while paying $16 billion a year to the industries driving the crisis
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The numbers in the Climate Change Act 2022 are precise.
Australia will cut emissions 43 per cent below 2005 levels by 2030. It will reach net zero by 2050. The statute is real, signed, tabled in parliament.What it does not contain, and what its architects chose not to include, is any mechanism to compel anyone to achieve those outcomes.
No minister faces a civil penalty if the targets are missed. No agency can be sued. No court can order the government to act.
The law is, in the language of its own explanatory memorandum, a transparency and accountability framework. It is not an enforcement mechanism.
That distinction matters enormously. The Climate Change Authority, the independent statutory body charged with advising on progress, is required to produce assessments.
The Minister for Climate Change and Energy must table an annual statement. But "must report" and "must achieve" are entirely different obligations. 1
The result is a legal architecture that can generate enormous amounts of paper and almost no consequences.
A Framework Built on Goodwill
Australia's absence of a standalone national climate adaptation law places it outside the company of comparable democracies. Britain enacted its Climate Change Act in 2008 with statutory five-year carbon budgets and ministerial duties enforceable in the courts. Germany and Denmark have legislated adaptation frameworks that assign specific planning obligations to government departments.
Australia has the National Climate Resilience and Adaptation Strategy 2021-2025, a non-binding policy document. No federal department bears a statutory duty to act on its recommendations. No timeline triggers a consequence if it is ignored.
The Safeguard Mechanism, reformed in 2023 and covering roughly 215 large industrial facilities, is the federal government's primary tool for constraining industrial emissions. Those facilities collectively produce around 31 per cent of Australia's annual output. 2
Baselines are set using a hybrid of facility-specific and industry-average emissions intensities, initially weighted toward the former, transitioning to sector benchmarks by 2030. The Clean Energy Regulator administers the scheme and publishes compliance data. What it has not done is prosecute a facility for baseline manipulation.
The verification regime relies heavily on self-reporting under the National Greenhouse and Energy Reporting Act, with external audits triggered by the regulator's own risk assessments, not by independent routine inspection.
The EPBC Act, Australia's primary federal environment law, now overdue for replacement, has rarely been used to impose binding climate conditions on major project approvals. The proposed Nature Positive reforms stalled and were restructured after their initial legislative defeat. Meanwhile, project assessments have continued under a framework last comprehensively updated before the Paris Agreement existed.
The $16 Billion Contradiction
Federal and state governments spent $16.3 billion subsidising fossil fuel producers and major users in 2025-26, according to the Australia Institute, a 9.4 per cent increase on the previous year, outpacing growth in the National Disability Insurance Scheme. 3
The dominant mechanism is the Fuel Tax Credits Scheme, which cost $10.8 billion in 2025-26 alone, predominantly benefiting mining companies. Treasury's own budget papers project the scheme's cost will grow faster than spending on disability support, aged care, and childcare subsidies through to 2028-29.
No independent body has conducted a comprehensive audit of whether this expenditure is disclosed consistently across years, whether the methodology captures all forms of public support, or whether the aggregate figure has ever been formally assessed by the Productivity Commission.
The commission's last comprehensive review of climate inaction costs dates to 2014. The fiscal logic operating beneath Australia's climate commitments has not been formally stress-tested against current physical risk projections.
Queensland, Western Australia, and New South Wales continue to approve new thermal coal mines under state planning laws. Planning ministers applying cumulative downstream emissions tests do so under frameworks that vary by jurisdiction, have been inconsistently applied in court challenges, and carry no federal override mechanism.
The National Cabinet has discussed climate resilience in its closed sessions, but its communiqués carry no binding force, and the decisions themselves remain confidential.
