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2004-2005-2006
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
Avoiding Dangerous Climate Change (Kyoto Protocol Ratification) Bill 2006
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator Carr)
Avoiding Dangerous Climate Change (Kyoto Protocol Ratification) Bill 2006
OUTLINE
1. As a result of increasing levels of carbon dioxide and other greenhouse gases in the
atmosphere, global average temperatures have risen by 0.6�C over the past century.
The international consensus of scientific opinion is that this trend will lead to a rise of
global temperature by 2 - 5�C over the next century. Such a rise in temperatures
would be devastating to most of the world.
2. The changing global climate will affect our natural and built environments as
temperatures rise, rainfall patterns change and sea levels rise and force adjustments
in our way of life. As extreme weather events become more frequent and changes
are made to the way we use energy, the way we live and work will have to change,
and the lifestyle we take for granted may not be enjoyed by our children and
grandchildren.
3. Climate change is the most significant challenge facing the global community and the
greatest threat to Australia's way of life.
4. According to the CSIRO, Australia is hotter and drier than it was 100 years ago, with
less water per capita, more bush fires and more extreme weather events. 1
5. According to the CSIRO & the Bureau of Meteorology, Australia is very vulnerable to
climate change. A 2�C increase in global temperature would severely damage the
Great Barrier Reef, Kakadu's wetlands and the alpine regions of south eastern
Australia, as well as threaten low lying coastal areas.
6. Governments around the world have started planning for these changes; acting to
minimise the magnitude and rate of change by reducing greenhouse gas emissions
and adapting to future climate change that is now unavoidable. Responsible
Governments are:
� Investing in climate change science to improve our understanding of future
climate;
� Talking to the community and businesses about climate change and what it
means for them;
� Actively shifting their economies to succeed in a world where greenhouse gas
emissions are increasingly restricted; and
� Working multilaterally with other Governments to reduce greenhouse gas
emissions and preparing for a future under a changing climate, while respecting
their common but differentiated responsibilities and capabilities.
1. Recognising the need to stabilise greenhouse gas concentrations in the atmosphere
and the absolute importance of united global action to meet this challenge, the United
Nations Framework Convention on Climate Change was agreed to in 1992. Since
then the Parties have continued to negotiate and the third session of these
negotiations resulted in the adoption of the Kyoto Protocol to the Convention in
December 1997.
1
CSIRO consultancy report for the NSW Greenhouse Office, November 2004.
2. The Kyoto Protocol signifies an important change in the attitude of nations and shows
they are serious about addressing climate change. It represents a global response to
a global problem. The Kyoto Protocol has four major features:
� Binding targets on greenhouse-gas emissions for all developed countries and
for those countries in transition to a market economy. These targets range from
-8 per cent to +10 per cent of the countries' 1990 emissions levels by 2008-2012.
For example, most of the European Union will have to cut their emissions by 8%,
New Zealand, Russia and Ukraine must keep their emissions stable and
Australia would be able increase its emissions by 8%. Of the industrialised
nations, only Australia and Iceland have a target which permits an increase from
1990 levels. As well as having a low emission target, a special clause was
included for Australia's benefit so cuts in land-clearing would be counted.
� Flexibility and market based mechanisms to assist countries to meet the
targets. For example, countries may partially compensate for their emissions by
increasing "sinks" (forests, which remove carbon dioxide from the atmosphere).
The sinks can be on their own territory or in other countries, or they may pay for
foreign projects that result in greenhouse-gas reductions. To ensure the flexibility
and economic efficiency of making emission cuts, mechanisms such as
emissions trading have been established so parties may trade units of their
emissions allowances with other Parties.
� Project based mechanisms, known as Joint Implementation and Clean
Development Mechanisms, through which industrialised countries can partly
meet their emissions targets through "credits" earned by sponsoring greenhouse-
gas-reducing projects. In the case of Clean Development Mechanism projects,
such activities occur in developing countries.
� It has widespread international support and will provide the architecture and
reporting, monitoring and verifying infrastructure for future international
agreements on climate change. Countries such as Canada, Japan, New Zealand
and every country in Europe, are all adopting domestic measures to implement
the Kyoto Protocol and countries like India and China have developed the
necessary frameworks for the pursuit of Clean Development Mechanisms.
8. The Kyoto Protocol became legally binding on 16 February 2005.
9. After gaining significant concessions, Australia signed the Kyoto Protocol on 29
April 1998. However, for purely political reasons, Australia is now one of only
two developed countries not to have ratified it. The other is the United States.
