David Pocock reveals biggest hesitation with Safeguard Mechanism

Labor’s contentious Safeguard Mechanism is facing a fight in the Senate, with kingmaker David Pocock concerned a loophole leaves open the possibility of worsening Australia’s climate reputation.

Senator Pocock said the mechanism, which Labor likely will need him to support to get the legislation through the Senate, was a “massive, complicated beast”.

The proposed scheme places regulations on the country’s 215 largest emitters, mandating a decrease in their emissions every year in order to achieve the government’s 2030 and 2050 targets.

Companies breaching the emissions limit would be forced to buy carbon credits to offset the amount or trade their emissions with other companies.

The Coalition has said it will not support the scheme, meaning Labor needs the Greens and two senators to pass the legislation.

Senator Pocock has yet to reach a final position, saying he has a number of concerns – primarily about the ramifications of a loophole which allows “unlimited offsets”. He says it opens the door “to our biggest emitters paying to pollute rather than becoming more efficient and decarbonising”.

“As it stands, we’re the only other jurisdiction in the world that allows full, open access to offset emissions (apart from) Kazakhstan,” he told ABC Radio.

“So, if it were to pass as it stands, it would be Australia and Kazakhstan that allow 100 per cent of emissions to be offset using carbon credits.

“ … For me, integrity has to be at the heart of this policy. We have to be certain this will drive the sorts of changes we desperately need.”

The Australian Conservation Foundation’s Gavan McFadzean said the work Labor had done to restore Australia’s international reputation on climate would be unravelled by the inclusion of unlimited offsets.

“For wealthy coal and gas companies, unlimited offsets are like cheap tickets to keep polluting business as usual,” he said.

“We urge the government to revise its design so the scheme can actually become an effective tool to cut emissions from Australia’s major polluters – we can’t offset our way to net zero.

“Offsets should only be used as an absolute last resort, should not be available for coal and gas companies, should only be accessed once a company can prove it is genuinely making efforts to reduce carbon, and should phase down as a share of the Safeguard Mechanism over time.”

The Safeguard Mechanism dominated the first session of the Environment legislation committee in senate estimates on Monday.

Specifically, Liberal Senator Hollie Hughes sought to explain why the Coalition isn’t supporting the Safeguard Mechanism, attempting to differentiate the former government’s “voluntary” scheme from Labor’s “mandatory” version.

Her claims were later proven false by a department official. More than 200 facilities had mandatory obligations under the previous scheme, but there was no enforcement on limiting emissions like there is in Labor’s scheme.

Despite Senator Hughes’ requests for modelling on ramifications the mechanism would have on the average household’s power bills, no such detail could be provided.

She was told Treasury was responsible for such modelling.

Estimates also heard the mechanism wouldn’t stop new coal and gas from opening, but would be a regulatory body which would hold potential new businesses to the same standard.

It comes as the Greens reveal they want Labor to return the almost $900,000 donated from fossil fuel companies during the election campaign, as they seek to remind the government they hold the balance of power in the Senate in passing the legislation.

Greens leader Adam Bandt says his party is involved in ongoing discussions with the government about the mechanism, but wants the loophole allowing new coal and gas mines to open – to be closed.