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Labor and the Greens have reached a compromise on climate legislation

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The Greens have compromised with Labor over the climate change bill, which will now see it be passed into law.
safeguard mechanism the greens

The Greens have agreed to support Labor’s key ‘safeguard mechanism’ bill after negotiating some changes, effectively guaranteeing it will pass into law.

Australia’s biggest emitters will need to reduce their emissions over time under this bill.

The climate compromise between Labor and the Greens will ensure any major new polluters don’t undermine the Government’s planned emissions reduction. The Greens claim this change will “derail” new coal and gas projects.

What is the safeguard mechanism?

The bill makes changes to the ‘safeguard mechanism’. That is a program created by the Abbott Government that effectively requires around 215 large emitters to pay for any emissions above a ‘baseline’.

The baseline has previously been set at a ‘normal’ level of emissions for each business. The Government proposes to start reducing the baseline by 4.9% a year to reduce emissions.

The disagreement

The Greens and independents have been concerned there are too many exceptions to the rules.

One concern has been that a business would be able to buy an effectively unlimited number of ‘credits’ to make up for overshooting its baseline.

Another concern has been that baselines are calculated separately for each business, which could mean the total emissions are higher than planned if there is an unexpectedly high number of new coal and gas projects.

Climate compromise between Labor and the Greens

The Government has agreed to put in place a total cap on emissions for all businesses covered by the program, calculated over a five-year period.

If this total cap is exceeded, the Climate Change Minister will need to tighten the rules on businesses to ensure it is met. The Minister will have broad powers to do this – for example, by further lowering baselines or effectively rejecting a new project.

The total cap would be in law and could not be changed without Parliament’s approval.

The Government has also agreed to tougher emissions requirements on new gas projects including the Beetaloo gas project in the Northern Territory, and restrictions on government grants supporting coal and gas projects.

There will also be some limits on the use of credits, including requiring any business using credits for over 30% of its baseline to explain why they’re not reducing emissions more.

Some businesses – including steel, aluminium and cement manufacturing – will be able to access lower baselines.

Bill set to pass

The bill should now pass into law with the support of the Greens and the Jacqui Lambie Network.

Minister for Climate Change and Energy Chris Bowen said the changes would “strengthen accountability, transparency and integrity” and thanked the Greens for “strong engagement”.

Adam Bandt said “everyone who despairs about the future under the climate crisis… should have a spring in your step today, because we have shown it is possible to take on the coal and gas corporations and win.”

Coalition opposes

The Coalition opposes the bill.

Shadow Climate Change Minister Ted O’Brien said today the deal between Labor and the Greens would “make the Australian economy weaker and the Australian people poorer” and would “decapitate” Australia’s energy supply.

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