10. The Avoiding Dangerous Climate Change (Kyoto Protocol Ratification) Bill 2006 (the
Bill) will:
� Require the Australian Government to take the necessary steps to ratify the
Kyoto Protocol within 60 days of the commencement of the Act; and
� Enable Australia to enjoy the benefits that flow from meeting our international
obligations under the Kyoto Protocol.
11. The Bill
� Ensures Australia meets the target it agreed to when negotiating the Kyoto
Protocol at least cost to the economy (linking with the global carbon market will
ensure least cost compliance),
� Sends a clear message to all Australians that we must start working actively on
climate change because it is an issue affecting Australia's future prosperity;
� Signals to business we are taking a planned approach to shift the economy to a
low carbon growth trajectory, and ensures the quest for low carbon growth
becomes a significant driver of innovation;
� Enables businesses already investing in low carbon growth to derive revenues
for their products and services from the global carbon market; and
� Shows leadership on this issue around the Asia-Pacific region, where many of
those extremely vulnerable to the impacts of climate change live and are least
able to respond.
12. If Australia does not ratify the Kyoto Protocol, Australian businesses will be
excluded from lucrative international economic opportunities presented by global
carbon markets and the developing renewable energy technology markets.
13. Given the Australian Government has predicted Australia will meet the emission
reduction target for the period 2008 - 2012, it is illogical for Australia not to ratify the
Kyoto Protocol and place Australian companies and our economy in such a
disadvantageous position.
FINANCIAL IMPACT STATEMENT
Ratification of the Kyoto Protocol would have no direct financial impacts on the
Commonwealth budget; however, ratification would stimulate significant and immediate
benefits to Australian businesses by enabling their participation in emissions trading and
renewable energy technology markets.
Climate Protection (Kyoto Protocol Ratification) Bill 2006
NOTES ON INDIVIDUAL CLAUSES
Clause 1 Short title
1. The short title by which this Act may be cited is Avoiding Dangerous Climate
Change (Kyoto Protocol Ratification) Act 2006.
Clause 2 Commencement
2. This clause provides that the Act commences 30 days after the day on which it
receives the Royal Assent.
Clause 3 Object of the Act
3. This clause provides that the object of the act is to enable Australia to meet its
international obligations under the United Nations Framework Convention on
Climate Change by ratifying the Koyoto Protocol to the Convention.
Clause 4 Interpretation
4. This clause defines certain terms that are used in the Act.
Clause 5 This Act binds the Crown
5. This clause provides that, if the bill is passed, the Crown is bound by its provisions.
Clause 6 Ratification
6. This clause requires the Government of the Commonwealth of Australia to deposit a
legal document of ratification of the Kyoto Protocol with the United Nations within 60
days of the commencement of the Act.
Clause 7 National Climate Change Action Plan
7. Under this clause the Minister will be required to have a National Climate Change
Action Plan prepared. The plan must set out a detailed implementation strategy to
meet Australia's obligations under Article 2 of the Protocol, so Australia will achieve
its quantified emission limitation and reduction commitments under Article 3 of the
Protocol.
Clause 8 The Kyoto Target
8. This clause requires the Minister to ensure that Australia's aggregate human
induced carbon dioxide equivalent emissions in the first commitment period, 2008-
2012, do not exceed 108% of the 1990 levels.
Clause 9 Annual Greenhouse Gas Inventory and National Communication
9. This clause requires the Minister to establish a national system for estimating
human induced emissions of greenhouse gases not controlled by the Montreal
Protocol, as required by Article 5 and as accepted by the Intergovernmental Panel
on climate charge. The clause also requires the Minister to publish the annual
inventory of greenhouse gas emissions, and to submit it for review by expert review
teams, pursuant to decisions of the Conference of Parties, as set out in Article 8 of
the Protocol. Finally, the clause requires the Minister to submit an Annual
Communication in accordance with article 7, and subject to subsequent decisions
by the Conference of the Parties.
Clause 10 Framework for involvement in international trading schemes
10. This clause requires the Minister to develop a means by which the international
transfer of emission reduction units can be facilitated. Such a mechanism would
include means by which units could be transferred as a result of reduced human
induced emissions or enhanced human induced removals by sinks of greenhouse
gases. The mechanism would also allow for the transfer of emission reduction units
under the clean development mechanisms. The clause would also require the
Minister to establish a registry of emission units to ensure the accurate accounting
for and recording of units and their transfer, and the accurate, transparent and
efficient exchange of information between Australia and overseas registries.
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