CMI welcomes the Government's consultation process on a new Safeguard Crediting Mechanism, a key recommendation of the 2020 'King Review' into Australia's emissions reduction policies. CMI also welcomes the Grattan Institute report launched today as a guide to the bold steps needed to achieve net-zero emissions by 2050.
The Safeguard Mechanism requires large emitting facilities to manage their emissions below an approved baseline. The Government's discussion paper released today, proposes a range of options for how emissions reductions below Safeguard baselines could be measured, credited, and purchased.
CMI notes the proposed Safeguard Crediting Mechanism represents an opportunity to better integrate emissions reduction considerations into business investment decision making. This could provide a technology-switching incentive to existing industrial and transport Emissions Reduction Fund methods that have received low uptake to-date.
Responding to the 2020 'King Review', the CMI highlighted key considerations for the evolution of the Safeguard Mechanism in the context of Australia's growing investment in the carbon market, including that:
· a number of suggested guardrails should be embedded to prevent shocks to Australia's growing carbon farming and co-benefits industry, and avoid erosion of the value and integrity of Australia's rapidly expanding ACCU market; and
· considering these options without strengthening the mechanism itself (i.e. through declining Safeguard baselines over time), limits the Safeguard's transformative potential.
The Grattan Institute's report, Towards net zero: Practical policies to reduce industrial emissions, also includes similar priorities to the CMI regarding the evolution of the Safeguard Mechanism.
The CMI will engage with our members to develop a consultation response that maintains the integrity of Australia's carbon market and delivers real impact on emissions reductions.
The Carbon Market Institute is the independent industry association for business leading the transition to net zero emissions. Its over 100 members include primary producers, carbon project developers, Indigenous corporations, legal and advisory services, insurers, banks and emission intensive industries developing decarbonisation and offset strategies.
