Posted on December 19, 2023 by Anna Sinclair and Fayette Vermeer 10

ALERT: Climate Change (Net Zero Future) Act 2023 commences

The Climate Change (Net Zero Future) Act 2023 (the Act) was recently passed by the New South Wales Parliament, and has commenced operation.

The purpose of this landmark legislation is to give effect to the commitments under the 2015 Paris Agreement and increase NSW’s ability to adapt to the impacts of climate change.

The Act has the following four key objects:

1. establish guiding principles for action to address climate change;
2. set reduction targets for NSW’s net greenhouse gas (GHG) emissions;
3. set an adaptation objective for NSW to be more resilient to a changing climate; and
4. establish the Net Zero Commission (Commission) to independently monitor, review and report on progress in NSW towards the reduction targets and the adaptation objective.

NSW has now joined the Commonwealth, Victoria, the Australian Capital Territory and Tasmania, which already have laws in place to meet net zero.

We discuss the key aspects of the Act below.

The Guiding Principles

Section 8 of Act sets out the “guiding principles”, which are designed to underpin the way that climate change is addressed in NSW. As the Minister said when introducing the Bill into Parliament, these guiding principles are “the considerations that will shape action, make sure nothing and no-one is left behind and keep government accountable“.

The guiding principles include the following:

• that there is a critical need to act to address climate change, which is a serious threat to the social, economic and environmental wellbeing of NSW;
• action to address climate change should be taken as early as possible to minimise the cost and adverse impacts of climate change;
• action to address climate change should be taken in a way that is fiscally responsible, and promotes sustainable economic growth, and considers the economic risks of delaying action to address climate change, and considers the impact on rural, regional, and remote communities in NSW;
• action to address climate change should take into account a number of matters, including the knowledge and perspectives of Aboriginal communities, and the best available science;
• action to address climate change should be consistent with the right to a clean, healthy and sustainable environment; and
• the NSW Government is responsible for urgently developing and implementing strategies, policies and programs to address climate change.

Reduction Targets

Section 9 of the Act legislates NSW’s primary targets to reduce GHG emissions by 50 percent by 2023; reduce GHG emissions by 70 percent by 2035; and to achieve net zero GHG emissions by 2050. It also allows for interim targets to be prescribed in regulations.

It further provides for the regulations to make provision for implementing the primary and interim targets and to measure progress towards those targets. The regulations may also adjust the targets for reducing GHG emissions by bringing the target dates forward and/or increasing the percentage by which the emissions are to be reduced, which legislatively guards against backsliding by ensuring that targets cannot be revised downwards.

Importantly, section 11 of the Act provides that the Premier and Minister must ensure that NSW achieves the 2050 net zero target. This provision was included following the Parliamentary Committee review of the bill, and is designed to make the 2050 reduction target binding on the Government.

Adaptation Objective

Section 10 of the Act creates an “adaptation objective” for NSW to be more resilient to a changing climate.

In the Second Reading Speech, the Minister noted that the adaptation objective focuses on building NSW’s capacity to adapt to climate change and remain liveable and resilient, minimise harm from climate change, and maximise future opportunities.

The Act leaves it to future regulations to make provision for the implementation of the adaptation objective.

Net Zero Commission

The Act establishes the Commission as an independent agency, which will consist of five to seven commissioners appointed by the Governor based on the Minister’s recommendation, three temporary commissioners appointed by the Minister, and NSW’s Chief Scientist.

The purpose of the Commission is essentially to develop the roadmap for the State to achieve net zero and adapt to climate change, and to monitor the State’s progress and make recommendations to achieve the reduction targets. Its statutory functions under the Act include the following:

• to monitor and review, and to provide advice and recommendations to the Minister on, progress towards the GHG emission targets, and progress in relation to the adaptation objective;
• to identify and recommend action that should be taken by the NSW Government to address climate change, including strategies, policies and programs that should be implemented;
• to educate and inform the NSW Government, businesses, organisations and individuals to promote action to address climate change; and
• to provide advice and make recommendations to a Secretary of a NSW Government Department, and the Independent Planning Commission (IPC).

The Commission’s ability to advise NSW Government departments will assist in ensuring a whole-of-government response to climate change. The Commission’s ability to give advice to the IPC means that climate change will likely become key considerations in decision-making related to the determination of state significant development, particularly coal and gas projects.

Key Takeaways

The Act marks an important next step in the NSW Government addressing climate change, and provides a strong framework for climate change mitigation and adaptation. However, the Act is just the starting point, and how the Government meets the reduction targets and adapts to climate change will be determined by future action.

The commencement of the Act will likely result in a range of actions and reforms across Government, including:

• increased action across Government agencies as the Government seeks to meet its obligations under the Act, including achieving net zero by 2050,
• climate change mitigation and adaptation will increasingly inform the development of legislation, policy and Government decision-making in a range of areas including procurement and infrastructure delivery,
• the greater regulation of GHG emission intensive industries (e.g. agricultural and mining) to ensure that those industries operate in a manner that will enable the Government to reach the reduction targets, and
• reforms to the planning system (including strategic land-use planning, environmental impact assessment and development assessment) to ensure that climate change mitigation and adaptation considerations are adequately incorporated into planning and development decisions.

The Act can be accessed here.

If you have any questions regarding this article, please leave a comment below or contact Anna Sinclair on 02 8235 9713 or Fayette Vermeer on 02 8235 9730.