Election 2022: Opposition vows to cut emissions faster

Callide power stations B and C in Queensland.

Both major parties have committed to cutting Australia’s greenhouse gas emissions but Labor has promised to act more quickly and will demand more urgent action by Australia’s major companies. The costs to consumers of acting more quickly have not been explained but Labor says its climate plans will create 604,000 jobs and spur $76bn of investment.

Labor’s plan is to cut emissions by 43 per cent from 2005 levels by 2030 and achieve net zero by 2050. The Coalition has pledged to cut emissions by 26 to 28 per cent by 2030 and also achieve net zero by 2050.

The Morrison government said it would beat its 2030 target on current projections, estimating cuts of between 30 and 35 per cent. A key difference between Labor and the Coalition is how it will manage the safeguard mechanism that forms part of the Abbott-era Emissions Reduction Fund.

The safeguard mechanism applies to facilities that emit more than 100,000 tonnes of CO2e a year across a range of sectors, including mining, oil and gas extraction, manufacturing, transport, and waste but does not include electricity generation.

Under the Coalition, the safeguard mechanism is designed to stop industry from increasing its carbon emissions beyond business as usual.

Labor has said it will change the way the safeguard mechanism works. Under the plan, the amount of greenhouse gas emissions allowed from Australia’s biggest operations will be reduced each year to meet the ALP’s 2050 net zero target.

Companies will be told how much they are allowed to emit and will have to buy carbon permits to cover any excess. Companies that emit less than they are allowed will be able to sell their excess allowance to others. This is a cap and trade carbon trading scheme.

There will be protections for companies that face competition from other countries that do not have penalties on carbon dioxide emissions in their industry, but Labor says how this will operate won’t be determined until after the election and will be decided by the Clean Energy Regulator.

Given the total amount of permits will be reduced each year, any allowance given to one industry will reduce the permits allowed for others and could increase their costs of doing business. Labor and the Coalition hope improvements in technology will make reducing greenhouse gas emissions cheaper over time.

The Coalition says it is on track to reach net zero emissions by 2050 with a plan that will focus on technologies, not taxes.

Labor has criticised the government for not doing enough while Angus Taylor has said “a substantial tightening of the safeguard mechanism was a backdoor carbon tax consumers will ultimately have to pay for”.

According to the Coalition climate policy, Australia can get within a range of net zero by 2050 with a voluntary incentive of less than $25 a tonne CO2e in 2050. Without new technologies, it says net zero by 2050 is achievable for Australia only at much higher marginal costs, about $100 to $170 a tonne, and with heavy reliance on carbon offsets from Australia’s productive agricultural land or from overseas.

ALP modelling shows under current policy, covered emissions under the safeguard mechanism are projected to grow to 151Mt by 2030 to be 27 per cent above 2005 levels equal to 34 per cent of national emissions. Labor says its changes to the safeguard mechanism are projected to deliver 213Mt of GHG emissions reductions by 2030.