COP26 – The Australian Government’s Readiness to Date

0

Australia is a confirmed participant of COP26. To date, Australia has developed and implemented a series of climate change related policies that emphasize a shift from fossil fuels to renewable technologies.

Australia is a confirmed participant of COP26. To date, Australia has developed and implemented a series of climate change related policies that emphasize a shift from fossil fuels to renewable technologies.

Net Zero through the development of renewable or low-emission technologies

Australia is a signatory to the Paris Agreement and ratified its commitment on November 9, 2016.1

Under the Paris Agreement, in 2015, Australia first communicated its commitment in its Nationally Determined Contributions (NDCs) to reduce greenhouse gas emissions by 26-28% from to 2005 levels by 2030 and indicated that post-2030 targets can be communicated in its next NDCs. in 2025.2

The Australian government did not commit to Net Zero 2050, but defined Australia’s commitment to the IEA COP26 Net Zero Summit which was held on April 1, 2021 (Australian time) as follows:

The Australian government is strongly committed to achieving net zero as soon as possible and preferably by 2050.3

Noting the use of ‘preferably‘In the above statement, the Australian government’s position is that it has committed to achieving Net Zero, but not necessarily by 2050.

Current government policies are often formulated with reference to political goals of preserving economic prosperity, energy security or energy affordability. The policies aim to stimulate the rapid development of low-emission technologies, to bring these technologies to ‘cost parity with existing approaches‘.4 Simply put, through the development of renewable or low-emission technologies, they will become more and more competitive, and as a result, the economy will lead to increasing adoption over time.

Technology investment roadmap 2020

To this end, in 2020, the Australian government released its Technology Investment Roadmap (Roadmap), which reiterates that “The government will continue to invest in mature technologies where there is a clear market failure, such as a shortage of shipable production, or where these investments secure jobs in key industries.,5 and goes on to describe the strategies for investing in new technologies that should contribute to the transition to a low carbon economy.

The Roadmap clearly indicates that the government’s priority engine for change is and will be a framework for investment and incentives. The government expects to invest more than $ 18 billion in low-emission technologies over the decade to 2030.6 The research and development strategy recognizes that the private sector will play a key role in the large-scale deployment of the strategy.7 The government will seek to secure between $ 3 and $ 5 in new co-investments for every dollar invested, on average, in low-emission technologies.8

The government reiterated that its “regulatory approach will respect consumer choice and trust households and businesses to adopt new technologies as they approach parity. ‘9

The roadmap includes the following ‘extended targets’ for priority low-emission technologies, with $ 60 million in funding now allocated to research and development projects used to achieve these targets now set out in regulations under Australian law . Renewable Energy Agency Act 2011:

  1. Clean hydrogen at less than $ 2 per kilogram;
  2. Energy Storage – electricity from storage for firming less than $ 100 per MWh (this would firm wind and solar at a price equal to or lower than the current average wholesale price of electricity);
  3. Low Carbon Materials – low emission steel less than $ 900 per tonne; and low-emission aluminum of less than $ 2,700 per tonne;
  4. CCS – CO₂ compression, transport by hub and storage at less than $ 20 per tonne of CO₂; and
  5. Soil carbon measurement less than $ 3 per hectare per year.

International partnerships for low emission technologies

As part of the roadmap, Australia targets international partnerships that support the goals included in the roadmap, particularly in research, development and ‘deployment challenges for economically important and hard-to-reduce sectors‘.ten

Australia has entered into a Memorandum of Understanding with Singapore to advance cooperation on low-emission technologies and solutions, in particular in relation to: hydrogen, carbon capture use and storage, renewable energy trading, emission measurement, reporting and verification.11

Australia is also collaborating in the development of low emission technologies with the United States, Germany, Korea and the United Kingdom.12

Australian States and Territories Approach

Despite the absence of specific targets at the national level, each of the Australian states and territories has adopted its own approach to setting policy or targets for emissions reduction, energy efficiency and net zero, summarized in the table below:

Some states have developed or are in the process of developing adaptation and resilience plans, with risk assessments and decision guidance for specific sectors of the economy.

Disclosure obligations and directors’ duties

The Australian legal and financial landscape also increasingly expects companies to disclose the risks of climate change.

Although there are no specific regulations for the disclosure of climate-related risks in Australia, listed companies are required to report on their business strategies and outlook for the coming years in their annual report, including by regarding their significant business risks. This includes climate-related risks where they are important to the business. Companies listed on the Australian Securities Exchange are also recommended to disclose, on a “comply or explain” basis, their significant exposure to environmental and social risks.

Rising expectations regarding the disclosure of climate-related risks have also been reflected in a number of recent publications by Australian regulators. For example, earlier this year the Australian Prudential Regulation Authority released draft guidelines for banks, insurers and pension administrators on managing the financial risks of climate change. At the same time, the Australian Securities and Investments Commission has undertaken market surveillance to assess whether major Australian listed companies provide an appropriate level of disclosure regarding climate-related risks and whether public disclosures are affected by “greenwashing”. “, Either by exaggerating an organization’s commitment to reducing emissions, or indicating that products such as financial products are” greener “than can be objectively justified.

Against the background of clear guidance from regulators that companies should proactively consider potential climate-related risks, emphasis was also placed on the duties of directors with regard to climate change. While the duties of directors in Australia remain unchanged, the increasing disclosure and appreciation of climate-related risks has in turn raised the level expected of directors in exercising their duty of care and diligence. Specifically, when directors identify climate-related risks that are important to their business, they will need to take action to address those risks and, where possible, mitigate them.

Unlike some foreign jurisdictions, the duties of directors in Australia are due to the company (and not to its current shareholders). This typically requires considering the best interests of the business through the prism of the interests of its current and future shareholders as a whole, which responds to decision making that promotes the long-term sustainability of the business. This has been an important enabler for business investments in carbon transition activities and longer term climate commitments and strategies.

Developments expected before COP26

As November approaches, we expect the Australian government to issue further statements or policies regarding a long-term emissions reduction strategy. A number of members of the Australian government as well as opposition parties have called for specific and ambitious goals, including Net Zero 2050, but it is not clear that such policies will be supported and enacted by the Australian government. Our customers look forward to the release of these policies, which we look forward to


Source link

Share.

About Author

Leave A Reply