Policy Brief: NSW Environmental Regulation Mechanism
I Background & Introduction
At the end of 2020, many major economies pledged to achieve Carbon Neutral by 2050. The European Union decided to use the European Climate Law as a benchmark to draft new legislation and require all member states to take necessary measures to achieve this goal. As a party of the UN Framework Convention on Climate Change and Paris Agreement on Climate Change, Australia has committed to reducing its Greenhouse Gas Emissions by 26 to 28 per cent below 2005 levels by 2030. At present, Australian states and many non-fossil energy suppliers have also expressed their efforts to achieve this goal. However, traditional energy still plays the role of dominator, and the realization of this goal is still challenging.
In order to meet the colossal challenge, and achieve this urgent and demanding goal, the Australian government has established several carbon market mechanisms. These carbon market mechanisms are currently very active and play a significant role in achieving carbon neutrality. While playing their roles, these mechanisms have enjoyed many legislative and policy preferences and have absorbed a large number of resources. They have advantages in the development process that are unmatched by traditional resource systems.
This policy brief will base on several existing Australian/NSW mechanisms, analyze their advantages and disadvantages by discussing their operating mechanisms, effects and impacts, and evaluate their functions on achieving carbon neutrality goals. Also, it will put forward some reform suggestions and recommendations, as well as explore and optimize the feasibility plan and model for the next stage.
II The Current Mainstream Mechanisms and Evaluation
1.Advocacy of Clean Energy
The first measure to reduce carbon emissions is to promote new energy sources-electricity as the primary source, supplemented by wind and solar energy.
Take NSW as an example. The NSW government has established multiple "renewable energy development zones" (Renewable Energy Zone/REZ) within the territory. The ultimate goal of these development zones is to replace old traditional energy power stations (such as coal mines Power stations). The other part of the plan is to connect wind and solar power generation equipment and energy storage equipment in the development zone in series to achieve unified management while producing economic scale, reducing costs and prices. According to current estimates, the electricity (12,000 MW) provided by the three "renewable energy development zones" (Orana, New England, and Illawarra) is sufficient to replace most thermal power stations. It can bring value to the areas mentioned above.207 100 million Australian dollars of private enterprise investment, and at least 5,000 jobs.
However, even if all power stations in Australia are converted into solar or wind power generation, it will still not achieve zero emissions before 2050 because there are still many sources of greenhouse gas emissions outside of power stations (the current annual emissions are approximately equal to 557 million tons of carbon dioxide). Taking ore mining as an example, greenhouse gases (carbonate minerals are naturally generated during the decomposition process) during mining, processing, refining, and transportation. According to statistics from the scientific journal Nature Geoscience in 2018, the carbon emissions generated by ore mining accounted for about 10% of the total global emissions.
The greenhouse gas produced by automobiles is mainly carbon dioxide (CO2), and Australia's achievements in reducing automobile emissions can be described as horrible. According to the Australian Environmental Protection Foundation (ACF) survey, major emission regions and countries such as the United States, Australia, China, the European Union and India have taken action since 2000 and achieved significant emissions reductions in 2017. Only Australia is far behind. According to the current progress, Australia can barely achieve an average carbon dioxide emissions of 250g per kilometre in 2030, while the leading European Union can achieve 125g per kilometre.
Although the total amount of greenhouse gases produced by the transportation industry and agriculture is almost the same (each accounting for 15% of the total), it is worth noting that the greenhouse gas produced by the transportation industry is mainly carbon dioxide. In contrast, the greenhouse gas produced by agriculture is methane and nitrous oxide. According to the Australian Department of Environment (ASOE) research, the long-term greenhouse effect of methane and nitrous oxide on the earth is even worse-21 times and 310 times that of carbon dioxide, respectively. There are many types of household emissions, which are difficult to compare with other industries. However, Australia's per capita greenhouse gas emissions (Emission per Capita) still far exceed the OECD's and most developed countries. According to statistics, Australia's population accounts for only 0.3% of the world's total population, but its per capita emissions have reached 1.07%, and emissions have reached 22-25 tons.
To sum up, even if the Australian government is fully engaged and urges states to enter 100% new energy power generation mode at full speed, it will be extremely difficult to achieve carbon neutrality (zero emissions) before 2050. Therefore, the most realistic approach is to adopt a carbon credit trading mechanism.
2.Carbon Credit Trading Mechanism
The carbon credit refers to a permit used to limit carbon emissions. Generally, 1 unit of carbon credit is equal to 1 ton of carbon dioxide emissions. In other words, if a company gets 100 credits, it means that the company can emit 100 tons of carbon dioxide within the specified time. At present, Australia's carbon emission credits are under the responsibility of the Clean Energy Regulator (CER), and the credits are called Australian Carbon Credit Units (ACCU). This mechanism has two primary purposes: to punish companies that emit excessive emissions and reward companies that actively reduce emissions.
First of all, the quantitative ACCU will be allocated to large enterprises (such as mining, electricity, etc.) that generate major emission sources at the initial policy implementation stage. The quota will be reduced year by year. This process will provide a buffer window for the enterprises and finally enter the zero-emission team.
