Australia: The Victorian Climate Change Bill 2010

In our recent edition of Legally Green, we set out the content of Victoria's Climate Change White Paper. This legal update provides more detail on the implementing legislation, namely the Climate Change Bill 2010.

The Climate Change Bill encompasses a range of different approaches to dealing with climate change: traditional "command and control" regulation, a change to the criteria to be applied when making particular (existing) decisions, market-supporting measures around carbon sequestration rights and measures to support collaboration with communities and business groups working to address climate change. Statements without specific legal consequences also make up a significant part of the Bill.


The preamble to the Climate Change Bill is a strong statement of acceptance of the evidence of human-induced climate change, the importance of climate change to humankind generally and to Victorians specifically, the need for climate change to be addressed by multiple actors (government, community and business), the need for and desirability of early action and the need for national coordination.

The policy objectives and guiding principles included in the Bill are also strong statements about what is desired to be achieved in terms of Victoria's response to climate change, and the principles that should guide decision making about climate change responses: informed decision making, integrated decision making, risk management, complementarity (with other climate change initiatives), equity and community engagement.

It is important that the Victorian Government has made these statements; a detailed, formal acknowledgment by a legislature of climate change, its implications and the manner in which the challenges of climate change should be addressed is not to be taken lightly.

These statements - the preamble, the objectives and the principles - are however, in legal terms, despite being in a bill, more statements than 'law'. The preamble is just a statement, and purports to be nothing more. The Government of Victoria "will endeavour to ensure" that its climate change policy has regard to the objectives, where relevant. The Minister administering the Climate Change Act "must have regard to" the guiding principles only when making decisions under the Act about adaptation plans, reporting and entering into (with the Premier) "climate change covenants". There are no enforcement mechanisms; there is not even a requirement to report on whether the objectives are being achieved or the principles being applied.

Regulating to reduce emissions and reporting on emissions

When it comes to the "headline act" - the commitment to reducing Victoria's greenhouse gas emissions to 20 per cent below 1990 levels by 2020 - the Minister is required to "ensure" that Victoria's greenhouse gas emissions are reduced.

While the Minister is not given any powers to take actions to achieve this target, the EPA's powers under the Environment Protection Act 1970 (EP Act) are boosted:

  • EPA is empowered to regulate to prohibit or regulate emissions and prescribe standards for emissions (including emission intensity standards and maximum levels of emissions). Notably, the EPA's powers, duties and functions are extended to include making recommendations to regulate the emission of substances to contribute to the target, as well as to reduce harm to the environment.
  • GHG substances are added to the definition of 'waste' under the EP Act, allowing EPA to use its waste powers in relation to emissions.

Any proposed regulations or policies will be subject to the regulatory impact statement process under the Subordinate Legislation Act 1994. It will be interesting to see how this process deals with proposed regulations given, for example, the generally accepted superiority, from an economics perspective, of 'market based instruments' (particularly a carbon price) to deal with GHG emissions.

The White Paper says that:

The Victorian Government commits to no new approvals being granted for new coal fired power stations based on conventional brown coal technologies. Through the Climate Change Bill we will set a target emission level of 0.8 tonnes of C02 equivalent (per MWh) for new power stations – bettering the performance of black coal stations and broadly comparable to the performance of open cycle gas (page 13).

The Bill does not however itself set the target emission level; it enables a target to be set. The White Paper also says that:

The Victorian Government will reserve the right to consider regulating emissions from existing brown coal-fired electricity generators if agreement on a phase down cannot be negotiated and a national carbon price is not in place (page 13).

In addition to the EPA's powers to pursue GHG emissions reductions, a statutory requirement for reporting on GHG emissions will create an imperative for the government to do something so that it can report 'good news' (and is not obliged to report 'bad news'). The first report is due by the end of 2011, with biennial reporting after that.

Adaptation planning

The Bill requires the Minister to prepare a Climate Change Adaptation Plan for Victoria every four years, with the first plan due by the end of 2012. The Plan sounds like what many might have expected of the Climate Change White Paper: an assessment of the risks of climate change and a statement of government priorities and strategic responses. For those dealing with climate change on the front line, such as developers and local governments along the coast, a commitment to prepare a plan with strategic responses, which then has to be implemented in unspecified ways with unspecified funding, may not be particularly reassuring or helpful.

What the Bill does do is ensure that the Climate Change Adaptation Plan for Victoria will be updated regularly. This will help to overcome a natural tendency of governments to leave hard issues on the shelf. It will also mean that there will be reporting on implementation and effectiveness of the plan, which is another matter that is sometimes easier for governments to ignore. This statutory framework should therefore prove to be valuable going into the future.

Considering climate change in decision making

Changing the criteria that must be considered when making a decision can have a strong effect on the decision made. The Climate Change Bill requires those making specified decisions under specified legislation to consider climate change in the senses of both the impacts of climate change (e.g. sea level rise) and contributions to GHG emissions.

Which decisions?

