Victorian Climate Change White Paper – The Action Plan

The Victorian Government released its Victorian Climate Change White Paper - The Action Plan (the White Paper) on 26 July 2010. The White Paper sets out the key actions for tackling climate change over the next four years. A White Paper Implementation Plan will be released later in the year that will spell out details of funding and specific implementing measures for the initiatives outlined in the White Paper.

The White Paper lists the ten broad categories of actions to be taken by the Victorian Government in response to the climate change challenge, including in relation to clean energy and technology, efficiency in homes and transport, greening government and creating new opportunities in agriculture, food and forestry. The first 'Action' however is to introduce legislation binding Victoria to an emission reduction target of 20% below 2000 levels by 2020, and implementing a number of key initiatives towards reaching that goal.

The Climate Change Bill

On 29 July 2010 the Victorian Government introduced into Parliament its Climate Change Bill 2010. In the White Paper, the introduction of the Climate Change Bill is considered as part of 'Action 1' and is designed to 'put into law many of the actions set out in the White Paper'. It is stated in the White Paper that, specifically, the Climate Change Bill will:

• legislate a target to reduce greenhouse emissions by at least 20% by 2020 compared to 2000 levels
• amend powers under the Environment Protection Act 1970 to effectively ban new power stations based on current brown coal technologies
• amend powers under the Environment Protection Act 1970 to allow for greenhouse gases to be regulated. This will enable the setting of a greenhouse gas 'trigger' for large emitters, enabling the regulation of greenhouse gases as part of licensing and approvals
• legislate to ensure that decision-makers take climate change into account in specified government decisions
• legislate for a Climate Change Adaptation Plan to be developed by the Government every four years, outlining the climate change impacts and risks to Victoria, as well as the Government's priority areas for a State response
• legislate to create new arrangements for the ownership, registration and transfer of forestry and carbon sequestration rights which will facilitate the development of the emerging carbon sequestration industry, bring Victoria's legal framework in line with national approaches and allow Victorians to easily participate in State and national sequestration efforts
• legislate to allow the Climate Communities Program access to increased funding through the Sustainability Fund, allowing for the further promotion of local actions to tackle climate change
• legislate to allow the Government to enter into Climate Covenants with communities, regions, industry and other stakeholders, allowing them to take ownership of climate change issues and empowering them to be innovative and proactive in their response to climate change, and
• legislate to ensure that the Government must report every two years on climate change science and Victoria's progress towards its emissions reduction target; and

The White Paper notes that in the event that the Commonwealth introduces a national emissions trading scheme, or an economy-wide carbon price, it will be necessary to review the Climate Change Act immediately to ensure consistency with any Commonwealth scheme.

Clean Energy

The White Paper spells out a number of initiatives and funding commitments for the clean energy sector. These include the following commitments:

• $30 million to leverage support for carbon capture and storage (CCS) projects from the Commonwealth Government's $2.4 billion CCS Flagships Program. This commitment of funds (labelled the 'CarbonNet project') is designed to develop Victoria as a 'CCS hub';
• provide ongoing support for the Latrobe Valley during the transition to a low-carbon economy; including identifying opportunities and investing in skills, business development and support networks and partnerships for the Valley. Opportunities will be identified particularly in sustainable resource management, low emissions energy and alternative uses of coal;
• increase Victoria's electricity supply from large scale solar power to approximately 5% by 2020; including by introducing a large-scale solar feed in tariff outside of the Commonwealth Government's Renewable Energy Target scheme (RET). The Victorian Government expects this policy to result in the construction of between 5 and 10 large solar plants across northern Victoria by 2010;
• work with business and community groups to investigate ways of assisting commercial (larger than residential) scale installation of renewable energy facilities such as solar, including those not currently eligible under the Victorian Premium Feed-in Tariff scheme. Part of this process will involve the establishment of a Medium Scale Solar Working Group to investigate policy options and additional measures;
• the creation of 'Green Doors' which are described as a 'one-stop-shop' for developers of energy projects that meet the threshold criteria of 0.5 tCO2/MWh under which every such project will be assigned a project manager to assist in the navigation of the application and planning process. Further, for projects larger than 30 MW, the Green Door may identify the project as 'state significant' and streamline the approvals process;
• increase the government's GreenPower commitment from 25% to 35% by 2015 and 50% by 2020, ensuring that public departments and agencies lead the way in the consumption of renewable energy;
• re-allocate $41 million in uncommitted funds within the Energy Technology Innovation Strategy to provide competitive grants for pilot renewable energy plants and technology projects. Eligible technologies include renewables, but also extend to smart grid and energy efficiency technologies; and
• work to remove barriers to renewables investment, such as local opposition to projects and grid connection issues.

