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The Climate Change (Net Zero Future) Bill 2023 was recently assented by the New South Wales Parliament on Monday 11 Dec 2023.
This marks a significant step in the state's efforts to combat climate change and progress towards sustainable development. This landmark legislation was introduced by the Minns Labor government and received multi-party support, reflecting a strong consensus on the urgency of climate action.
Key elements of the Climate Change (Net Zero Future) Bill include ambitious targets for reducing greenhouse gas emissions. The state commits to:
- 50% reduction by 2030 in greenhouse gas emissions compared to 2005 levels
- 70% reduction by 2035 compared to 2005 levels
- with the ultimate goal of achieving net-zero emissions by 2050.
These targets are not just aspirational but are now enshrined in law, demonstrating the government's dedication to real and measurable progress in climate action.
Key elements of the Climate Change (Net Zero Future) Bill include:
- Purpose and Objects: Aligns with the 2015 Paris Agreement, acknowledging the urgency of climate action and the need for a sustainable future for NSW.
- Guiding Principles: Emphasises early action, fiscal responsibility, sustainable economic growth, consideration of rural and regional impacts, environmental health, and the inclusion of Aboriginal and local community perspectives.
- Emission Reduction Targets: Sets specific goals for reducing net greenhouse gas emissions by 50% by 2030, 70% by 2035, and achieving net-zero emissions by 2050, from 2005 levels.
- Net Zero Commission: Establishes a commission to monitor, review, and report on progress, offering advice and recommendations.
- Reporting and Accountability: Includes provisions for annual reports, Ministerial responsibilities, and obligations for government agencies to support the Commission's work.
- Legal Framework: Details the Act's relationship with other laws, information disclosure, and protection from personal liability for those involved in implementing the Act.
- Review and Regulations: Outlines procedures for reviewing the Act's effectiveness and the ability to make necessary regulations.
How will Climate Change (Net Zero Future) Bill 2023 impact business in NSW?
The Climate Change (Net Zero Future) Bill 2023 is expected to have a significant impact on businesses in New South Wales. The bill aims to reduce greenhouse gas emissions by at least 50% by 2030 and reach net zero by 2050.
This transition to a low-carbon economy is expected to draw billions of dollars in private investments, alleviate the cost of energy for households and businesses, and create numerous job opportunities, with a significant focus on regional areas.
However, the bill will require businesses to reduce their carbon footprint and adopt sustainable practices as part of key areas for decarbonisation.
Legislating 2030 and 2050 targets and creating an independent Net Zero Commission fulfils a commitment to the people of NSW that the government will take action to reduce greenhouse gas emissions and continue the renewable transformation of our energy system.
- Minister for Climate Change, Energy and the Environment Penny Sharpe
Businesses will need to invest in renewable energy, energy-efficient technologies, and other measures to reduce their greenhouse gas emissions2. The bill will also provide opportunities for businesses to participate in the transition to a low-carbon economy and benefit from the growth of the renewable energy sector.
The needs for business will now be added on top of their own decarbonisation strategies, sustainability reporting needs and greenwashing principles by the ACCC.
The bill also establishes an independent Net Zero Commission to oversee the implementation of the targets and objectives.
Monitoring of the bill by Net Zero Commission
Net Zero Commission will play a crucial role in monitoring, reviewing, and reporting on the state's progress towards its emission reduction targets. It will act as a transparent and authoritative voice in ensuring that the government stays on track to meet its commitments. The Net Zero Commission will be a strong, independent, expert body to monitor the state's progress to net zero. It will report annually to ensure parliamentary transparency and accountability
[...] we're delivering on our election promises to legislate emissions reduction targets and set up the independent Net Zero Commission.
- NSW Premier Chris Minns
Investment to support decarbonisation of NSW
The NSW Government is not only setting robust targets but also investing significantly in initiatives to achieve these goals. These include a $1.8 billion investment in renewable energy infrastructure, transmission, and storage, and the creation of a new Department for Climate Change, Energy, Environment, and Water. These initiatives are aimed at driving down emissions from waste and bolstering the transition to a renewable energy economy.
The legislation is expected to bring economic benefits as well, particularly in the form of private investment in renewable energy. This transition is anticipated to lower power bills for households and businesses, generate thousands of jobs (most in regional areas), and foster Australian manufacturing in the energy sector.
Minister for Climate Change, Energy and the Environment Penny Sharpe highlighted the dual nature of climate change as an environmental challenge and an economic opportunity. The Bill provides certainty for industry, business, and investors, showing that they are not alone in addressing this global challenge. Sharpe also emphasised the importance of multi-party support in passing this Bill, demonstrating Labor's ability to build consensus and deliver on key election promises.
