Why the safeguard mechanism may fail to safeguard our climate.
7 March 2023
On the long weekend, I took the time to read Nick Feik’s long essay in The Monthly on the safeguard mechanism: The great stock ’n’ coal swindle.
It is a stunning read and I recommend reading it all but here are some takeaways:
- Only 2.5% of carbon credits are actual trees being planted. The vast majority of credits created are things like “avoided deforestation” which could be called perversions (or cheats) of officially approved methods.
- An implication of the safeguard mechanism allowing 100% offsets is that Woodside would be able to offset ALL of its scope 1 emissions for its first year for roughly $5 million. In a year Woodside made a $9.65 billion profit it would take them 5 hours for them to generate money for these offsets!
- If the 215 largest polluters covered by the mechanism wish to achieve such “abatement” entirely by buying offsets, at current prices and averaged over the years to 2030, this would cost approximately $900 million per year – between all 215 of them. Remember, fossil-fuel corporations operating in Australia (a subset of the 215 major emitters) made $120 to $140 billion gross profit last year on exports of Australian LNG and coal.
- Climate Analytics recently reported that for every carbon credit unit generated to offset 1 tonne of CO2 equivalent emissions from LNG production in Australia, around 8.4 tonnes are going into the atmosphere, once the gas is exported and burned overseas. This is because gas exporters only need to account for 10% of the emissions they create.
- It is perhaps unsurprising then that 96% of oil and gas companies have plans for expansion, and these plans include a doubling of exports of liquefied gas around the world. A safeguard mechanism seems unlikely to trouble them.
Have a read here: