What does the safeguard mechanism deal mean for climate action?

The Albanese government’s reform to the safeguard mechanism is a major boost to Australia’s climate action, imposing a hard cap to stop the nation’s industrial pollution rising and forcing companies to shell out hundreds of millions of dollars to offset their greenhouse emissions.

But the deal struck with the Greens to pass the reform doesn’t rule out new fossil fuel production, which the world’s climate scientists say is needed as a last-ditch chance to stop 2 degrees or more of global warming triggering irrevocable damage.

The government’s emission reduction reform to beef up the safeguard mechanism is expected to pass the Senate this week.

It also doesn’t force cuts deep enough to bring Australia into line with the global action required to meet the Paris Agreement target to limit warming to 1.5 degrees.

However, it’s a major achievement for Climate Change and Energy Minister Chris Bowen, who has for the first time set binding pollution limits on the nation’s 215 biggest industrial emitters.

It’s also a major shift from the Greens, with the minor party providing crucial support for the reform despite the scheme not meeting the party’s demands for the government to veto new coal and gas projects.

Under the safeguard mechanism, poised to pass the Senate this week, industrial polluters that generate more than 100,000 tonnes of greenhouse gas a year can choose to cut their emissions by investing in cleaner technology powered by renewables, or they can purchase carbon offsets to shrink their greenhouse footprint.

The government legislated last year a climate target to cut Australia’s emissions by 43 per cent by 2030. The safeguard mechanism is the government’s major move to meet its goal – along with funding to roll out renewable energy across the grid – and is designed to deliver about one-third of the pollution reduction needed by the end of the decade.

The Albanese government focused its cuts on industrial pollution and has the backing, so far, from the business community.

Former Labor governments took a broader approach. In 2009 the Rudd government proposed an economy-wide carbon trading scheme. The Greens blocked the reform arguing it did not deliver enough climate action, prompting accusations they had let the pursuit of perfect policy defeat a good policy.

The Gillard government won Greens’ support for a carbon price in 2012, but became the focus of the following election campaign and was repealed in 2014 as an election commitment of the Abbott government.

But the drumbeat of global warming rings louder with every new natural disaster and the need to cut carbon emissions created a dilemma for the Greens.

Climate scientists say the need to boost emissions reduction is desperate, which means sticking to their principles on coal and gas would have delayed the near-term results promised under Bowen’s scheme.

With the federal opposition committed to rejecting the safeguard mechanism the Greens have reversed their previous approach to climate policy, which will no doubt disappoint some policy purists, but banked a win that was a decade in the making.

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