After months of argument, fierce criticism and vast volumes of hot air, the Australian government’s centrepiece climate bill targeting big carbon polluters looks like it will pass through parliament after a deal was struck yesterday with the Greens.
As far as climate deals go, this was a big deal.
The original Safeguard Mechanism bill was criticised as safeguarding the fossil fuel industry more than the climate. It was not only regarded as toothless in terms of reducing total emissions, but worse… it gave big carbon emitters a license to keep emitting. The negotiated bill instead now places a hard cap on Australia’s total emissions and has huge ramifications for the future of coal and gas in Australia.
But first, how we got here.
In May last year, on the night Anthony Albanese was elected as Australia’s new Prime Minister, he promised the jubilant crowd gathered that amongst a long laundry list, his new government would, “end the climate wars”. His government’s Safeguard Mechanism bill however has fired up the climate wars for months now.
What is the Safeguard Mechanism? It’s both complicated and simple at the same time. It’s the Albanese government’s big ticket climate item for their first term in government, and a key part of their commitment to reduce Australia’s carbon emissions by 43 per cent by 2030.
The Safeguard Mechanism is a framework that applies to Australia’s biggest 215 carbon emitters, with each of them having a ‘baseline’ level of emissions they’re allowed each year. If they emit below the line they receive carbon credits. If they emit above the line they are forced to pay to offset those extra emissions. The baselines are then reduced every year to collectively reduce annual emissions by 205 million tonnes by 2030.
In theory, it sounds great, but the bill drew huge criticism, firstly around its reliance on carbon offsets. Some of the accepted means of carbon offsetting under the scheme include tree planting, agriculture management and energy efficiencies. They also include highly controversial measures like carbon capture and storage and “avoided deforestation” – not cutting down forests. Accurately measuring the carbon savings with all of these measures is difficult, and there are already cases where the value of offsets has been wildly exaggerated. Some experts have gone as far as describing many of Australia’s carbon credit schemes as a “largely a sham”.
The other issue was that there was no cap to the carbon offsets. You could pollute all you liked, provided you paid for offsets. You could effectively promote yourself as an emissions-conscious business – net zero even – while continuing to pump the same volume of emissions into the atmosphere that you did before. Taken to its limit, you get carbon neutral oil and gas companies.
The biggest sticking point however was how the Safeguard Mechanism applied to the fossil fuel industry. The list of businesses it will initially be applied to includes steel, aluminium, cement, airlines, fertiliser… and coal and gas, which are the biggest emitters in the country by a factor of plenty, if you include the emissions created by their exports (which they and the government don’t).
When the Safeguard bill was first released, the Greens were quick to make their condition of support clear – “no new coal and gas.” They had a point. The IPCC report, which dropped last week, concurs. Yet at the same time the federal government were spruiking that the Safeguard Mechanism would prevent 205 million tonnes of carbon from being released into the atmosphere, they approved the Scarborough gas project in Western Australia, which alone is expected to release 1.6 billion tonnes of carbon over its lifetime… and Scarborough is just one of 116 new coal and gas projects in the pipeline across the country. It was one step forward, ten steps back.
With Labor never likely to agree to stopping all new coal and gas, the Greens have gone directly to the purpose of the scheme with their negotiations – the reduction of total emissions. While the Safeguard Mechanism might have capped emissions from individual businesses, there was no total emissions cap, meaning new coal and gas projects could open up and simply start ‘growing the pie’.
Under the deal struck with the Greens, there will be an annual carbon cap of 1.233 billion tonnes, declining by 140 million tonnes every year. Any new coal and gas projects will need to be assessed against the cap by the Climate Change Authority, and their potential emissions added to the total carbon budget. Along with tightening operating restrictions, the cap will render many new coal and gas projects uneconomical or force the government to reject them. Greens Leader, Adam Bandt yesterday claimed the new conditions would see half of the current 116 planned coal and gas projects across the country not go ahead, including the Beetaloo gas field in the Northern Territory and the Barossa field north of Darwin.
The conditions agreed to yesterday mean that for the first time, coal and gas projects in Australia must be assessed against their impact on the climate.
The bill is expected to pass within the next two weeks.