It’s deeply bizarre that one in every of Labor’s most expansive local weather insurance policies can also be one in every of its least talked about. The “safeguard mechanism” — a coverage that purportedly limits the greenhouse gasoline emitted by Australia’s heavy trade and fossil mining services — covers a full third of Australia’s home emissions. But it barely exists in public discourse. Why?
Safeguard has a grim origin, with Labor having rejigged a Coalition coverage as an alternative of designing its personal (wedging opponents takes priority over deploying coverage that works). Safeguard’s progenitor, the Coalition’s “emissions discount fund”, set limits excessive above precise emissions (amusingly, as emissions rose, these limits typically gently floated upwards).
It was an IKEA houseplant: it regarded actual, however solely from a fantastic distance.
As a result of larger local weather coverage requirements confronted by Labor, it needed to obtain the identical purpose utilizing totally different techniques. The carbon offsetting trade got here to the rescue.
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Just like the outdated scheme, safeguard units emissions targets for every facility. In contrast to the outdated scheme, these targets fall over time, which means theoretically the ability ought to minimize its air pollution to conform. Naturally, there’s a obvious loophole: an organization can meet the targets even when its air pollution is above the restrict by buying an equal variety of Australian carbon offsets.
An alternative choice is that overperforming services that are below their goal can “commerce” credit score models with others over theirs, however that is unlikely within the brief time period (and could be costlier for a polluter than simply shopping for regular offsets).
Safeguard is continuously defended (and derided) as a type of “carbon pricing” — being compelled to pay for offsets is a monetary disincentive towards excessive emissions. Offsets are exceedingly low-cost, have the additional benefit of pretend neutralisation of your local weather harm, and fossil gasoline corporations swimming in record-breaking tremendous earnings solely use a tiny fraction of these earnings for the required variety of offsets. Worst of all, the cash results in the pockets of carbon buying and selling firms, moderately than the federal government.
A red-hot political debate ensued: the Greens pushed for actual emissions cuts, however Labor gained the vibes contest. Tuning safeguard to mandate actual, deep emissions cuts was decried as extreme perfectionism that will resurface Australia’s legendary “local weather wars”.
As soon as safeguard handed, it was memory-holed. It solely will get exhumed when Labor tries to defend its passivity across the growth of coal and gasoline. When Prime Minister Anthony Albanese was pushed on together with a “local weather set off” in mine approvals, he muttered that “local weather points are handled by way of the safeguard mechanism”. When Atmosphere Minister Tanya Plibersek was pressed on the identical, she dismissed it, saying, “The safeguard mechanism is the best way that we cope with carbon emissions on this nation … it’s bringing down carbon emissions.”
Safeguard got here into impact July 1, 2023, and we gained’t get official knowledge on its first full monetary yr of operations till April 15. Nonetheless, we are able to prod present knowledge to verify if it truly is “bringing down carbon emissions”.
Quarterly federal emissions knowledge offers us a tough overview. Wanting on the sectors that cowl heavy trade in Australia (with the caveat that non-safeguard services are lined right here too), there was zero noticeable distinction to every sector’s greenhouse gasoline emissions from mid-2023 by way of to the top of 2024:
A Local weather Change Authority (CCA) “progress report” examined the primary yr of safeguard intimately utilizing preliminary knowledge, and located 153 of the lined 215 services had emissions larger than the restrict set by the Clear Vitality Regulator. Thirty-one of these services exceeded their limits by 30%. In combination, the entire websites that should be regulated by this scheme emitted 10.7 million tonnes of carbon dioxide equal above the whole restrict.
Briefly: no change past enterprise as traditional, regardless of the brand new targets. However the huge, widespread beaching of targets means the assured mass buy of “Australian carbon credit score models”, or ACCUs.
Safeguard is an unimaginable demand fabrication engine for carbon offsets. The CCA cites modelling that reveals between 58% to 68% of compliance with the scheme might be met utilizing offsets as an alternative of actual emissions reductions out to 2030. “Safeguard services’ reliance on ACCUs to fulfill obligations is forecast to drive ACCU demand out to 2030. ACCU costs are forecast to extend on account of the expansion in demand for ACCUs”, the report says.
The CCA presents a assured forecast of future carbon offset earnings, and a nervous shrug about whether or not actual emissions might be minimize. That’s earlier than it particulars that there might be 31 million tonnes of recent emissions to be added to the scheme’s protection as much as 2030, 21 million of which relate to coal, oil and gasoline “carbon bomb” initiatives.
Whereas it’s virtually sure the primary yr of the scheme did nothing for actual emissions, it has already created an enormous surge in demand for Australia’s extremely criticised carbon offsetting scheme. The Clear Vitality Regulator’s new quarterly report reveals the rising stockpiles of carbon offsets particularly for assembly the safeguard mechanism’s ratcheting targets:
The very best emitters in safeguard pays a pittance to indefinitely adjust to the scheme. However they nonetheless think about it an irritation and have restarted requires compliance to be opened as much as permit low-cost worldwide carbon offsets — much more controversial than Australia’s closely criticised scheme.
Earnings for carbon markets thrive in two circumstances: “bold” net-zero targets paired with zero will to really cut back emissions. Voluntary targets are already beginning to shudder and shift due to the unashamed fossil-fascist permission area of TrumpWorld 2025. If Peter Dutton had been to turn into prime minister, he might wreck this regulatory seize paradise for Australia’s fossil gasoline and offsetting industries. Equally, Dutton would possibly recognise the worth of mandated greenwashing schemes. The offsets foyer is already pleading with him to maintain it in place.
You aren’t meant to look too carefully on the safeguard mechanism. The formulation, acronyms and faux-complexity are there to obscure the easy twin tales of protectionism and cronyism from two huge, interlocking fossil/offsetting industries.
It’s a plastic houseplant: you permit it on the windowsill and let it look vaguely like one thing actual and breathing.
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