Climateworks Centre welcomes the opportunity to provide a submission to the Department of Climate Change, Energy, the Environment and Water (DCCEEW) in response to the consultation paper informing the review of the Safeguard Mechanism.
Climateworks bridges the gap between research and climate action, operating as an independent not-for-profit within Monash University. We are climate transition specialists, working with decision-makers who have the power to reduce emissions at scale. Climateworks accelerates ambitious, evidence-based action for net zero in Australia and Southeast Asia.
Climateworks recommends that the Australian Government:
- Align the Safeguard Mechanism with established government policy and Australia’s international commitments by setting an aggregate baseline trajectory aligned with the upper end of Australia’s 2035 target.
- Bolster the competitiveness of Australian industry and more effectively reduce emissions by differentiating baseline decline rates between manufacturing and fossil fuel extraction and processing facilities.
- Introduce a Reinvestment Contribution linked to the use of Australian Carbon Credit Units (ACCUs), to better incentivise on-site abatement and fund biodiversity restoration.
- Coordinate the Safeguard Mechanism with Future Made in Australia, industrial finance schemes and place-based initiatives to support facility-level decarbonisation and create new economic opportunities.
- Introduce a phased cap limiting ACCU use to 10 per cent of pre-decline baselines to better incentivise on-site emissions reductions, and redesign the Cost Containment Measure so that it does not undermine investment incentives.
- Introduce a Carbon Border Adjustment Mechanism (or Border Carbon Adjustment) alongside the Safeguard Mechanism to address carbon leakage, support industrial competitiveness and enable stronger domestic emissions reductions.
More detail can be found in our submission [PDF 0.3 mb]