The Torres Strait Judgment
On 15 July 2025, Justice Wigney of the Federal Court handed down the most consequential climate ruling in Australia's legal history: a dismissal. In Pabai v Commonwealth (No 2), two elders of the Gudamlulgal Nation, Uncle Pabai Pabai and Uncle Guy Paul Kabai, had spent four years arguing that the federal government owed them a duty of care to protect Torres Strait Islanders from climate harm. 4
The court found no such duty existed. It confirmed that the Commonwealth's pre-2022 emissions targets fell short of scientific advice. It accepted the evidence of climate devastation bearing down on the islands. And it still dismissed the claim.
The reasoning followed the Full Federal Court's 2022 decision in Sharma. Both courts concluded that the negligence framework is not the appropriate vehicle to challenge high-level government climate policy. The duty of care the applicants sought was too broad and indeterminate; the class of potential plaintiffs too vast; the connection between specific government decisions and individual harm too indirect for the common law to accommodate.
"My heart is broken," Uncle Pabai Pabai said after the decision.
The ruling lands against a broader international backdrop pulling in the opposite direction. The International Court of Justice's Advisory Opinion, delivered eight days later, found that states bear climate obligations under both treaty law and customary international law.
The UN Human Rights Committee had previously found Australia violated Torres Strait Islanders' rights through climate inaction. Australian domestic courts and international legal bodies are now producing directly contradictory conclusions about the same facts.
Who Bears the Health Burden
The Black Summer of 2019-20 produced, by peer-reviewed estimate, 417 excess deaths attributable to bushfire smoke, alongside more than 3,000 hospitalisations for cardiovascular and respiratory conditions. 5
The smoke peak on 14 January 2020 reached PM2.5 concentrations more than fourteen times the national daily standard. No state or territory has since enacted a legally mandated heat or smoke health action plan that places binding obligations on hospitals, aged care facilities, or employers. Health ministers retain authority to issue public health directions under existing legislation, but that authority is discretionary, not compelled.
Climate change is simultaneously expanding the geographic range of vector-borne disease in northern Australia, dengue, Ross River virus, and the spectre of malaria reestablishment, while intensifying urban heat island effects in cities where summer temperatures routinely exceed 40 degrees. Mental health impacts accumulate alongside physical ones.
The conditions clinicians describe as eco-anxiety and solastalgia, the grief of watching a familiar landscape irreversibly change, have no dedicated budget line in national mental health spending and no agency formally charged with measuring their disease burden.
Low-income renters carry a disproportionate share of climate health risk. Older housing stock without insulation or mechanical cooling concentrates heat exposure in the communities least able to afford alternatives. Several states have consulted on minimum energy efficiency standards for rental properties; none has yet legislated mandatory standards with teeth.
The National Recovery and Resilience Agency holds data on the socioeconomic profile of disaster-affected households, but the granular breakdown of which households have not recovered housing within 12 months, and their income characteristics, has not been publicly released.
Disclosure Without Consequence
Australia's mandatory climate-related financial disclosure regime commenced on 1 January 2025, applying first to large companies and financial institutions. 6
Smaller entities follow in July 2026 and July 2027. During a transitional period to the end of 2027, liability for misleading statements on Scope 3 emissions, scenario analysis, and transition plans is effectively suspended for private litigants, with only ASIC able to bring action.
Penalties under the Corporations Act for materially misleading climate statements range from $93,900 to $751,200 for individuals and entities. Against the scale of assets under management at institutions required to report, those figures are not a deterrent.
ASIC's greenwashing enforcement has been more assertive. Three civil penalty proceedings have produced convictions: $12.9 million against Vanguard Investments in September 2024, $11.3 million against Mercer Superannuation in August 2024, and $10.5 million against Active Super in March 2025. The pattern involves superannuation trustees claiming ESG exclusion screens that their investment holdings directly contradicted.
The Australian Prudential Regulation Authority, which conducted a Climate Vulnerability Assessment of major banks in 2022, has not translated that assessment into binding prudential capital requirements. Banks are not currently required to hold additional capital against physical climate risk in lending portfolios.