How does NSW net zero targets compare to other Australian states and territories
Every state and territory government in Australia has now pledged to achieve net zero emissions by 2050, or even sooner. This commitment encompasses all types of emissions within the nation's borders.
Additionally, most states and territories have set their own interim targets for emissions reduction. When these interim goals are combined, they amount to a projected decrease in emissions of about 37-42% from 2005 levels across Australia by the year 2030.
Although this falls short of the ideal target, it still surpasses Australia's commitment under the Paris Agreement, which aimed for a reduction of 26-28% below 2005 levels by 2030.
Victoria
Victoria was one of the first jurisdictions in the world to put a net-zero emissions target in law. The Government brought forward the commitment to achieve net-zero from 2050 to 2045.
Victoria beat its first target - to reduce emissions 15-20% below 2005 levels by 2020 – with a cut of almost 30%.
Building on this success, the Victorian Government has set targets that provide a clear path to net-zero emissions:
- 28-33% by 2025
- 45-50% by 2030
- 75-80% by 2035.
- The targets for 2040 will be decided in 2028.
Victoria’s targets are all reductions below 2005 emissions levels.
Queensland
Queensland has committed to achieving net zero emissions by 2050, with an interim target to reduce emissions by 30% below 2005 levels by 2030.
Tasmania
Tasmania’s emissions reduction target is to achieve net zero greenhouse gas emissions, or lower, in Tasmania from 30 June 2030. This is the most ambitious targets of all states
Impact on NSW Climate Resilience Strategy
Further, the Bill sets forth guiding principles to address climate change and commits to making NSW more resilient to its impacts. This includes adapting to the increasing severity of extreme weather events, which pose risks to health, the environment, and the economy.
The Net Zero commission will also have the role of monitoring and to provide advice and recommendations to the Minister on, progress about the adaptation objective in New South Wales.
“These laws are a down payment on securing the future for the people of NSW. Climate change is already costing NSW through more frequent and more extreme weather events, droughts, floods and other disasters.
-Minister for Climate Change, Energy and the Environment Penny Sharpe
This will be a continuation of the National Climate Resilience and Adaptation Strategy designed to support governments, communities and businesses to better adapt, recognising that adaptation is a shared responsibility that requires sustained and ongoing action. The Strategy operates across four domains — natural, built, social and economic — to drive forward adaptation.
In conclusion, the Climate Change (Net Zero Future) Bill 2023 is a comprehensive and forward-looking piece of legislation that sets NSW on a path towards a sustainable and resilient future, balancing environmental imperatives with economic opportunities. It represents a significant commitment by the NSW government to take meaningful action against climate change and lead the way in Australia's overall environmental policy.
The bill was introduced by Penny Sharpe and was referred to Portfolio Committee No. 7 - Planning and Environment for inquiry and report. The report was tabled on November 17, 20231. The bill commits New South Wales to cutting greenhouse gas emissions by at least 50% by 2030 and reaching net zero by 2050. The bill also establishes an independent Net Zero Commission to oversee the implementation of the targets and objectives1.
Link to Australia's path to Net Zero
In 2022, Australia implemented legislation to set specific greenhouse gas emission reduction targets. The country is on a path to achieve Net Zero emissions by the year 2050. A significant milestone in this journey is the 2030 target, where Australia aims to reduce emissions to 43% below the levels recorded in 2005. As part of this commitment, Australia is developing a comprehensive Net Zero plan, including setting emission reduction targets for 2035, to facilitate a smooth transition to a Net Zero economy.
Commitments
These efforts align with both Australia's international obligations and domestic commitments. As outlined in the 2022 Annual Climate Statement, Australia has pledged to develop a detailed plan for reaching Net Zero emissions by 2050. Under the Paris Agreement, of which Australia is a signatory, each party is required to update their Nationally Determined Contribution every five years. For Australia, this involves formulating a new medium-term emissions reduction target for 2035.
The Net Zero plan is anticipated to bring several benefits to Australia. It aims to optimize the advantages of the global shift towards Net Zero emissions. The plan will offer long-term policy certainty and is expected to stimulate investments in low emissions and renewable technologies, thus positioning Australia at the forefront of the sustainable and green technology sector.
Developing the plan and 2035 emissions reduction target
We will undertake a transparent, inclusive and coordinated approach to developing the plan. We will engage deeply, including with:
- First Nations
- community
- industry
- academia
- unions.
Sectoral plans
The Australian Government will develop 6 sectoral decarbonisation plans which, between them, cover all major components of the economy. These plans are:
- electricity and energy
- industry
- resources
- the built environment
- agriculture and land
- transport.
In line with Australia's longer term plans, the Climate Change (Net Zero Future) Bill 2023 is a landmark legislation that will help New South Wales transition to a low-carbon economy and mitigate the effects of climate change. The bill is a step towards a sustainable future and will help reduce the impact of climate change on the environment and society.
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