The new terms negotiated into the safeguard mechanism today, help to take Australia's climate policy one step closer to a science- based approach.  Whereas the previous version of the policy allowed covered entities to grow their emissions provided they bought carbon offsets to account for such growth, the new version introduces a hard emissions cap into the scheme which will reduce over time. This cap will stop individual fossil fuel projects growing their emissions footprint over time and burning through the country's carbon budget. The cap will likely change the economic viability of some proposed new fossil fuel projects, but it is likely that some projects will continue to be built, inconsistent with what the IPCC and others say is necessary to achieve net zero emissions by 2050. Aside from the cap, the changes also introduce important conditions on gas facilities, financial support to help manufacturing and trade exposed sectors to decarbonise and a review into a carbon border adjustment mechanism which might impose a cost on imports from countries that don't price carbon. Overall these are important developments in the policy which will continue to need development and expansion over time.

It is reassuring to see the Government and the Greens agreeing on a total cap of greenhouse gas emissions under the Safeguard Mechanism. This means that total emissions from big polluters in Australia will not rise, even if new coal and gas will be approved. However, for the climate this is something of a Pyrrhic victory as it does not guarantee that emissions are reduced fast enough to keep global warming close to 1.5°C. This is because a) offsets (which are inefficient) will still be allowed and b) the cap only includes domestic (Scope 1 & 2) emissions but not those from burning exported fossil fuels overseas (Scope 3). These could potentially still go up.

Climate science unequivocally argues for the need to cut emissions by around 70% by 2030 to have a realistic chance to limit warming to 2°C this century; any new coal and gas projects would serve to undermine this ambition.

While the ‘hard emissions cap’ negotiated between Labor and The Greens does not equate to an outright ban on new fossil fuel projects in Australia, it raises the bar for the resources sector in that it effectively halves the allowable emissions of new projects. The resultant cost increases may render many of the 116 projects currently awaiting Australian government approval financially unviable; from a climate perspective, a step in the right direction.

Considering the national and international climate change urgency and the ambitious emission targets, more drastic policies and regulations were long overdue. The safeguard mechanism bill will be a great opportunity for Australia as a nation to push towards the net-zero emission targets in the coming years, while it imposes emission limits on the 215 largest-polluting facilities in the country.

Overall, the proposed mechanism may seem to be far-reaching, however, this will provide a significant motivation for many industries involved across the nation to implement the proposed emission reduction policies and technologies in their operational process and planning. It requires those companies to cut, or pay offsets, to reduce their emissions by 4.9% each year to 2030. Although there is limited information in the bill, the overall picture indicates a substantial step towards Net-Zero targets.

One important consideration is how we should achieve our emission targets while saving our high-priority sectors and mass industries, which are way behind the national climate change commitment. Some of the ongoing major projects and many of our critical industries like the steel, aluminium, and cement sectors, perhaps require governmental subsidies and a more complex roadmap which consists of multiple emission reduction milestones along with several phases of state and Federal Government support.

This is progress. Remember, the Safeguard Mechanism is an Abbott-era invention, designed to fail. Labor said they wanted to improve it, and with this agreement with the Greens, they have. We finally have a stated cap on emissions in these sectors, and one that will decrease over time.

It is indeed better than the do-nothing policy Australia has had for over a decade. But, as the IPCC reminded us last week, current policies simply are not enough. This policy refinement should only be considered a start. Australia needs to push harder, and faster, to eliminate emissions from fossil fuels in all sectors.

Greens' support for the Albanese governments’ safeguard mechanism bill reflects how the party has changed under Adam Bandt’s leadership.

Once a party of protest, the Greens are now willing to compromise to shape policy outcomes. 

Adam Bandt has achieved meaningful concessions: most notably a hard cap on emissions (initially set at current emission levels of 140 MT per annum).
However:
-    the Greens have backed down on their demand for a complete ban on new coal and gas projects. 
-    the Greens have accepted that ‘carbon offsets’ will play a significant role in reaching emissions targets, but have won new measures to improve the integrity of carbon offset regulation.

14 years ago the Green Party refused to compromise on their ideals, and so sided with the Liberals to vote down the Rudd government’s carbon pollution reduction scheme. Today they have put that history behind them by choosing the path of pragmatism. 

Ironically, while the Safeguard Mechanism was originally developed by the Abbot government, it is a Labor-Greens deal which will see it finally begin to impact on industrial emissions.

The agreement by the Greens and ALP Government on an accelerated removal of fossil fuels sends a very strong signal to industry and banks that they must do better. The detail is still needed but the message is quite clear that there will be no hiding place and that 43% by 2030 implies big reductions every year. However, it is not clear how new coal and gas projects fit into this. It is clouded in process detail. 

In order to reach 43% by 2030 there will be an overall reduction in emissions from the big emitters that are part of the Safeguard Mechanism, so how do new big emitters fit in?  I cannot see how existing industries will take all the pain of investing in new technology in order to allow big companies like Woodside to be allowed to grow their business around new gas fields. This cost transfer from big industries like Bluescope and cement manufacturers to new gas fields such as Browse is in fact a subsidy from the Federal Government. This will be passed on from Bluescope and cement manufacturers who will have to pay billions of dollars more for their projects, and this will be passed onto us consumers in cities. 

There is another problem as 70-80% of the greenhouse emissions from projects like Browse are not considered to be part of the Australian climate accounting in the 43% by 2030 target; the gas and coal is exported and these emissions are the big problem globally and will be accounted in other nation’s emissions. These new global markets for Browse and other gas and coal may collapse anyway due to bank finance being withdrawn. Then, the subsidy will have been lost instead of assisting the companies here to get into renewables and industrial processes without fossil fuels faster. 

I can only think that in the detailed processes now being created by the Safeguard Mechanism legislation there will be wriggle room for the Minister to stop more of these new fossil fuel projects and create a historic legacy of serious climate change mitigation.

The Climate and Health Alliance commends the new agreement to significantly improve the safeguard mechanism. The hard cap on emissions, tougher regulations on offsets and reducing subsidies are all important improvements towards meaningful climate action."

"This is a good step forward, but stronger science-based policies that align with our international obligations are necessary to protect population and planetary health."

"Fossil fuels are dangerous for our health at every stage of their production and combustion. Replacing them will have immediate health benefits for all Australians with cleaner air and water, and contribute to a stable and safe climate future.

"We look forward to continuing work with the Australian Government to ensure our climate policies are promoting public health and wellbeing.