The Safeguard Mechanism is Australia’s main policy for controlling the greenhouse gas emissions of large companies. It is currently under review.

Under the Mechanism, large polluters are supposed to reduce their emissions in line with Australia’s emissions reduction targets. Climate and environment groups, however, see the Mechanism as having too many flaws, particularly the ability for companies to ‘offset’ their emissions by buying carbon credits.

The Australia Institute has produced a report ‘Safeguarding the Fossil Fuel Industry‘, outlining these problems in more detail.

Photo: Protest against Labor’s relationship with fossil fuel companies, September 2025. Woodside and Santos are amongst the companies covered by the Safeguard Mechanism.

Several Climate Action Merri-bek members made submissions to the review, including Val Kay, CAM vice-convenor. whose submission is shown below. Public submissions should be available on the review site soon.

Submission to the review of the Safeguard Mechanism by Valerie Kay

Thank you for the opportunity to make a submission. I am submitting as an individual who has conducted research and worked in the university sector and is now working voluntarily in the community. I have a PhD in sustainability, equity and health and coordinated the Climate Change and Public Health unit in the Masters of Public Health at Monash University for eight years prior to retirement in 2023. I am now active in voluntary work on climate change education and advocacy in my local community.

Background of this submission

The United Nations Environment Programme has recently confirmed that we are expected to exceed 1.5C this decade, and called for deep emission cuts. In this context, Australia as a wealthy country needs to greatly strengthen the pace of its emission reductions. In particular we need a clear path to phase out fossil fuels as we have committed to under the Belém Declaration.

The very modest apparent gross reductions in 5-yearly rates of emissions reported in the Safeguard Mechanism Review consultation paper are not sufficient in this context.

Further to this, Australia has a misguided overall approach to measuring emissions reductions, which applies to both the Safeguard Mechanism and to our overall Greenhouse Gas reporting. We focus on so-called net results, deducting apparent reductions from carbon removal (predominantly nature-based approaches) from actual overall emissions. In this submission, I argue that we should clearly separate actual emissions of greenhouse gases from apparent carbon removal, both from nature-based solutions (such as reforestation, soil improvement, wetland restoration and so forth) and technological methods of carbon removal (which appear to contribute an extremely small amount of carbon removal in practice). These three strands should be clearly separated and results measured and published by an independent authority.

Within this context, my submission addresses the use of ACCUs [Australian Carbon Credit Units] in particular. I argue that:

• Organisations covered by the Mechanism should not be able to use offsets
• Organisations should be required to report on their gross emissions and this should be the headline reported measure
• There should be clear targets for gross emissions reduction (I have argued elsewhere that Australia needs a clear plan with timelines and targets for phasing out fossil fuels and this requirement fits with that approach)
• Organisations that fail to meet their targets should face consequences, preferably in the form of publicity and financial consequences (eg fines or levies, with further legal consequences as required)

Further to this, it is appropriate that those people and organisations who are investing time and effort in nature-based solutions should receive recompense for their efforts. This should not, however, involve a direct relationship with organisations that are seeking to offset their emissions. Research (as summarised for example by the Australia Institute) shows that this kind of relationship results in deeply flawed results. I argue that it is effectively impossible to prevent this. To draw on an example from my own research field of public health, research that is funded by organisations with a commercial interest in the outcomes will almost inevitably result in biased results (I am writing submission under time pressure but am happy to provide further evidence on this).

We don’t even need to blame capitalism for this (although we should not discount its impact) – it is almost a function of human nature that when we pay for something, we expect to get the results we want.

Moreover, as the Australia Institute and many scientists have pointed out, we are fundamentally playing catch-up in trying to use offsets: global warming is already happening, and even while we are (for example) planting more trees, other trees are dying, due to changing climate, prolonged periods of drought, more intense floods, increased fires and increased rates of disease.

Nature-based methods of carbon removal are extremely important and fit with our concurrent commitments to protect environments, biodiversity and threatened species. But these commitments need to be seen as separate goals in their own right. We can estimate the net result of total emissions minus carbon removal from nature based solutions, and these results could be published, but the headline measure should be, for both the Safeguard Mechanism and Australia’s Greenhouse Gas Reporting, how much have we reduced actual emissions?

Returning to the point that people and organisations who invest in nature based solutions should receive recompense, this could be achieved by setting up a separate, independent body to monitor, measure and pay for carbon credits for their work. This body could be (at least in part) funded from the fines or levies imposed on organisations that are not meeting their gross emissions reduction targets under the Safeguard Mechanism. This would ensure recompense, while removing the direct influence of the emitting organisations. Hopefully this could both ensure the integrity of carbon credits and provide support for nature based solutions.

I will not comment in depth on international carbon credits or technological methods of carbon removal. Regarding international credits, there seems to be strong evidence that they are even more flawed than ACCUs and we should not use them. Regarding technological methods of carbon removal, it appears increasingly clear that they can only contribute a minor amount, at very significant expense. They should not be a major component of our approach.

Submitted 18th September 2026. Please note that this submission reflects the views of the author and may not represent the views of Climate Action Merri-bek.