Climate Change Minister Chris Bowen has announced a Federal Government plan to lower carbon emissions for Australia’s largest emitters.
This will be achieved by adapting an existing program called the ‘safeguard mechanism’, which requires large emitters to pay for any emissions above a given level.
Here’s what you need to know.
The context
The new Labor Government has committed to reduce emissions by 43% by 2030 and to achieve net-zero emissions by 2050. It passed these targets into law last year.
Before the election, Labor announced a number of policies intended to achieve these targets.
This policy, targeted at around 215 of Australia’s highest-emitting businesses, will require legal changes, which the Government plans to bring before Parliament this year.
The reforms
The Government’s proposal is to change the rules for the ‘Safeguard Mechanism’, which was introduced by the previous Coalition Government. It requires large emitters to pay for any emissions above a baseline set by the Clean Energy Regulator.
The baseline is currently set to reflect ‘normal’ levels of emissions for each emitter, only charging them if they emit above this normal level. The Government proposes to now reduce these baselines every year, which it says will lead them to reduce emissions by about 4.9% a year until 2030.
Who does it impact?
The reforms would apply to any Australian facility that produces over 100,000 annual tonnes of greenhouse gases.
This equates to about 215 polluters, which are responsible for about 28% of national emissions. Under the new plans, they’ll be asked to reduce 28% of Australia’s emissions.
The Government claims the reforms will save 205 million tonnes of emissions – equivalent to removing emissions from two-thirds of Australia’s cars.
Polluters that don’t meet reduction targets would face a $275 fine for every tonne in excess of their target.
Money for polluters
Australia’s biggest emitters will also be offered a total of $600 million in initial Government funding to ‘de-carbonise’.
This money will come from a fund targeted at supporting the transition to clean energy, which totals $1.9 billion.
Bowen defended using taxpayer money to support the biggest polluters, telling the ABC that Australia “can’t afford not to be all in”, and it was in the “national interest”.
What’s next?
The reforms have been released for consultation until February and will be introduced to Parliament later in the year.
The Government plans to have the changes in place by July.
