Greens’ red line sparks climate war

Anthony Albanese’s signature climate policy is on the brink of collapse as the Greens prepare to kill Labor’s safeguard mechanism.

Adam Bandt says the Greens will support Labor’s tougher safeguard mechanism – forcing Australia’s 215 biggest-polluting facilities to slash emissions by ­almost 5 per cent each year out to 2030 – if the government ‘stops opening new coal and gas mines’.. Picture: Gary Ramage

Anthony Albanese’s signature ­climate policy – underpinning his election promise to achieve 43 per cent emissions reductions by 2030 – is on the brink of collapse as the Greens prepare to kill Labor’s safeguard mechanism.

Greens leader Adam Bandt has issued a “red line” demand for the government to ban new coal and gas projects, fuelling concerns among senior government and ­industry figures that he will repeat Bob Brown’s scuttling of Kevin Rudd’s carbon pollution reduction scheme in 2009.

Mr Bandt, who is refusing to back a raft of key legislation ­including the government’s ­marquee climate, manufacturing and housing policies, said the Greens would blow up the ­safeguard mechanism unless the Prime Minister stopped fossil-fuel projects.

The Albanese government, which is under pressure from the Australian Competition & Consumer Commission, industry and unions to unlock new gas fields or face an energy crunch by 2027, is not expected to yield to the Greens’ demands.

Mr Bandt said the Greens would support Labor’s tougher safeguard mechanism – forcing Australia’s 215 biggest-polluting facilities to slash emissions by ­almost 5 per cent each year out to 2030 – if the government “stops opening new coal and gas mines”.

 

Splits inside the Greens party room, which met on Tuesday, are understood to have heaped pressure on Mr Bandt to adopt a hardline position on the safeguard mechanism after last year backing Labor’s 43 per cent emissions-­reduction target.

The Greens’ 2030 election pledge to reduce emissions by 75 per cent was almost double Labor’s commitment.

As Labor races to win Greens and crossbench support for the safeguard mechanism, the $15bn National Reconstruction Fund and the $10bn Housing Australia Future Fund, which are slated to start from July 1, Mr Bandt said the emissions-reduction scheme would “make the climate crisis worse”.

“You can’t put the fire out while pouring petrol on it. The first step to fixing a problem is to stop making the problem worse. Coal and gas are driving the climate crisis, but Labor wants more,” Mr Bandt said.

“The Greens have huge concerns with other parts of the scheme, such as the rampant use of offsets and the low emissions-reduction targets, but we’re prepared to put those concerns aside and give Labor’s scheme a chance if Labor agrees to stop opening new coal and gas projects.

“Labor needs the Greens to get this through parliament. If Labor’s scheme falls over, it will be because Labor wants to open new coal and gas mines. Labor has to decide how much it wants new coal and gas mines.”

The Australian understands options to placate the Greens, whose 11 upper-house votes are needed by Labor if the Coalition is opposed, include a climate trigger and blocking coal and gas companies from accessing a $600m safeguard mechanism transition fund. The climate trigger, which senior government figures oppose as it would likely have unintended consequences across other critical sectors, could be included under Labor’s overhaul of the Environment Protection and Biodiversity Conservation Act.

Climate Change Minister Chris Bowen is expected to use ministerial regulation powers in April to set rules for the new ­safeguard mechanism scheme. However, separate legislation creating new carbon trading credits for heavy industry must pass through the Senate before the scheme commences on July 1.

Senior Greens sources, who indicated the party would attempt to strengthen the “integrity” of Labor’s proposed carbon credits via legislation in the parliament, have left open the possibility of colluding with the Coalition to introduce a disallowance motion in the Senate. The disallowance motion, which must be lodged within 15 sitting days of Mr Bowen using his regulation powers, would overturn Labor’s safeguard mechanism.

Labor’s 2030 target, as laid-out in its Powering Australia election manifesto, relies heavily on accelerating emissions reduction across the nation’s 215 biggest-emitting facilities, which are responsible for 28 per cent of pollution.

Erwin Jackson, policy director of the Investor Group on Climate Change, whose members manage more than $30 trillion in assets under management, said failure to reach political consensus on the safeguard mechanism would stall investment in Australia and send the debate back decades. “Reforming the safeguard mechanism is the most important climate change legislation of the year,” Mr Jackson said. “Decades of delay have forced new clean energy industries offshore and we need to take this basic forward step to achieving the long term goal which is an orderly and just transition to net zero.”

Greens senator Sarah ­Hanson-Young and key crossbench senator David Pocock will appear at a climate integrity summit in Canberra on Wednesday, where they will discuss the integrity of Australia’s climate targets and whether the nation is set for a “greenwash”.

After the Coalition rejected Labor’s safeguard mechanism, the government needs the support of the Greens and two crossbench senators in the upper house to pass legislation.

While negotiations between the government and the Greens on the NRF and housing future fund remain tense, the left-wing party is likely to broker deals with Industry Minister Ed Husic and Housing Minister Julie Collins ahead of votes in the Senate next month. The NRF is expected to pass through the lower house this week and return to the Senate on March 6.

Following demands by the Greens to prohibit NRF investment in manufacturing linked to fossil fuels, Mr Bandt softened his position on Tuesday. The Greens on Monday night introduced an amendment to ensure the NRF – designed to boost modern ­manufacturing across renewables, medical science, defence, resources and agriculture – could not invest in activities “inconsistent” with greenhouse gas ­emissions-reductions targets.

Mr Bandt said the Greens’ amendment was “crystal clear”, but conceded he was willing to work with the government to make it clearer. “We are having discussions with the government and are happy to have good-faith discussions with them,” he said. “We think our amendment is crystal clear. If the government thinks that there’s additional changes that are required we’d be happy to hear that from the government.”

Mr Bandt said the Greens’ position was not about targeting genuine investment from Australian manufacturers, rather to ensure the fund did not become a “slush fund for coal and gas”.

Speaking to Labor MPs on Tuesday, Mr Albanese attacked Opposition Leader Peter Dutton for rejecting the NRF and accused him of “throwing rocks”. The Coalition has formally rejected the NRF, housing future fund and safeguard mechanism.

Mr Albanese said the Coalition strategy was “straight out of the Tony Abbott playbook” and reflected an opposition that “doesn’t know what it’s for, just what it’s against”. Ms Collins disputed Greens demands for a ­national freeze on rental increases, saying rent capping was controlled by the states.