Triggering the safeguard or safeguarding the trigger: Climate, large emitters and the EPBC Act

By Peter Burnett

Last week’s debate in the Australian Parliament on the new government’s Climate Change Bill generated a surprising level of debate on a side issue, the possible inclusion of a ‘climate trigger’ in Australia’s most significant environmental law, the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act).

So much so that I made it the subject of my last blog, in which I argued that we mostly didn’t need a climate trigger, because it would double up on the ‘safeguard mechanism’ that sets individual baselines for major carbon-emitting facilities like steelworks, and then reduces that baseline over time.

The exception was for actions that would generate significant carbon emissions but weren’t ‘major facilities’, which mostly means major land-clearing.

I’ve changed my mind. In light of last week’s debate, I now think we should have both a climate trigger and a safeguard mechanism, on the proviso that they must dovetail with each other.

Let me explain. As the government is committed to the safeguard mechanism but somewhat skeptical about a climate trigger, I’ll start with the former.

Safeguard mechanism

We don’t yet have the full detail of what the government is proposing — it has promised to release a discussion paper towards the end of August. We do know, however, from statements by climate minister Chris Bowen and from Labour’s election policy, that the gist of the proposal is to keep the existing legal machinery while reducing facility emissions baselines progressively to net zero by 2050.

The safeguard mechanism will apply to the 215 existing major emitters, together with any new facilities emitting more than 100,000 tonnes CO2-e per annum.

Climate trigger

A climate trigger in the EPBC Act would prohibit developments likely to emit more than a certain volume of greenhouse gases per annum (lets say 100,000 tonnes), without first undertaking an environmental impact assessment (EIA) and obtaining a development approval from the environment minister. Such an approval might simply require the developer to use the best available emissions technology at the time of construction, with no follow-on requirements.

Alternatively, much like the safeguard mechanism, it could require reducing emissions from an initial baseline. It might even allow emissions credits to the traded with other such facilities, although this could be complicated in practice.

Dovetailing a safeguard with a trigger

If used together, these two mechanisms would be seeking to occupy much the same regulatory space. That’s why I argued that a climate trigger should be limited to actions that are not caught by the safeguard mechanism, such as land clearing.

However, there are some benefits that are better delivered by one or other of the two mechanisms.

For example, it seems that many projects underestimate their likely emissions by a significant amount. The rigour of the EIA process, including the opportunity for public scrutiny, will help ensure early and accurate estimates of emissions, before the final investment decision is made.

Another benefit of a climate trigger is that the environment minister would have the option of saying ‘no’ to a proposal for a high-emitting facility. Sometimes outright rejection is the right answer, even where the government has no objection to the activity itself, as with Tanya Plibersek’s proposed rejection of Clive Palmer’s latest Queensland coal mine shows.

On the other hand, the safeguard mechanism is designed to facilitate emissions trading, which is something not readily available under the more traditional regulatory mechanism of an EPBC approval.

This leads me to suggest that we can have the best of both, provided we ensure that the two mechanisms dovetail with each other and so avoid duplication.

It could work like this.

First, there would be a whole-of-government policy specifying that major emitters would be subject to a facility-specific emissions cap, set by reference to the lowest feasible emissions from existing technology. This cap would then decline to net zero by 2050.

Second, under the climate trigger, the environment minister would limit herself to assessing the likely emissions under best low-emission technology and setting that level as the initial cap. She would do so knowing that her approval of the project would, in turn, trigger the safeguard mechanism.

In the end, we would have the benefit of both mechanisms but no duplication — just a hand-off from one regulator to the other.

Objections anyone?

Some might object to this ‘dovetail’ approach on the basis that Professor Graeme Samuel recommended against a climate trigger in his review of the EPBC Act in 2020.

This objection lacks substance, for two reasons. First the review did not extend to policy matters such as a climate trigger, but was confined to the operation of the existing Act.

Second, while Professor Samuel did note that previous governments had chosen not to use a climate trigger, an outcome he said he agreed with, he left it at that, without making any arguments of substance against a climate trigger.

‘Both/and’, not ‘either/or’

This debate has quite some way to run —the government will not be responding to the Samuel review until late in 2022 and will not bring forward legislation to amend or replace the EPBC Act until 2023.

However, it is clear already that there will be a major episode of brinkmanship played out between the government and the Australian Greens over the climate trigger. The Greens are determined to push for ‘no new fossil fuel projects’ while the government are equally determined not to ban these projects unilaterally, on the ground that if we act alone, other countries will take up the slack as a suppliers of fossil fuels.

I hope my ‘both/and’ approach will prove useful as that debate plays out.

If we stick with the ‘either/or’ approach currently on the table, then we can expect high-stakes brinkmanship in the Senate next year, as the unstoppable force of the Greens’ passion for avoiding climate disaster collides with the immovable object of a government that knows that its future depends on occupying the centre lane on the political highway.

Banner image: Some want a ‘carbon trigger’ to stop the development of big emitting facilities. Others reckon a ‘safeguard mechanism’ is enough to constrain emissions. Maybe we can dovetail them and get the best of both. (Image by catazul from Pixabay)

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