by Sophie Vorrath, Renew Economy: http://reneweconomy.com.au/2015/direct-action-a-damp-squib-will-not-touch-australias-top-20-polluters-88093
Just as US President Barack Obama moves ahead with even tougher cuts on greenhouse gas emissions from power plants across the country,
a new report out of Australia has highlighted just how ineffectual the
Abbott government’s key climate policy - Direct Action - will be in
cutting industrial emissions.
The report, released by energy market analysts RepuTex on Monday,
suggests that just 30 of Australia’s 150 largest emitting companies will
be required to reduce emissions under the government’s Emissions
Reduction Fund (ERF) “Safeguard Mechanism” - a “light touch” approach,
says RepuTex, that will render the policy ineffective.
Moreover, Reputex’s analysis finds that none of Australia’s 20
largest emitting facilities are expected to be accountable for their
emissions, despite almost all being forecast to grow emissions over the
next 10 years.
Here’s why: The Coalition’s so-called Safeguard Mechanism means to
establish emissions baselines for around 150 companies from July 1,
2016, in an effort to ensure emissions reductions purchased through the
$2.55 billion ERF are not displaced by a rise in emissions elsewhere in
But According to RepuTex, the majority of these proposed pollution
baselines will be set so high, the companies will not exceed them, even
if their emissions grow.
This is because the scheme proposes to set historic baselines at the
‘high point’ of each existing facility’s emissions over the past five
years, the report explains.
Given industry emissions have generally fallen over the last five
years, this will allow companies to increase their emissions from
current levels without facing a liability.
As the report notes, the findings place further pressure on the
government to explain how it will curb emissions growth, ahead of the
announcement of Australia’s post-2020 emissions target, scheduled for
after Parliament resumes next week.
They also highlight just how far behind other major economies Australia stands on emissions reduction and climate change policy.
In the US on Sunday, President Obama moved ahead with unprecedented pollution controls for American power plants, as part of an effort to secure a legacy on fighting global warming that would extend beyond the 2016 presidential campaign.
“Climate change is not a problem for another generation,” Obama said in a video posted to Facebook. “Not anymore.”
On top of this, more than a dozen US corporate giants signed up to a
government-led pledge to slash their emissions and invest up to $140
billion in low-carbon investments - including 1.6GW of renewable energy
capacity - last week, in a demonstration of their support for a global
climate change deal at the UN’s Paris Summit in December.
So, while the US government tightens the screws on its heavy emitting
power companies, and invites others to self-regulate, the Abbott
government’s key policy effectively provides “a significant amount of
headroom” to grow emissions, says RepuTex executive director Hugh
“With baselines set so high, we project that emissions will actually
grow under the safeguard scheme - by around 20 per cent - so the policy
will fail to curb emissions growth, let alone assist in reducing
emissions to meet our new post-2020 emissions target,” he said.
The report notes that, of the 30 companies expected to be caught by
the government’s baseline scheme - operating 85 facilities - existing
metals manufacturing, coal mining, oil and gas, and transport facilities
are expected to have the largest exposure.
Meanwhile, after all rules and concessions are applied, not one of
Australia’s 20 largest emitting facilities is expected to exceed their
baseline – despite almost all being forecast to grow their emissions
over the next 10 years.
This means the largest electricity generators such as Loy Yang A and
B, Hazelwood, Bayswater, and Yallourn are expected to avoid exceeding
their sectoral baseline under the scheme, while new LNG export
facilities Wheatstone, Gorgon, Itchys and Pluto are also expected to
avoid facing any liability.
Combined, RepuTex forecasts these largest facilities will account for
over 50 per cent of all emissions covered by the safeguard mechanism by
2020, yet not be liable for emissions increases.
“Given the ineffectiveness of the scheme, it is untenable for the
policy to stay in its current form, particularly with the steepest
increase in Australia’s emissions projected to occur in the next 4
years,” said Mr Grossman.
“It is counter intuitive to let emissions grow while at the same time
implementing a more ambitious post-2020 emissions target. This approach
will simply impose a far greater cost at a later time,” he said.
“It is inevitable that tighter baselines, or a cap on emissions, will
ultimately be set, particularly given the significant abatement task we
are likely to face to meet our new emissions target,” said Grossman.
“Should even minor adjustments be made to current policy, we
anticipate the safeguard compliance market may abate emissions by up to
500 million tonnes through to 2025, covering around 100 companies” he
“This would better manage emissions growth, particularly in the Power
and Energy sectors, and would more effectively safeguard the abatement
being purchased by the Emissions Reduction Fund, which will be wholly
displaced under the proposed scheme” said Mr Grossman.