ERF is being well administered and achieving its objectives.

Offsets need a clear and robust set of rules if they are to achieve genuine environmental outcomes but excessively restrictive rules and regulations can act as a barrier to participation.

The Authority’s CFI legislation review will examine whether current policy settings for the ERF have struck the right balance between the goals of market participation, administrative efficiency and environmental integrity.

The Authority is keen to understand if rules and processes for the ERF are working well for scheme participants and whether the scheme administrator, the Clean Energy Regulator, has enough of the right tools for the job of ensuring compliance with the scheme.

The Authority encourages submissions from individuals and organisations with an interest in the ERF and emissions reduction policy by 29 September 2017. Submissions on this paper will inform the Authority’s final review report on the ERF, which is due by 31 December 2017.

More information on the consultation is available here. 

Date: Wednesday, 30 August 2017

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Name: Aileen Muldoon

Agency: Climate Change Authority

Contact number: 0419 112 503