Secondly, companies with low emissions or rapid emission reductions can use the excess ACCU for transactions to obtain additional revenue. For example, if a small company owns 500 ACCUs during the validity period, the company can sell these credits (the current price is $16.10 per unit). The repurchase agency is ACCU-the Clean Energy Regulatory Authority (CER, repurchase through the emission reduction fund ERF).
In addition, some farms in Australia have also begun to make money by selling ACCU. According to TheLand report, with the introduction of emission reduction policies, many significant emitters, including mining, aviation and shipping, have begun to purchase ACCU to achieve carbon neutrality. For these large companies, economic scale is of utmost importance, and the greenhouse gases that are inevitably produced during their operations will incur huge fines. Therefore, the easiest way is to buy ACCU directly.
Regarding this, Louisa Kiely, Director of Carbon Famers of Australia, said: "The business model of mass production and sale of carbon emission credits once belonged to those farm giants, but now many small and medium-sized farms have also entered this industry because the global market is very concerned about carbon emissions. The demand for quotas is very high, and those agricultural enterprises that emit large amounts of their own can also hedge by planting trees on their farms."
Take the North Australian Pastoral Company as an example. This private company, with 13 cattle farms and covering an area of more than 60,000 square kilometres, announced in 2019 that it has achieved carbon neutrality. Carbon neutrality can kill two birds with one stone for the company on the one hand, and there is no need to outsource ACCU. On the other hand, it can sell excess ACCU in the medium and long term to increase revenue.
At present, there are approximately 500 companies listed on the Clean Energy Regulatory Authority (CER). These companies are all major emitters in Australia, and they are also the biggest challenge for Australia to achieve zero emissions by 2050. At present, there is still controversy over how to lower the baseline emissions of these companies. For example, some people call for each company to undergo separate audits because different companies and operating conditions should be treated differently; others believe that equal reductions should be adopted. Emission policy-with the goal of 2050, the baseline emissions will be reduced by a percentage year by year.
Some radical experts believe that the laws of the states and territories under the federal system are relatively different, and many policies that require a high degree of coordination will encounter great difficulties in the implementation, such as the epidemic. After the outbreak, other bans and restrictions in various regions, and continuous opening or closing of borders between each other, will become a huge stumbling block for Australia to achieve carbon neutrality by 2050.
3.Related Legislative Mechanisms & Policy
After several years of fierce debate, the Australian Senate voted in 2012 to pass a carbon emission tax bill to curb pollution. According to the passed "Clean Energy Act", from July 1 next year, the government will levy carbon emission taxes on the 500 most polluting enterprises in the country. The result is that costs have risen, and corporate and citizens' lives have been affected to a certain extent, and there are many oppositions from all walks of life, but this has not stopped the Australian government's determination to control carbon emissions in legislation.
In September 2021, the Australian government announced the introduction of a new bill-the "Offshore Power Infrastructure Act 2021", to establish a framework for the construction, operation, maintenance and decommissioning of offshore power projects. The Australian government issued the "Draft Maritime Clean Energy Infrastructure Framework" in February 2020 and conducted a public consultation on the "Offshore Clean Energy Infrastructure Act". The proposed bill follows two basic principles: one is flexibility, which can refine supporting policies and regulations based on the development of the industry; the other is the "shared" or "coexistence" nature of sea permits, and the same project Power generation devices and power transmission infrastructure can obtain independent licenses, and power generation devices of different projects can share the same power transmission infrastructure, and there is no need to apply for a license. The bill covers offshore power transmission cables and infrastructure projects for renewable energy generation, including offshore wind power. It is reported that the promulgation of the bill will accelerate the development of many offshore power infrastructure projects under development, such as the Marinus link transmission project connected to the national grid in Tasmania and the "Southern Star" near the Gippsland coast in Victoria.
On the whole, Australia has made tremendous efforts in the past few decades, whether it is at the legislative level, the policy level, the localization of international treaties, or the implementation. Compared with other countries, the current carbon-neutral legal system is relatively comprehensive and up-to-date. However, it is still challenging to get rid of the inherent limitations of environmental laws. Even if there are laws and penalties, it is difficult to prevent damage and emissions, and it is even difficult to restore the damage that has been caused. Also, these damages can only be measured by money, lacking mandatory prevention and control.
III Reform Proposals & Development Directions
Australia has taken or planned to take a series of practical measures and has achieved quite impressive results. However, the situation is still not optimistic. The first is that the set goals seem challenging to achieve, and the industrial structure adjustment seems to be more difficult than expected. Unexpected situations, such as forest fires, will also bring specific adverse effects. The degree of cooperation between enterprises and residents does not seem to be as high as expected. Even internationally, there is no shortage of criticisms of the Australian government's inadequate environmental protection.
From an objective point of view, the current focus and direction are not problematic: the use of new energy, carbon credit mechanisms, and related legislation and policies to escort it. What is certain is that Australia is on the right path. However, some reforms and adjustments are needed if better results and achievements are required.
1. Gradually realize the creation of carbon-neutral areas in newly developed and newly built sites with small areas as the unit, and achieve zero emissions in most areas.
