Climate Change Authority

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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

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 a review of the Renewable Energy Target by 31 December 2014.
  • Complete a review of the Carbon Farming Initiative by 31 December 2014.
  • Complete a draft report on emissions reduction targets for Australia for public consultation by 30 June 2015.

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 Renewable Energy Target review

4.1.1 Legislative requirements

The Renewable Energy (Electricity) Act 2000 and Climate Change Authority Act 2011 required that the Authority review the RET every two years. The Acts provided the Authority considerable discretion in the scope and conduct of the review. Since completion of the 2014 review, Parliament has amended the Acts; the Authority is no longer obliged to review the RET.

4.1.2 Conduct of the review

Uncertainty about the future of the Authority and staffing constraints meant that the RET review was conducted over a short time frame, but the Authority met the legislated deadline of 31 December 2014.
The Authority conducted a tightly focused review exploring the key issues of:

  • the feasibility and desirability of retaining the Large-scale Renewable Energy Target (LRET) at its then-legislated level
  • the future of the RET after 2020
  • exemptions for emissions-intensive, trade-exposed industries
  • the level of assistance for solar photovoltaic systems under the Small-scale Renewable Energy Scheme (SRES).

The Authority drew on the analysis and public consultations conducted for its 2012 RET review, as well as the 2014 review commissioned by the government and led by Mr Dick Warburton, AO, LVO (the Warburton Review). The Authority also invited interested stakeholders to provide additional input.

4.1.3 Key findings

The review, which was published on 22 December 2014, made two recommendations:

  • retain the level but defer the timing of the 2020 LRET target
  • consider increasing and expanding the RET beyond 2020, to sustain emissions reductions in the electricity sector over the longer term.

The Authority reviewed the changes in policy, investment levels and electricity demand outlook since its 2012 RET review, and found no compelling case to reduce the target. Nevertheless, the Authority considered that those developments warranted extending the time frame to achieve the target by up to three years. Reducing electricity sector emissions must remain a key focus for Australia over the coming decades if it is to play its part in global action on climate change. In the absence of effective alternatives, the Authority recommended the Government consider increasing and extending the RET targets, and expanding arrangements to cover a wider set of technologies.
The Authority also concluded that the RET's overall impact on electricity consumers was quite modest and that no changes to the SRES were warranted as it was to phase out shortly after the completion of the review. The Authority concluded further that the frequency of reviews should be changed from every two to every four years to reduce investment uncertainty, given the possibility of policy changes resulting from review recommendations.

4.1.4 Performance against key performance indicators

Following is an assessment of the Authority's performance in conducting the RET review:

  • The quality of reviews, including their reception by stakeholders and use in public policy forums and discussions.
    • The RET review was generally well received and attracted a reasonable level of discussion by stakeholders.
    • The Government noted the Authority's recommendations in its formal response to the review.
    • The Authority is currently examining post-2020 mitigation policies for the electricity sector, building on the conclusions and recommendations of the RET review. This work is generating strong interest among stakeholders and will inform the final report of the Authority's Special Review.
  • The delivery of reviews within legislated time frames.
    • The 2014 RET review was delivered on 22 December 2014, ahead of its statutory deadline of 31 December 2014.
  • The transparency and accessibility of the public consultation processes for reviews, including that they are highly regarded by stakeholders.
    • Consultation processes built on other public consultation on the RET held in 2014, including submissions to the Warburton Review. This minimised demands on stakeholders while ensuring they had opportunities to provide any additional views and input.
    • The Authority issued an open call for comment on its website, and an email alert to stakeholders that subscribe to its emailed newsletter. All submissions were published on the Authority's website. The Authority secretariat met with more than 20 stakeholders representing industry, environment and other interests.
    • Despite the tight time frames, no stakeholders raised concerns about consultation processes and some expressed thanks at the level of engagement.
    • The report and related analysis is available on the Authority's website.
  • The independence of the Authority‘s decision-making in conducting and completing reviews, including the perception of independence by stakeholders.
    • The Authority made its recommendations in accordance with its statutory principles after reviewing a large amount of evidence.
    • No stakeholders raised concerns about the independence of the Authority or its review.

4.2 Carbon Farming Initiative review

4.2.1 Legislative requirements

The Authority is required by the Carbon Credits (Carbon Farming Initiative) Act 2011 to review the CFI every three years. The first CFI review was completed in December 2014, which meant that the statutory deadline for the review was met.

4.2.2 Conduct of the review

Uncertainty about the future of the Authority and staffing constraints meant the CFI review was conducted over a short time frame. In addition, the CFI was being expanded to form the Emissions Reduction Fund (ERF) at the time. The Authority therefore focused on evaluating the performance of the CFI to date, and prospects for improvement under the ERF.
The Authority engaged with a range of stakeholders, including CFI participants and administrators, industry and environment groups. An issues paper was released in October 2014 - 17 formal submissions were received and the Authority met with 20 stakeholders individually. The Authority tested its preliminary conclusions with stakeholders at a roundtable meeting in late November 2014.

4.2.3 Key findings

The CFI review report was provided to the Minister for the Environment on 22 December 2014. The Authority's key findings included that:

  • the CFI achieved about 10 million tonnes of genuine emissions reductions, but participation was lower than it might have been, mainly due to policy uncertainty
  • the ERF makes some important improvements on the CFI; these should reduce costs and increase participation
  • the expansion and streamlining of the ERF introduces some new or expanded risks, particularly the possible crediting of emissions reductions that would have occurred without the scheme (known as ‘non-additional’ emissions reductions)
  • by itself and as (then) currently funded, the ERF is unlikely to deliver sufficient emissions reductions to achieve Australia's 2020 target of a 5 per cent reduction on 2000 levels.

