A leading climate change lawyer says clients are still unclear on the full details of the Coalition’s direct action climate policy, though it has given some new hope.
Following a G20 Summit that put Australia’s stance on climate change in the spotlight, Baker & McKenzie partner Martijn Wilder, head of the firm’s global environmental markets practice, says in some cases details had yet to emerge.
Wilder says offset developers, as well as emitters who have the opportunity to reduce emissions thanks to the Emissions Reduction Fund (ERF), were both interested in the new regime, but often lacked clarity beyond broad details.
He singles out the proposed emission ‘safeguard mechanism’, which would fine emitters based on whether they exceeded their historical emission levels. Wilder says at present clients had no confirmation on how the government would set baselines, and determine their performance against historical emissions.
However, direct action has had some positive effects on environmental markets in Australia, according to Wilder, following an uncertain period.
“For the time being it has saved the offset market, in the sense where we were in a position where we had nothing, so it has saved the offset market,” he says.
Wilder says that those clients who had liability for carbon emissions generally believed on the whole that there would be some form of carbon price in the future, and that there will be a cost involved in dealing with that.
For those clients producing carbon offsets under the Carbon Farming Initiative (CFI), Wilder says the ERF had actually served to ‘resurrect a buyer’.
And then there was a third party affected – the environment.
“The central issue in all of this right now is to what extent the ERF successfully achieves emissions reductions to meet the target we have, and to what extent will companies have their emissions restricted,” Wilder says.
Law firm environment and climate change practices are not expected to be impacted greatly by the transition to a Direct Action framework.
“The reality is that firms advising on a legal framework that disappears end up advising on the transition to a new legal framework,” he says.
Wilder says that the recent G20 had crucially highlighted that there was “so much going on” around the world in the environmental markets arena.