IPA Opening Statement to NSW Legislative Council Inquiry into the Climate Change (Net Zero Future) Bill 2023

Written by: and
30 October 2023
IPA Opening Statement to NSW Legislative Council Inquiry into the Climate Change (Net Zero Future) Bill 2023 - Featured image

Thank you for the opportunity to appear before the committee today.

Legislating a net zero emissions by 2050 mandate would be a grave policy mistake for New South Wales, which will cost jobs, undermine energy security and reliability, open potential avenues to activists, without providing a discernible benefit to the environment.

Institute of Public Research has established that under a net zero policy that, at a minimum, all coal, oil, and gas projects in the construction pipeline would need to be cancelled. As a result, existing jobs in high-emitting industries such as manufacturing, agriculture, and energy supply will be put at risk.

This will mean up to 138,095 jobs across NSW will be put at risk, with 67 per cent of these jobs located in rural and regional NSW.

The twenty state electorates with the most jobs at risk are all located in rural and regional NSW. In comparison, the twenty state electorates with the lowest number of jobs at risk are all classified as inner metropolitan, where the total percentage of jobs put at risk by net zero is one per cent or less.

The policy of net zero appears to be in conflict with the sensible decision of the NSW government to seek to extend the lifespan of the Eraring Power Station.

That announcement came soon after the Australian Energy Market Operator released their 2023 Electricity Statement of Opportunities report, which established that NSW is expected to experience energy reliability gaps, a technical term for blackouts, from the 2025-26 summer. Reliability gaps are expected in all mainland states that are connected to the National Energy Market within the rest of the decade.

At a minimum, following the decommissioning of the Liddell power station earlier this year, no further baseload power station should be allowed to close unless and until a like-for-like baseload replacement, such as coal, gas or nuclear, is ready to come online, a scenario that does not appear possible under the policy of net zero.

The removal of baseload power from the grid is set to increase power prices across the national energy market, including NSW.

The absence of a reliable and affordable replacement baseload power supply will artificially lower the nation’s reliable energy supply and put further upward pressure on household power bills.

IPA analysis found that households in NSW can expect their power bills to double by the end of the decade from 2022 levels because of the removal of reliable and baseload energy sources.

As well as enshrining into legislation a net zero target, the bill will allow the creation of the ‘Net Zero Commission’. The Net Zero Commission would have the responsibility of monitoring, reviewing, and providing advice and recommendations to the relevant Minister on the progress towards achieving the legislated net zero targets.

Section 11 of the bill specifies that the Net Zero Commission would not act under the direction of the Minister. The limited powers of the Minister are to appoint members of the Net Zero Commission, provided the candidates have the skills, qualifications, and experience, pertaining to seven separate criteria relating to climate science, climate change, renewable technologies, and the ‘interests of Aboriginal communities’. Not mentioned among the criteria is anything relating to energy security or the affordable and reliable supply of energy.

Of direct importance to matters being considered by this committee, there is an open question about the potential for abuse of legislated net zero targets by activists in the courts. In New South Wales, standing for judicial review of a decision is based on common law principles, and a person raising a challenge of a government decision must demonstrate a direct material interest in a matter.

However, there are numerous open standing provisions in numerous environmental laws that allow any person to launch proceedings in the Land and Environment Court for an order to restrain a breach of a relevant act. For instance, section 5.5 of the Environmental Planning and Assessment Act 1979 provides that a government decision maker is required, when considering an action regulated by act, must “examine and take into account to the fullest extent possible all matters affecting or likely to affect the environment by reason of that activity.”

In addition, before a minister is able to give approval to “state significant infrastructure” such as roads, railways, or electricity transmission networks, the minister must first be presented with a environment impact statement prior to making an approval decision.

It seems more likely than not that formalising the net zero target in legislation will have a significant litigation impact. If a decision maker is required to consider an activity “likely to affect the environment”, then an activity that negatively contributes to meeting the net zero target will fall within scope.

The open standing provisions will enable green groups to challenge government decisions to approve projects on the grounds that they are incompatible with net zero targets.

Based on the research and analysis that we have submitted; the IPA recommends that the Bill does not proceed.

Thank you for the opportunity to appear here today. I look forward to taking your questions.

This transcript of the IPA’s opening statement to the committee has been edited for clarity

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