With the government set to review the scheme this year, the research shows the Safeguard Mechanism’s biggest  failure is its overwhelming reliance on carbon offsets which, in some cases, have enabled big polluters, including fossil fuel producers, to increase their actual pollution.

The report exposes the extraordinary lack of integrity in offsets as well as the accounting tricks which have enabled the government to keep approving new fossil fuel projects while falsely claiming its policies are reducing real emissions.

Key points:

• The Safeguard Mechanism has failed to deliver promised reductions in gross emissions.
• The scheme has enabled polluters to claim “net reductions” in emissions while actual pollution levels are rising.
• Proposals to open the Safeguard Mechanism to international offsets would further reduce the scheme’s integrity.
• By enabling coal and gas expansion, the policy could put Australia in breach of international law.
• Allowing big polluters to use unlimited offsets makes Australia an outlier in international climate policy, alongside countries like Kazakhstan.

“While millions of Australian homes and businesses are doing the right thing, installing solar panels and batteries, and buying EVs, many of our biggest polluters are using dodgy offsets to pollute more than ever,” said Dr Richard Denniss, co-CEO of The Australia Institute.

“The Safeguard Mechanism’s main function was supposed to be to make our biggest polluters pollute less. That is simply not happening.

“The scheme is undermining the overall goal of reducing real emissions because it allows polluters to rely on an unlimited amount of carbon offsets. Under the Safeguard Mechanism there is simply no obligation for big polluters to reduce the actual levels of pollution.

“The government has an opportunity to fix this mess and get back to basics when it reviews the scheme during the next financial year.

“If the Albanese Government is serous about the science of climate change then it need to reform its main climate policy to require big polluters to reduce their actual greenhouse gas emissions. The science is simple. If actual greenhouse gas emissions are still rising, then we clearly aren’t ‘decarbonising’ the economy.”