Abbott-Hunt safeguard mechanism riddled with loopholes for polluters

The federal government’s proposed carbon pollution “safeguard mechanism,” released today, is riddled with loopholes that will allow increases in pollution, with no detail provided on the much larger role the mechanism could play post 2020.

The safeguards mechanism policy is the third major leg of the government’s carbon policy and is meant to ensure that pollution increases from major emitters don’t swamp taxpayer funded pollution reductions through its Direct Action plan. The other limb is the renewable energy target legislation, whose target was reduced earlier this year.

The government’s proposed policy on so-called ‘safeguard mechanisms’ leaves taxpayers to do the heavy lifting in reducing emissions and allows business to increase total emissions.

The emissions limits are still riddled with loopholes and will allow major emitters like power companies to actually increase their pollution levels. This proposed safeguards policy is more a pollution trampoline than a safety net.

Critically, this policy does not provide a credible long-term framework for investment in cleaning up and modernising our economy. It explicitly lets the industry from the last century off the hook and will only frustrate the billions of dollars of new investment needed in clean technology and innovation.

“The policy may well be reviewed after the next election, but there is also no clarity on the scope of this and whether it will be linked to emissions targets that are a fair and legitimate contribution to avoiding 2°C of global warming. This only increases uncertainty for business, investors and the community.

One credible element in the announcement is that it leaves the option on the table for the purchase of international carbon abatement permits to meet future emissions limits. International permits can and should play a role in assisting climate outcomes as Australia undertakes the task of modernising and decarbonising our economy.

Whatever pollution or clean energy goals the major parties announce, these will only be delivered and investment unlocked with a scalable, durable and effective toolbox of policies to achieve credible pollution reductions targets. Without this, global capital and clean energy investors will continue to flee Australia for countries like the US, the EU and China, who are delivering in this area.

The only certainty today is that the taxpayer and the budget deficit is further exposed when it should be polluters not taxpayers taking responsibility for pollution reduction. The government should rethink this proposed policy.

John Connor is CEO of The Climate Institute.