Submission to Safeguard Mechanism consultation
Australian Projections advises on issues of national policy, such as aged care, education and energy. We are trying to help Australians and their politicians understand the Safeguard Mechanism, which affects facilities emitting more than 100,000 tonnes of carbon dioxide equivalents a year.
The consultation paper notes that the Mechanism has not been effective in reducing emissions. Every aspect of the Mechanism should be critically examined, so that it can help achieve Australia’s target of net zero emissions by 2050.
Many Safeguard facilities involve heavy capital expenditure, expected to be recouped over many years. An abrupt reduction in the emissions limit for such a facility might result in a law suit for lost profits. Advice from the Attorney-General is needed on Australia’s potential exposure to such claims.
The Australian-United States free trade agreement recognizes our right to establish our own levels of environment protection, but requires procedural guarantees and public awareness.
Australia’s emission targets to 2030 might be achieved by a faster transition to renewable sources of electricity. Would cheaper, more reliable electricity be provided by greater use of local renewable generation and storage? How quickly can this be done? Expert analysis by the Australian Energy Market Operator is needed.
The ALP’s “Powering Australia” policy requires baselines to be set for each facility, in close consultation with industry, and carefully considering the available and emerging technologies in each sector. This may result in different facilities having very different paths to net zero.
Virtually all the present Safeguard facilities might be classed as emissions intensive or trade exposed. We suggest that no distinctions be made on these grounds.
As Australia’s emissions reduce towards net zero, fewer firms will exceed the 100,000 threshold, and the effectiveness of the Safeguard mechanism will be reduced. The threshold could be reduced in line with Australia’s emissions.
Some Australian states have similar or more ambitious emission targets than Australia’s, and have closer control through such mechanisms as environment protection licences. The Commonwealth should work with the states.
A detailed national plan is needed, taking into account the location of each of the Safeguard facilities. A national plan would allow grants to be directed more effectively, with new industries broadly replacing old ones, and with lower impacts on communities.