VICTORIA'S Environment and Climate Change Minister Ryan Smith last week released the findings of an independent review of the state's Climate Change Act 2010 that was triggered by the introduction of legislation for the Federal Government's carbon pricing scheme.
The Climate Change Act was introduced by the former Labor Government in 2010 and came into operation in July 2011. Among other things, the Act established a target to reduce Victoria's greenhouse gas emissions by 20 per cent by 2020 based on year 2000 emissions.
However, the review of the Act said there was no compelling case to maintain Victoria's target and found that having both state and national emissions reduction targets would impose additional cost burdens on Victorian households and businesses. The review also found the target "lacked enforceability and concrete measures in the legislation to achieve it."
"This judgement is based on evidence that a State-based target would not drive any additional national abatement in sectors of Victoria's economy already covered by the carbon price – notably energy and industry," the review said.
"In fact, a State-based target would distort the national scheme, which is considered the most efficient means of reducing emissions. Victoria would effectively cross-subsidise emissions abatement in other states at additional cost to Victorians: local emission reductions would reduce the incentives for other jurisdictions to undertake their own abatement."
According to the review, modelling suggests that by 2020, the target (in addition to the carbon price) could reduce gross state product (GSP) by 0.2 per cent and private consumption by 0.3 per cent.
"This report highlights problems of retaining a 20 per cent State target when there has been bipartisan support for a 5 per cent national target," Mr Smith said.
"The Victorian Government will support the Review recommendation that in the presence of the emissions trading scheme, the 20 per cent emissions reduction target should be repealed."
The government also released its response to the review and accepted the majority of the 16 recommendations outlined in the review. The government said it will continue elements of the Act that are complementary to national action, including the preparation of a four-year Climate Change Adaptation Plan.
Mr Smith said it was important to remember that the Victorian Climate Change Act was introduced at a time when there was no national mechanism in place to deal with carbon emissions and the passing of the carbon tax/ETS legislation at the Federal level would now render the Victorian Climate Change Act as a duplication of efforts.
More information on the Review of the Climate Change Act 2010 and the State Government's response is available from the Victorian Government's climate change website at <http://www.climatechange.vic.gov.au/>.