Submission in Response to the Emissions Reduction Fund Safeguard Mechanism Consultation Paper

Australia’s policy response to the risks associated with climate change should be workable, achieved at lowest possible cost, economically responsible and not lead to Australian industries being uncompetitive, particularly if competitor nations do not take equivalent actions.

It should also provide the foundations for a long-term policy framework that is responsive to international negotiations.

This submission considers elements of the government’s planned approach to the rules in relation to the safeguard mechanism and recommends further changes to:

•    Ensure those covered by the safeguard mechanism are not penalised for greenhouse gas emissions growth in other sectors of the economy.

•    Expand the legislated exceptional circumstances to include the impact of policy and regulatory changes on levels of greenhouse gas emissions.

•    Provide flexibility in the setting and review of baselines to address impacts of productivity improvements, consolidation, aging infrastructure, new facilities, variability in natural resources.

•    Provide flexibility in how baselines are calculated including for investments underway.

•    Provide for ongoing reviews of baselines.

•    Review the five year limit for the estimation of historical baselines.

•    Undertake further consultation on the proposed sectoral approach to electricity generation.

•    Include access to international permits as a design feature.

•    Consult on the draft rules as they are progressed.