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The right climate for change?

The right climate for change?

The politics surrounding climate change and carbon pricing makes for an uncertain legal landscape, but lawyers are ready for battle nonetheless. Claire Chaffey reports.When Julia Gillard…

The politics surrounding climate change and carbon pricing makes for an uncertain legal landscape, but lawyers are ready for battle nonetheless. Claire Chaffey reports.

When Julia Gillard recently announced that the Federal Government would be intro­ducing a fixed carbon price in the lead-up to the implementation of a full emissions trading scheme (ETS), a heated political stoush began.

The announcement came despite the fact that Gillard had vowed, during last year's elec­tion campaign, that she would not impose a "carbon tax". While the Greens support the latest announcement and the Independents are, at the very least, sympathetic, the Oppo­sition has declared that any such scheme would be immediately dumped should they win the next election. It's not pretty.

Climate change lawyers, however, are not surprised. For them, the move is nothing more than the long-anticipated next chapter of a story in which everybody knows the ending: sooner or later, there will be legislation dictating some sort of ETS.

"I think everyone accepts that, whether it's this time around or in the next couple of years, there will have to be some sort of carbon regulation imposed," says Allens Arthur Robinson partner Grant Anderson.

Freehills senior associate Michael Voros agrees: "This is the next chapter ... this is not necessarily a surprise or something out of the blue," he says.

"After the CPRS (Carbon Pollution Reduc­tion Scheme) was unsuccessful, there was a bit of a vacuum. This [announcement] is now getting us back to that point."

According to Gillard, who announced plans for an ETS on 24 February, setting a carbon price is part of "an essential economic reform" and is "the right thing to do".

"Carbon pollution is a threat to our country and a threat to our future prosperity," she said during the announcement.

Whether you believe that or not, climate change lawyers around the country have, despite the ongoing uncertainty and political debate, been steadily preparing their clients for what now seems to be inevitable.

"It's not [difficult to advise clients on this issue] because even though things are uncer­tain, the uncertainty is something you are advising on," says Freehills consultant John Taberner.

"In advising clients, [we] assume that the current proposals will have some kind of form, sooner or later, and advise our clients as to the possible effects of that."

According to Taberner, the central theme of their advice is to identify and apportion the potential costs associated with a carbon price in contractual documentation.

But advising clients on this issue is nothing new, with carbon-related matters having been on clients' minds for several years."This is but another step on the way to a carbon price in Australia, which is a path that we have been treading for a number of years," says Voros.

"There's a spectrum of possibilities here, and we work with our clients to address all of those potential risks and opportunities."

It is this pro-active and steady approach which has ensured that clients have not been blind-sided by Gillard's apparent about-face.

"We have been grappling with [this issue] ever since the CPRS was rejected," says Anderson. "We started drafting our clauses more broadly to capture things like a carbon tax, so it's not a huge change in that regard."

And if a carbon price, or any other carbon-related scheme, does happen to make its way out of the political arena and into cold, hard law, climate change lawyers will be ready.

"We have been developing our internal resources to respond quickly, if and when developments occur," says Taberner.

"If a carbon price comes in, and there are reasonable prospects that that will happen in the next 18 months, then there should, at least in the short-term, be a good deal of work as people get used to it and need advice on it."

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The right climate for change?
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