Australia skirts tougher rules on emitters in safeguards paper

Published 08:05 on March 26, 2015  /  Last updated at 11:18 on May 12, 2016  /  Asia Pacific, Australia  /  Comments Off on Australia skirts tougher rules on emitters in safeguards paper

Australia on Thursday released a consultation paper on its emissions safeguards mechanism that suggested no means to tighten company emission benchmark levels which critics say are too soft to stop CO2 output from rising.

Australia on Thursday released a consultation paper on its emissions safeguards mechanism that suggested no means to tighten company emission benchmark levels which critics say are too soft to stop CO2 output from rising.

The safeguard mechanism, slated to enter into force on July 1, 2016, is meant to ensure that carbon cuts achieved through Australia’s A$2.55 billion ($2 bln) Emissions Reduction Fund aren’t offset by emissions growth elsewhere in the economy.

The safeguards will set emission baselines for 140 facilities that emit more than 100,000 tonnes of CO2e per year, covering around half of Australia’s annual greenhouse gas output.

The consultation paper said facilities would be given a future emissions baseline equal to the highest level of emissions they have recorded during the past five years.

It also proposed that mining firms and oil and gas extractors that expect their emissions to increase can use “independent assessments” to revise their benchmarks upwards.

“Given that emissions today are significantly lower than historical high levels, this will allow companies to increase their emissions from today’s levels, leading to considerable emissions growth through to 2020,” Hugh Grossman at market analysts Reputex said in a statement.

“Emissions growth from today’s levels will mean that abatement purchased by the Emissions Reduction Fund is likely to be displaced, eroding investment to purchase emissions reductions,” he said.

Reputex predicted that the ERF will achieve cuts of around 60-120 million tonnes of CO2e to 2020, around half of what is needed to meet the country’s target of reducing GHGs to 5% below 2000 levels by the end of the decade.

INEFFICIENT

“The accommodations for oil, mining and gas do seem targeted towards expected increased emissions from these sectors. However economic projections seem to counter this argument. Recent reports also indicate that the sector with the most rapid increases in emissions recently has been transport,” said Chris Wilson with Pangolin Associates, a consulting and project auditing firm.

Wilson said several aspects of the rules outlined in the paper appeared inefficient, such as the enforcement options.

The consultation paper proposed that companies missing their targets might be handed a civil penalty, but only after a series of other measures had been taken to ensure they comply.

Companies that emit above their baseline in one year can buy Australian Carbon Credit Units (ACCUs) to compensate for the emissions growth, or apply to the government to compensate by averaging below their baseline over a multi-year period. The paper made no mention of international offsets.

“I would suggest that the enforcement options are fairly weak and easily avoidable, particularly given that they can buy their way out with offsets voluntarily,” Wilson said.

Another potentially weak proposal, according to Wilson, was that the electricity generation sector, which accounts for 57% of the emissions covered by the safeguards, could be given a sectoral baseline, and that individual baselines would only kick in if the entire sector misses the target.

As a consequence, individual facilities that emit more than they’re allowed to would not be forced to make good for the excess carbon as long as the sector as a whole stayed within its limit.

The government will accept comments on the paper until Apr. 27.

Updated with comments and details.

By Stian Reklev – stian@carbon-pulse.com