The Albanese government is finally on the verge of operating a price-based mechanism for reducing carbon emissions after former chief scientistof penalties and rewards for abatement.
The safeguard mechanism sets big-emitting industries – of which Australia has many – an emissions baseline above which individual firms or plants are required to buy ACCUs, including from firms or plants that generate the credits by emitting below their baselines. The credits can come from planting or saving trees, revitalising land, or capturing industrial carbon. But itsthat up to 80 per cent of credits effectively are a sham – a quick way out for emitters and a rort for landowners that has done little to actually reduce emissions.
While commendably grasping the political hazard of carbon pricing, Labor needs to adopt more market-based solutions, both in the energy transition and across the economy., which involved a comparable transformation of an over-regulated and protected economy. But Labor’s policy agenda leans toward reregulation, such as in energy and industrial relations, and away from incentive-based supply-side reform, such as to the tax system.
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