ANALYST UPDATE: Safeguard scheme to erode ERF abatement?

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Following a short delay, the government’s “safeguard mechanism” Discussion Paper is expected to be released over the next fortnight, with Australia’s updated Abatement Task and Emissions Projections also in the Department’s short-term pipeline (due prior to the end of March).

While the Coalition is expected to establish a ‘light touch’ safeguard scheme – minimising the exposure for the coal and gas industries – the final shape of the baseline mechanism is far from settled, with growing concern that the scheme will fail to live up to its name, and adequately “safeguard” ERF investment.

In this Analyst Update we explore the sensitivities in designing the safeguard mechanism, with analysis indicating that rules which fail to offset emissions from new or expanded facilities will fully erode abatement purchased by the ERF, and may bring the Senate’s veto power directly into play.

Please login to access our full Analyst Update, titled “Safeguard paper looms – Emissions growth to erode ERF abatement”, published under our Carbon Market Intelligence service.

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