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Chapter 4: Performance

Chapter 4 describes the Climate Change Authority’s performance in achieving the deliverables against the key performance indicators for Program 1.1: Reviewing Climate Change Mitigation Policies, as published in the Climate Change Authority Budget Statement for 2013–14.

Box 2: Program 1.1 Reviewing Climate Change Mitigation Policies

Program objective: The Authority’s primary objective is to provide expert independent advice on the government’s climate change mitigation initiatives.

Deliverables

  • Complete first review of progress towards Australia’s national emissions reduction targets.
  • Complete caps and targets review, which will recommend pollution caps for 2015–16 to 2019–20, a national trajectory and a carbon budget.
  • Complete other reviews as requested by the minister or parliament.

Key performance indicators

  • The quality of reviews, including their reception by stakeholders and use in public policy forums and discussions.
  • The delivery of reviews within legislated time frames.
  • The transparency and accessibility of the public consultation processes for reviews, including that they are highly regarded by stakeholders.
  • The independence of the Authority’s decision-making in conducting and completing reviews, including the perception of independence by stakeholders.

4.1 Targets and Progress Review

4.1.1 Legislative Requirements of the Targets and Progress Review

The Targets and Progress Review covers two legislative requirements under the Clean Energy Act 2011, which require the Authority to:

  • make recommendations about Australia’s emissions reduction goals, including specifically an indicative national emissions trajectory, and national carbon budget and carbon pollution caps (section 289); and
  • report on Australia’s progress in achieving its medium and long-term emissions reduction targets, as well as progress to meeting a national emissions budget (section 291).

The Authority was required to have regard to a number of matters in conducting these reviews, which are set out under section 289.

4.1.2 Conduct of the Review

The Authority has a legislative requirement to undertake public consultation as part of its reviews (section 289 of the Clean Energy Act 2011). The Authority consulted with a wide range of stakeholders throughout the course of the review. This included electricity retailers, industry associations, academics and non-government organisations. As part of the review, the Authority also collaborated with other government departments including Treasury and the Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education on the modelling undertaken.

In April 2013, the Authority released an issues paper as part of the consultation process. Feedback from stakeholders was sought on specific issues, and the Authority received about 70 submissions from individuals and organisations.

In October 2013, the Authority released a draft report. As part of this release, and to promote transparency and public scrutiny, its modelling was made publicly available on its website. Over 130 stakeholder submissions were received from individuals and organisations. In response to a GetUp! Campaign, the Authority also received a further 12,000 public submissions to the report. The Authority convened four stakeholder roundtables: two in Melbourne and one each in Sydney and Canberra. A public webinar was held on 13 November 2013.

4.1.3 Key Findings Presented to Government

The Authority provided the Reducing Australia’s Greenhouse Gas Emissions—Targets and Progress Review, Final Report to the Minister for the Environment on 27 February 2014. It recommended a coordinated set of goals for Australia:

  • 2020 goals, providing a clear course for short-term action:
    • a minimum 2020 target of 15 per cent below 2000 levels
    • using Australia’s carryover under the Kyoto Protocol to raise the 2020 target by 4 percentage points, giving an effective target of 19 per cent
    • an indicative trajectory consistent with 19 per cent and an emissions budget of 4,193 Mt CO2-e for the period 2013–20.
  • Beyond 2020, guidance for longer term planning and investment, subject to periodic review in light of new information:
    • a trajectory range for emissions reductions of between 40 and 60 per cent below 2000 levels by 2030
    • a national emissions budget for 2013–50 of 10,100 Mt CO2-e, based on what might be considered Australia’s fair share of a global emissions budget.
  • Recommended caps for each of the first five years of the flexible-price period under the carbon pricing mechanism that are consistent with its 2020 target recommendations:
Year Cap (Mt CO2-e)

2015–16

234

2016–17

228

2017–18

222

2018–19

215

2019–20

209

The Minister tabled the Authority’s report in the House of Representatives on 13 May 2014.

The Targets and Progress Review Final Report received widespread coverage in the print and online media. Authority Chair Bernie Fraser held a press conference at Parliament House on 27 February 2014 and addressed the National Press Club on 13 March 2014. Authority CEO Anthea Harris hosted a webinar highlighting the report’s key findings in late March. There were also numerous conference presentations and government and non-government briefings on the report.

The government was due to respond to the report by the end of August 2014; however, since the repeal of the Clean Energy Act 2011, this obligation has been removed.

4.1.4 Performance Against Key Performance Indicators

Following is an assessment of the Climate Change Authority’s performance in conducting the Targets and Progress Review against the key performance indicators from the Industry, Innovation, Climate Change, Science, Research and Tertiary Education Portfolio Budget Statements 2013–14.