Energy Efficiency

The White Paper identifies a number of energy efficiency programs for homes, business and transport to be implemented, including committing to:

• implement the COAG decision for all new homes and major renovations to existing homes to meet a 6 star energy rating;
• set a target of an average 5 star rating for all homes across Victoria by 2020 to be met through the following initiatives:
  • seeking to double the target of the Victorian Energy Saver Incentive and expand the list of eligible energy efficiency activities, subject to a Regulatory Impact Statement;
  • delivering a comprehensive household retrofit program to assist Victorian householders to reduce their energy consumption through energy efficiency upgrades, including support for low income households and public housing tenants;
  • launching a new website to give households detailed information on opportunities to save energy and obtain Government rebates;
  • maintaining Victoria's strict rules for accreditation of home energy assessors to ensure public confidence in the advice given by home retrofitting companies;
  • advocating to the Commonwealth for the commencement of the $35 million GreenStart program in Victoria to provide further energy efficiency improvements for low-income households; and
  • extending the Victorian rebate scheme for installation of solar hot water systems to help households reduce their energy bills and emissions, complementing the Commonwealth Government's rebates.
• expand the Energy Saver Incentive to include small to medium enterprises (SMEs);
• create a Clean Business Fund under the Climate Communities Program to support projects that would have been viable with a carbon price but are otherwise uncommercial;
• expand the Environment and Resource Efficiency Plan (EREP) by investigating (in consultation with industry) options to increase the number of participating businesses, ensure ongoing participation by businesses already participating and alter the mandatory implementation payback calculation to include more relevant factors such as a future price on carbon;
• encourage electric vehicles in Victoria by providing support for local design, development and manufacture of electric and low-emission vehicle technologies and also by continuing to work with Standards Australia in the development of nationally consistent technical, regulatory and safety standards for electric vehicles and recharging infrastructure;
• introduce a target of reducing the Victorian Government's emissions from its vehicle fleet by 20% by 2015 to be met by purchasing hybrid vehicles;
• double the existing discount of $50 for hybrid vehicles and extend the discount to electric vehicles;
• introduce a target of improving energy efficiency across all government buildings (including schools, hospitals and offices) by an additional 20% (from the current efficiency trajectory) by 2018, to be met by;
  • investing a further $100 million in the Greener Government Buildings Program;
  • investigating the installation of up to 50 MW of cogeneration in Victoria's hospitals; and
  • improving energy efficiency in schools and fully incorporating climate change into the curriculum.

Other Initiatives

The White Paper also outlines a number of initiatives in the areas of forestry, agriculture, adaptation and the community sector that it will seek to implement over the next four years. These initiatives include;

• the establishment of the Victorian Carbon Exchange to enable the purchase of Victorian offsets for use in the voluntary carbon market. This is intended to incentivise changing farming practices, forest plantations and soil carbon sequestration for Victoria's landholders and forest operators. Support for the Carbon Exchange will include:
  • the establishment of legal rights for landholders who voluntarily engage in vegetation and soil sequestration through the Climate Change Bill;
  • the establishment of clear rules under which Crown land can be used for carbon sequestration purposes in the Climate Change Bill;
  • the provision of relevant and up-to-date information on the carbon stored in Victorian ecosystems and its implications for carbon markets through the LandCarbon project;
  • the development of a Victorian agricultural offset scheme if no national offset standard is in place by July 2011;
  • investing in improving agricultural mitigation, adjustment and adaptation techniques, developing reliable monitoring and measurement systems; and
  • introducing a voluntary Vehicle Registration Offset Program to enable the purchase of offsets in Victoria.
• the expansion of the Climate Communities program across business, households, community groups and schools and the implementation of awareness initiatives through schools, a new web portal and building upon the successful 'black balloons' campaign; and
• implementing a state-wide Climate Change Adaptation Plan to work with the community to assess, at regular intervals, the risks to key sectors and the priorities for climate change action across the State and also the Climate Change Preparedness Program to provide local communities and businesses with support and advice on their climate change related risks.

Business Implications

The White Paper on climate change in Victoria helps provide business with the certainty, out to 2020, that it needs to plan for actions that can be taken by business to engage in emissions reducing projects. Key opportunities will be found in large scale solar, medium-scale renewables technologies, reducing the carbon intensity of coal and energy efficiency technologies for homes and transportation.

The extent to which the action plan laid out in the White Paper is carried into practice through effective and timely legislation will be critical to the success of the program and will also be key to the ability of projects to proceed and obtain private sector capital.

We are in the process of preparing a detailed analysis of the Climate Change Bill for our Victorian clients. If you are not based in Victoria, and would like to receive a copy of this update, please contact a member of our Climate Change team.

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