By agreeing to pass the safeguard mechanism reforms, Labor’s signature climate policy, the Greens have helped greenwash the continued expansion of fossil fuels.
The deal struck between the two parties has granted the Greens concessions. But does it mean that, as Greens leader Adam Bandt claims, “coal and gas have taken a huge hit”? There is much to make one sceptical. The share prices of Australia’s top 12 gas and coal companies have risen in the days since the deal was announced, while Tania Constable, CEO of the Minerals Council of Australia, said that despite the Greens’ “rhetoric”, “there will be very little change for the mining industry”.
Dissecting Labor’s climate policy is difficult—it’s opaque by design—and most of the mainstream media uncritically parrots the government’s claim that it will require Australia’s 215 most polluting facilities to collectively reduce emissions by 4.9 percent a year. The vagaries of the amendments agreed to win support from the Greens complicate things further.
In my recent article for Red Flag I argued that there are three key factors that make Labor’s safeguard mechanism a cover for the ongoing expansion of fossil fuels. First, facilities can offset their emissions by buying dodgy carbon or safeguard credits. This allows them to continue emitting while paying a pittance for emissions reduction schemes that have been found to be “largely a sham”.
Second, the mechanism covers only scope 1, or on-site, emissions. This means facilities are not required to reduce the emissions created by their products, such as the coal and gas extracted and exported overseas—Australia’s main contribution to global emissions.
Third, the safeguard mechanism retains the “production-adjusted” baseline framework, meaning the cap on a polluting facility’s emissions rises and falls with its production. This means that a facility that doubles its production, doubles its emissions cap. It must only reduce emissions relative to this new, raised cap by 4.9 percent.
How have the Greens dealt with these problems?
Offsets remain in place. Now, however, if a company uses offsets to meet more than 30 percent of its requirements, it must explain itself. That is all.
Approvals for the dodgiest class of offsets are to be frozen and audited. That is, no new human-induced regeneration projects (those involving landholders “regenerating” areas of forest) will be approved for now, but those which are currently accruing carbon credits will remain. Last year whistleblower Professor Andrew Macintosh found that in NSW and Queensland 50 percent of all these credits were issued for projects where the forests actually declined.
The Greens’ amendments do nothing to reduce scope 3 emissions, which are “more than eight times higher” than the scope 1 emissions covered by the mechanism, according to the Climate Council.
The production-adjusted framework remains but may be constrained by what the Greens are boasting as their biggest win—a “hard cap” on the emissions produced by all the facilities covered by the safeguard mechanism put together. Bandt claims the government will now be “breaking the law” if the facilities’ emissions don’t decline from their current aggregate of 140 million tonnes of CO2 a year to 100 million tonnes by 2030.
Because these are gross and not net emissions, offsets don’t make a difference, and allowing facilities’ caps to rise with production would blow the budget. Presumably this would cause headaches for the government, which would have to square the circle of shrinking total emissions at an aggregate level while emissions at a facility level are allowed to grow.
Although it’s the linchpin of the Greens’ claimed victories, and the basis for Bandt’s claim that under the amended policy “about half” of the 116 new coal and gas projects currently in the pipeline will be rendered unviable, details on this “hard cap” are vague.
For a start, only the Greens are calling it a “hard cap”. Minister for Climate Change and Energy Chris Bowen describes it differently. According to him the process will be first for the Climate Change Authority (the members of which are appointed by the government of the day) to advise the minister that the cap has been exceeded. The minister will then, in Bowen’s words, be obliged “to consult and amend the rules”.
There is a lot of room for interpretation here. The Financial Review reads it as meaning that “a future government will have the authority to intervene to change—or possibly waive—the rules, if it chooses to do so”. And if this power of waiver isn’t enough, according to Crikey Bowen has, “already signalled willingness to work with the Coalition to amend the new rules if need be”.
What about the other Greens “wins”?
All new gas fields will need to be net-zero from the start. But again, this only includes scope 1 emissions, which is not very useful when a majority of gas projects’ emissions (an estimated 75 percent in the case of the Beetaloo Basin) are scope 3. Companies can simply pay to offset the small fraction of their total emissions that are counted under the rules of the safeguard mechanism.
So the amended policy won’t “derail” the Beetaloo Basin projects as the Greens have claimed. The CEO of Tamboran Resources, one of the three companies exploring for gas in the basin, welcomed the amendments as creating "certainty" for his company's project: it was already meeting the net-zero requirement.
The deal will also secure the Greens’ much-anticipated climate or “safeguard” trigger. Now the government will have to consider the impacts new projects will have on the climate. It is not obliged to stop them.
Only by omitting the vast majority of Australia’s emissions and pinning everything on vague obligations and powers used at the discretion of a government that, as Bandt rightly points out, is the “political wing of coal and gas corporations”, can you claim this deal as a win.
In reality, this deal is a win only for the polluters. The government can assess and ignore the climate costs of new projects. Coal and gas companies can continue production, tossing a tiny fraction of their profits towards offsets. They will not even be encouraged to reduce the amount of fossil fuels they produce, only the emissions they make in producing them.
Now Labor can say that they are achieving real emissions reductions with the support of the Greens. This is not a step forward for climate action. It is a step forward for the highest form of climate denialism, greenwashing.