The Authority made two recommendations:

  • consider introducing enhanced additionality tests for individual projects that generate a large volume of credits under the ERF
  • that the ongoing appropriateness of the ERF for achieving emissions reductions in particular situations be monitored and subject to independent and periodic review.

4.2.4 Performance against key performance indicators

The Authority's performance against key internal performance indicators:

  • The quality of reviews, including their reception by stakeholders and use in public policy forums and discussions.
    • The report benefited from input from a range of stakeholders and from information provided by the Clean Energy Regulator and the Department of the Environment.
    • The CFI review was generally well received and was fairly widely discussed by stakeholders.
    • The Government did not support the Authority's recommendation to consider enhanced additionality tests, and noted the recommendation to monitor and review the appropriateness of the ERF for achieving emissions reductions.
  • The delivery of reviews within legislated time frames.
    • The 2014 CFI review was delivered on 22 December 2014, ahead of its statutory deadline of 31 December 2014.
  • The transparency and accessibility of the public consultation processes for reviews, including that they are highly regarded by stakeholders.
    • The Authority consulted widely in the time available. Public submissions were published on the Authority's website. Given the competitive nature of the CFI market, some of the Authority's discussions with stakeholders were held on a confidential basis.
    • Several stakeholders expressed their appreciation for the opportunity to provide input and participate in the November roundtable.
    • The report and related analysis is available on the Authority's website.
  • The independence of the Authority‘s decision-making in conducting and completing reviews, including the perception of independence by stakeholders.
    • The Authority made its recommendations in accordance with its statutory principles after reviewing a large amount of evidence.

4.3 Special Review

4.3.1 Legislative requirements

On 10 December 2014, the Minister for the Environment requested that the Climate Change Authority conduct a review under section 59 of the Climate Change Authority Act 2011. The terms of reference for the Special Review require the Authority to assess whether Australia should have an emissions trading scheme and consider whether several key countries have trading schemes or similar policies, Australia's international climate commitments and Australian businesses' international competitiveness.
In the course of its Special Review, the Authority is required to publish three reports:

  1. A draft report on Australia's future emissions reduction targets - by 30 June 2015.
  2. A draft report on an emissions trading scheme - by 30 November 2015.
  3. A final report recommending what action Australia should take to implement the outcomes flowing from the Paris climate conference - by 30 June 2016.

In conducting the Special Review, the Authority is required to have regard to the terms of reference and the principles set out in section 12 of the Climate Change Authority Act 2011.

4.3.2 Conduct of the review

The Authority has completed the first stage and first report of the Special Review. On 17 February 2015, the Authority made a public call for comments on Australia's emissions reduction targets. It published a draft report with preliminary recommendations on 22 April and a final report on 2 July. The Authority also released a complementary publication, Comparing countries' emissions targets: a practical guide, on 27 March 2015.
The Authority consulted with a wide range of stakeholders in developing its recommendations on targets. It received 28 submissions, including from electricity retailers, industry associations, academics and non-government organisations. After publishing its draft report, the Authority tested its preliminary recommendations with key experts and stakeholders at three roundtable meetings in Canberra, Sydney and Melbourne. These submissions and discussions informed the Authority's final recommendations.
The draft and final reports received widespread coverage in the print and online media. The Authority's then-Chair Bernie Fraser held press briefings on the release of the draft and final reports. Acting CEO Shayleen Thompson presented the Authority's findings on Australia's emissions reduction targets at a Grattan Institute event on 29 April 2015.

4.3.3 Key findings

The Authority provided its final report on Australia's future emissions reduction targets to the Minister for the Environment on 2 July 2015. It recommended that at the upcoming Paris climate conference Australia commits to:

  • a 2025 target of 30 per cent below 2000 levels
  • further reductions by 2030 of between 40 and 60 per cent below 2000 levels.

The Authority confirmed its view that the determination of targets should give most weight to climate science, what comparable countries are doing, and what is in the best interests of current and future generations of Australians.

4.3.4 Performance against key performance indicators

Following is an assessment of the Authority's performance in conducting the Special Review:

  • The quality of reviews, including their reception by stakeholders and use in public policy forums and discussions.
    • The Authority undertook rigorous research and analysis to ensure it developed well-informed and evidence-based recommendations on Australia's future emissions reduction targets.
    • The practical guide to comparing countries' emissions targets set out the wide range of considerations and metrics used in public and policy discussions in a clear and accessible way. Stakeholders and media commentators used the guide to help explain and examine countries' national targets as they were announced.
    • The Authority's recommendations have been widely acknowledged and understood by stakeholders. The recommendations have received extensive media coverage, and are routinely quoted in media articles and discussions about Australia's targets.
  • The delivery of reviews within legislated time frames.
    • The draft report on targets was released for public consultation on 22 April 2015, ahead of the 30 June deadline set out in the terms of reference. The Authority released a final report on targets on 2 July 2015.
  • The transparency and accessibility of the public consultation processes for reviews, including that they are highly regarded by stakeholders.
    • The Authority issued a public call for comments on Australia's future emissions reduction targets in March 2015.
    • Following release of the draft report, the Authority held meetings with a wide range of experts and key stakeholders to test its views.
    • The Authority received positive feedback on its consultation processes, which included targeted stakeholder meetings, roundtable discussions and public presentations.
  • The independence of the Authority's decision-making in conducting and completing reviews, including the perception of independence by stakeholders.
    • In conducting the Special Review, the Authority has acted independently. Its final recommendations were supported by extensive and rigorous research and analysis.
    • Regular public consultation and stakeholder engagement enhanced the transparency of the review.