The range of decisions to which the obligation to consider climate change applies is limited to specified decisions made under a selection of mostly "environmental" legislation:

  • Catchment and Land Protection Act 1994
  • Coastal Management Act 1995
  • Environment Protection Act 1970
  • Flora and Fauna Guarantee Act 1988
  • Public Health and Wellbeing Act 2008
  • Water Act 1989

Within these specified acts, only specified decisions are subject to the obligation to consider climate change. For example, the Bill requires the Minister considering a draft Sustainable Water Strategy under the Water Act 1989 to consider climate change, but does not require a water authority deciding on the grant of a groundwater licence under that Act to consider climate change. This is despite the fact that the Victorian Civil and Administrative Tribunal (VCAT) has already held that a water authority in this circumstance must consider climate change: Alanvale Pty Ltd & Anor v Southern Rural Water & Ors [2010] VCAT 480. It may be that the consideration of climate change in strategic decision making leads to climate change issues being 'trickled down' to other decisions, but, at least for now, there are significant gaps.

No decisions under energy and resources legislation are subject to the obligation to consider climate change, nor are any decisions under the Planning & Environment Act 1987 (P&E Act). As with the Water Act, VCAT has already required some decision makers under the P&E Act to consider climate change: Gippsland Coastal Board v South Gippsland Shire Council [2008] VCAT 1545. It is notable that the consultation draft Planning and Environment Amendment (General) Bill does not introduce specific climate change-related objectives of the P&E Act (which are key decision making criteria under that Act) despite making significant changes to those objectives.

There is provision for additional decisions under the specified legislation to, by regulation, be subjected to the requirement to consider climate change, but the Climate Change Act would have to be amended to specify additional pieces of legislation.

What does it mean to consider climate change?

One of the challenges for a government decision maker subject to the obligation to consider climate change is to know how to do this. For example, how does a decision maker consider long-term issues 'today', and how should trade-offs between climate change imperatives and other pressures (such as affordability) be made? The Bill provides for guidance to be made by the Minister, and requires regard to be had to the guidance. This guidance will be of critical importance.

What happens if climate change isn't considered?

The Bill relies on those making the specified decisions, who are all government actors such as authorities and Ministers, to do as they are bid. There is only limited potential for direct enforcement of obligations to consider climate change by members of the public who wish to hold the government to its word.

The obligation to consider climate change might be enforceable if the obligation applies to the making of the decision that could be reviewed in some way by the courts or the Victorian Civil & Administrative Tribunal. However, most of the specified decisions are high-level, relating to the making of plans and strategies and not directly affecting individual rights. This course of action will therefore not be generally available.

The Bill also amends the Transport Integration Act 2010 to include climate change in the 'environmental sustainability transport system objective' to which decision makers under that Act are required to have regard. Again, there is little potential for direct enforcement: the Transport Integration Act specifically states that the Parliament does not intend that the transport system objectives create in any person any legal right or to give rise to any civil cause of action.

Again therefore the commitments in the Bill are, although clearly a symbolically important step, less potent than they initially sounded.

Carbon and forestry rights

The Climate Change Bill repeals the Forestry Rights Act 1996 and establishes a new regime for forestry and carbon rights.

The Bill divides "forest carbon rights" into (roughly) rights to carbon in the ground, rights to carbon in vegetation, and rights to deal with vegetation. It then makes forest carbon rights interests in land and creates a system for the creation, registration and transfer of these rights, as well as for a system of 'Forestry and Carbon Management Agreements' to manage the land and vegetation (e.g. harvesting decisions). These agreements can impose positive and negative obligations and can be recorded on title. Recording results in the agreements running with the land and binding future owners. VCAT is given jurisdiction in relation to the enforcement of and ending of agreements.

This regime builds significantly on the previous system in the Forestry Rights Act, which provided for forestry rights and carbon rights (in vegetation only) but was a far less comprehensive regime. The new regime will give carbon rights more security, and provide important support for any markets in offsets (such as those previously envisaged by the Carbon Pollution Reduction Scheme).

The Bill also includes a separate regime for carbon rights on Crown land. It is not however clear how much or which Crown land will be available to be used for carbon sequestration. The only guidance provided on what land might be declared to be available is the suitability of the land and the use of the land for carbon sequestration not being "contrary to the public interest".

Climate covenants and climate communities

The Climate Change Bill amends the EP Act to allow the Minister administering the Climate Change Act and the Premier to enter into 'climate covenants'. The covenants are voluntary, and there are only loose criteria in relation to what kind of agreement might qualify as a covenant. Other than some minimal requirements (such as requiring performance beyond that already required by law, and publication of the covenant), the covenant provisions of the Bill do not appear to 'do' anything significant from a legal perspective – they do not allow, prohibit or require anything notable. The covenants will not, for example, be enforceable under the Act (although they could potentially be enforceable on their own terms).

The Climate Change Bill also renames the existing 'sustainability fund' under the EP Act, which is funded by landfill levies, to the 'Climate Communities Fund', and allows the fund to be used to make payments for the purposes of fostering community action or innovation in relation to the reduction of GHG emissions emission or adaptation or adjustment to climate change in Victoria.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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