Australia’s Safeguard Mechanism legislation will force big polluters to cut carbon emissions

Carbon Emissions Safeguard Mechanism – Mashup: Screenshot of Climate Counicl YouTube video with text

After weeks of negotiating, the Australian government’s key climate carbon reduction program was passed by parliament on March 30, 2023. The new law strengthens the weak policy known as the Safeguard Mechanism and aligns it with the commitment to reduce carbon dioxide emissions by 43% by 2030. The nation’s 215 biggest polluters will be required to lower their levels by 4.9% each year until then.

Australia's Climate Council produced this video explainer:

The Greens party, whose support was crucial in the Senate, had been insisting on no new coal or gas projects in line with the recent IPCC report, and less reliance on carbon offsets.

A carbon offset is a reduction or removal of emissions of carbon dioxide or other greenhouse gases made in order to compensate for emissions made elsewhere. Usually this involves buying carbon credits from projects such as tree planting or land regeneration. The effectiveness of offsets at reducing emissions has been questioned by many analysts. A study by Climate Analytics argues that:

The impact of the Australian government allowing fossil fuel companies access to unlimited offsets – especially from the land sector – would give a green light to new coal and gas production, lead to a continued rise in emissions and threaten Australia’s ability to meet its climate targets.

While the negotiated compromise does not include this guarantee, they have achieved several improvements. These include a so-called hard cap on total emissions, requiring that polluters reduce their total emissions and not just rely on carbon offsets. In addition, there will be tougher requirements before new fossil fuel projects are approved. This includes assessment of the impact of their carbon pollution.

The Greens have been frequently criticised for their refusal to vote for Labor’s Carbon Pollution Reduction Scheme in 2009, which was defeated in the Senate. In contrast, in 2011 the Greens supported a carbon price scheme, which was ditched by the new conservative government in 2013.

Many have long memories on both sides, including current government minister Murray Watt:

The Greens showed that they were prepared to negotiate with the current government this time as they had in 2011.

Australia's environmental movement has been divided over the best way forward. Prime Minister Anthony Albanese is fond of arguing that we should not “let the perfect be the enemy of the good.” The Australian Conservation Foundation (ACF) was convinced, arguing that the legislation should be strengthened if possible, but passed nevertheless. Long-time environmental activist and founder of the Greens party, Bob Brown, reacted by cancelling his life ACF membership. He later condemned the compromise.

Renew Economy, a website that focuses on the green energy transition had been a strong opponent before the deal was reached:

If the Safeguard Mechanism remains a massive wish-fulfilment exercise for the corporations making super-profits selling fossil fuels overseas, rather than an appropriately powerful scheme to bring about real emissions reductions, Australia will truly become known globally as the international centre of climate delay.

But it responded positively to the final legislation:

Environmental campaigners, Environment Victoria, wanted no new coal or gas projects, but acknowledged the positves in the agreement. It agreed with the Australia Institute’s take:

Although elements of the corporate sector are opposed to the new legislation, the common view seems to be that it is positive overall and creates certainty for businesses in the move toward a net-zero emissions future. The Business Council of Australia (BCA), which represents most of the big polluters, welcomed the deal:

The passage of Safeguard Mechanism legislation is a big step towards getting on with the ‘how’ of this transition, Business Council chief executive Jennifer Westacott said.

“Make no mistake, this is critical progress towards securing a transition that delivers new jobs and new opportunities.

“We welcome the passage of this legislation and the adoption of key elements of the Business Council’s plan to reach net zero emissions.

“After more than a decade of uncertainty and equivocation employers now have certainty about our emissions targets and how we’re going to get there.

However, the Minerals Council of Australia expressed serious concerns:

The challenges to meet the Safeguard Mechanism shouldn’t be underestimated.

If we are not careful, some facilities in Australia will close.

Not only would that damage our economy and slash tens of thousands of regional jobs and billions in investment, it also would push the emissions reduction burden on to other nations that are less able or less willing to decarbonise.

The Greens’ demonisation of coal also does not help the Australian economy, particularly as the nation continues to rely on coal powered energy generation to keep the lights on and keep prices down.

On the other hand, the ACF is just one of many environmental groups that will continue to campaign for stronger climate action:

The Safeguard Mechanism falls short of what the science demands, and it doesn’t address Australia’s biggest source of climate pollution – coal and gas exports. But these changes are important steps towards getting to where we need to be.

Either way, it seems that climate policy and action will remain either a glass half full or half empty issue for many Australians.

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