Fragmentation as Policy
The Murray-Darling Basin provides the clearest study in what jurisdictional fragmentation produces at scale. The Basin Plan was legislated to recover environmental flows. Its water buyback targets have been repeatedly deferred under sustained political pressure from irrigating states. Environmental water recovery against the legislated target remains materially short.
The Commonwealth's legal tools to compel non-compliant basin states are narrow and rarely invoked. The plan's environmental objectives are real. The enforcement mechanism is not.
State building codes, administered nationally through the National Construction Code, still fail to mandate climate-resilient design standards in all high-risk zones. Proposals to require higher standards for flood, heat, and bushfire exposure have faced sustained opposition from state governments citing construction costs and housing affordability. The irony, that the absence of those standards imposes far larger costs on future homeowners and insurers, is not reflected in the political calculus applied to their defeat.
The Insurance Council of Australia has documented a growing number of communities where insurance is becoming unaffordable or unavailable. No government holds a legal obligation to maintain affordable insurance access in those communities. No regulatory tool currently compels insurers to provide coverage.
The Shape of What Is Missing
Australia has produced considerable climate law. What it has not produced is climate law that compels. The pattern across every tier of governance is the same: targets without penalties, strategies without statutory duties, frameworks without enforcement mechanisms. The Climate Change Act records what Australia intends.
The Safeguard Mechanism instructs industry to reduce. The adaptation strategy asks departments to act. The building code could mandate resilience but chooses not to. The courts have now confirmed that neither negligence law nor judicial review will substitute for legislative design that actually requires outcomes.
The trajectory from here depends on whether parliaments are willing to write the next generation of climate statutes differently, with ministerial duties that can be enforced, adaptation standards that are mandatory rather than aspirational, and a fiscal position that does not subsidise the problem it claims to be solving at a rate of $31,000 per minute.
The legal and scientific architecture for more ambitious governance exists. Expert bodies, parliamentary inquiries, and international frameworks have all described it in detail. What is missing is not knowledge. It is political will encoded in law.
1. Library of Congress. (2022). Australia: Legislation Setting Emissions Reduction Targets Enacted. Global Legal Monitor.
2. Department of Climate Change, Energy, the Environment and Water. (2024). Safeguard Mechanism Overview. Australian Government.
3. The Australia Institute. (2026). Fossil Fuel Subsidies in Australia 2026. The Australia Institute.
4. Corrs Chambers Westgarth. (2025). Pabai decision: Federal Court finds no duty of care to protect Torres Strait Islanders from climate change. Corrs Chambers Westgarth.
5. Borchers Arriagada, N., et al. (2020). Unprecedented smoke-related health burden associated with the 2019-20 bushfires in eastern Australia. Medical Journal of Australia.
6. ASIC. (2024). ASIC urges businesses to prepare for mandatory climate reporting. Australian Securities and Investments Commission.
7. Allens. (2023). Government's Safeguard Mechanism reforms get the green light. Allens Linklaters.
8. DLA Piper. (2022). Investor-State Arbitration and Australia's Climate Change Act 2022. DLA Piper.
9. Bird & Bird. (2025). Three wins in a row: Active Super to pay $10.5 million penalty. Bird & Bird.
10. MinterEllison. (2025). Federal Court decision in Pabai Pabai underscores importance of science-based corporate emissions targets. MinterEllison.
11. Australian Institute of Health and Welfare. (2021). Data update: Short-term health impacts of the 2019-20 Australian bushfires. AIHW.
12. The Australia Institute. (2025). Fossil Fuel Subsidies in Australia 2025. The Australia Institute.
13. Gilbert + Tobin. (2025). Mandatory climate-related financial disclosure has commenced. Gilbert + Tobin.
14. Norton Rose Fulbright. (2025). The Australian Climate Case: The Pabai Pabai Decision. Norton Rose Fulbright.
15. Corrs Chambers Westgarth. (2024). Assessing your preparedness for mandatory climate-related financial disclosures. Corrs Chambers Westgarth.
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