Australia's urbanization process is slower than that of populous countries, so this goal is relatively easy to achieve. Directly establishing carbon-neutral regions in newly developed areas can solve the current urban problems and solve the challenges brought about by future urbanization once and for all. Moreover, the feasibility of this plan is relatively high, and Australia is fully capable of completing it.
A successful case, Barangaroo South announced that it had become the first region in Australia to achieve carbon neutrality. Lendlease, a leading international multinational real estate development and infrastructure group, as a partner of the New South Wales government, has obtained the honorary certification of the federal government. Since the beginning of the project, Lendlease has been committed to achieving industry-leading sustainable development in the jurisdiction, implementing construction and related infrastructure construction. Project design and delivery are both to promote and achieve the positive goal of climate to achieve carbon neutrality. Take the underground space serving the entire area as an example. Its area is the same as one of the first floors of a 42-story office building. The built-in area cooling storage equipment can save about 40 Olympic Games standard swimming pools every year. Furthermore, the waste management system has transferred more than 5,400 tons of waste from landfills in the past three years. In order to reduce carbon emissions in the Barangaroo South area, Lendlease focuses on the following three strategies: (1) Avoid emissions: through more practical architectural design, more efficient infrastructure, education and behavioural initiatives; (2) Reduce waste: implement the park Low carbon emissions internally and externally and the use of renewable resources; (3) Mitigation of warming: purchase or provide carbon offsets to offset emissions.
As a successful case, Lendlease can serve as a benchmark in newly developed areas in Australia as an example to achieve carbon neutrality in new cities in the process of urbanization.
2. Concentrate strength and resources, use the highest efficiency to solve complex industries, and gradually adjust the industrial structure.
It is difficult for Australia's traditional industries to be replaced and adjusted in a short period. It is a problem of policies and regulations and caused by many aspects such as history and geography. Apart from the tourism and education industries, all other pillar industries in Australia rely on large amounts of carbon consumption. However, it is impossible to achieve rapid transformation within a few decades, and the effect may be difficult to achieve the expected, bringing other difficulties. Therefore, a certain degree of resource concentration is needed to cancel simple fines control and truly realize the energy transition.
A practical example, in April of this year, Australian Prime Minister Morrison announced a new energy plan with an investment of 540 million Australian dollars for the development of hydrogen and carbon capture and storage (CCS) technology, which clarified the government’s long-term emission reduction strategy, including the establishment of remote areas in Australia The other four clean hydrogen centres develop carbon capture and storage technologies and projects and reduce the country’s emission footprint. Australia’s Federal Minister of Energy and Emissions (Angus Taylor) predicts that Australia’s Future Fuels Strategy will be completed by mid-2021, which will guide the country’s use of electric vehicles. The government will support technology to achieve the 2030 goals.
3. Strengthen regional cooperation and establish regional cooperation with neighbouring countries (New Zealand, Papua New Guinea, Indonesia) based on the carbon credit mechanism.
In the process of developing carbon neutrality, it should not be excessively restricted at home. Close regional cooperation can better promote long-term development. Regardless of the fishing industry in the Torres Strait or other industries with neighbouring countries, cooperation can be used to form a carbon-neutral mechanism in line with the characteristics of Oceania and achieve a regional win-win situation. While obtaining environmental protection can expand Australia's political and geopolitical influence.
4. At the legislative and policy level, narrow the scope as much as possible. Take the state or region as the unit to adopt targeted regulations and policies. Whether it is local legislation or the implementation of international treaties, try not to establish a unified standard at the federal level.
There are huge differences between states in Australia, and there are also considerable differences in the industrial structure. Take Western Australia as an example. As a pillar industry, mining is also a core issue that needs to be resolved to achieve carbon neutrality. Tasmania is entirely different. Therefore, if a unified standard at the federal level is formulated, it will be too cumbersome in the practice process, and it will not be easy to deal with excessive differences flexibly. Therefore, the solution to differentiation is differentiated laws and policies to solve practical problems in a targeted manner.
Similarly, the differences between various industries are also very significant. Therefore, when formulating industry standards and goals, we must also consider the development model, prospects, cost, difficulty and other factors of various industries and try to formulate detailed industry-based differences standards. Avoid uniform, overly general and conceptual standards, just because these standards are simple to control, penalize and reward.
IV Conclusion
Overall, Australia has made many meaningful measures to achieve its carbon emission targets and has performed awe-inspiring results. Nevertheless, the current mechanism still has some stubborn problems, which are difficult to overcome and full of future challenges. However, the Australian government's severe attitude and flexible resilience still make it very optimistic about achieving the goal. Existing mechanisms, especially carbon credit mechanisms, will play an essential role in the long-term future. Therefore, it is inevitable that the current main direction will continue to be maintained for a long time, but the specific strategy needs to be adjusted and changed.
作者简介
于百溪
西南政法大学经济法本科，澳大利亚新南威尔士大学法学职业博士（UNSW Juris Doctor），澳大利亚新南威尔士州Solicitor。
有多年行政执法工作和办理经济类犯罪案件经验。
现专注经济法类，经济类犯罪，行政、刑法交叉案件，刑事合规和涉外案件。
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