  1. The quality of reviews, including their reception by stakeholders and use in public policy forums and discussions.
    • In conducting the Targets and Progress Review, the Authority undertook rigorous research and analysis, including commissioning economic modelling from The Treasury and conducting extensive stakeholder consultation, to ensure it developed well-informed and evidence-based recommendations.
    • The Authority’s recommendations have been widely acknowledged and understood by stakeholders. The recommendations have received extensive media coverage, and are quoted in media articles and discussions about Australia’s emissions reductions target scheme.
  2. The delivery of reviews within legislated time frames.
    • The Authority delivered the Targets and Progress Review Final Report to the Minister for the Environment on 27 February 2014, which was within the legislated time frame of 28 February 2014.
  3. The transparency and accessibility of the public consultation processes for reviews, including that they are highly regarded by stakeholders.
    • The Authority conducted extensive public consultation during the course of the review. An issues paper and a discussion paper were both released, which called for submissions from the public. The Authority also held a number of roundtable consultation events and one-on-one meetings with stakeholders. The Authority considered the number of submissions, 70 for the issues paper and over 130 for the draft report, to be a validation of the transparency and accessibility of the process. The Authority also received over 12,000 online submissions as part of an online campaign started by GetUp! The feedback on the consultation process, which included targeted stakeholder meetings, roundtable discussions and presentations, was positive.
  4. The independence of the Authority‘s decision-making in conducting and completing reviews, including the perception of independence by stakeholders.
    • In conducting the Targets and Progress Review, the Authority acted independently, ensuring its final recommendations were supported by extensive and rigorous research and analysis. The transparency of the review process, through regular public consultations and engagement, further illustrated the Authority’s independent conduct.

4.2 Other Reviews as Requested by the Minister or Parliament

Under section 59 of the Climate Change Authority Act 2011 (Cth), the Minister for the Environment or the parliament may request reviews of matters relating to climate change.

The Authority did not receive any requests from the minister or parliament in 2013–14.

4.3 Research About Matters Relating to Climate Change

Under section 11 of the Climate Change Authority Act 2011 (Cth), one of the Authority’s principal functions is to conduct research about matters relating to climate change.

As part of its work program following the release of the Targets and Progress Review Final Report, the Authority commenced work on three separate papers, each dedicated to researching climate change mitigation efforts.

4.3.1 Carbon Farming Initiative (CFI) Study

The Authority released a paper investigating the experiences of Australian and international baseline and credit schemes, and highlighting key lessons for the development of the government’s ERF. Significant findings included that broad coverage provides access to the widest range of low-cost opportunities, but in practice most emissions reductions are likely to rise from the energy and industrial sectors. Baseline and credit schemes do not suit all emissions reduction opportunities. Additionality tests are important, while baseline-setting will be one of the major administrative and costly elements of the ERF.

4.3.2 International Climate Action

The Authority considers that strong international action to reduce emissions is in every country’s interest, including Australia’s. The international community is in the process of negotiating a post-2020 framework for global climate action. This includes negotiations in Paris in 2015. International Climate Action—Priorities for the Next Agreement explored those elements of a post-2020 framework that help reduce emissions and accelerate efforts to avoid warming of more than 2 degrees celsius (above pre-industrial levels).

Key conclusions of this research included the importance of:

  • maintaining the collective 2-degrees goal
  • setting emissions reductions targets
  • tracking emissions and progress
  • establishing international emissions markets
  • assessing collective and individual action
  • encouraging countries to review and ratchet-up efforts over time
  • finalising the legal form of any post-2020 agreement.

Australia has a strong interest in a successful outcome to the current negotiations. It could set targets to make a transparent and fair contribution to the collective goal.

As part of its research, the Authority consulted with a broad range of domestic and international stakeholders, including government agencies, academics, business and non-government organisations. The paper was presented to the Minister for the Environment on 22 June 2014 and published on the Authority’s website on 23 June 2014. The Authority was invited to present its work at a number of events and this paper has generally been well received as a positive contribution to the international discussion.

4.3.3 Light Vehicle Emissions Standards

In investigating opportunities to reduce Australia’s emissions and help achieve its emissions reductions goals, the Targets and Progress Review noted that the transport sector is a significant and growing source of emissions. It accounts for 16 per cent of Australia’s emissions; light vehicles alone account for 10 per cent.

One of the Targets and Progress Review’s recommendations was that the government investigate the near-term introduction of fleet-average CO2 emissions standards for light vehicles in Australia as a way to secure significant emissions reductions and related co-benefits. Light Vehicle Emissions Standards for Australia provided further analysis of this policy, demonstrating that standards are a cost-effective way to reduce Australia’s greenhouse gas emissions and light vehicle fuel use. The paper notes that standards should be designed to maximise benefits and minimise costs; and, if introduced soon, could improve the efficiency of almost half of the Australian fleet by 2025.

The Authority consulted with a range of stakeholders, including automotive industry groups, motoring associations and relevant government agencies—such as the National Transport Commission and the National Roads and Motorists Association. It presented the paper to the Minister for the Environment on 26 June 2014, and it was published on the Authority’s website on the same date. ClimateWorks Australia hosted an event for the paper’s publication showcasing the Authority’s key findings.

4.3.4 Using International Units to Help Meet Australia’s Targets

In its Targets and Progress Review, the Authority recommended that Australia should aim to reduce its emissions in 2020 by more than the current minimum target of 5 per cent compared with 2000 levels. It also recommended that international units should be used to complement domestic measures to achieve whatever 2020 target Australia settles on.

Using International Units to Help Meet Australia’s Emissions Reduction Targets builds on this previous work. The paper provides detailed information on the practicalities of using international units and examines a range of different types of units available in the market that could meet Australia’s needs at very low prices. Using international units would be relatively straightforward to implement and not very resource-intensive. The Authority argues that international trade in emissions reductions has a legitimate place in reducing greenhouse gas emissions, and can be seen as an environmentally sound and cost-effective complement to domestic emissions reductions for Australia.

The Authority consulted with a wide range of stakeholders, including foreign governments, brokers and markets analysts, and relevant government agencies during the course of its research. It published the paper on its website on 7 July 2014.