As record-breaking heatwaves scorch the northern hemisphere and another El Niño summer is predicted here, new research from The Australia Institute (TAI) said Labor’s safeguard mechanism is failing.

Labor said in 2023 that its “Safeguard Mechanism” would reduce emissions. Critics warned then that its unlimited “offsets” would allow polluting corporations to buy relatively cheap and ineffective carbon credits, instead of decarbonising their operations.

The TAI has found that the Safeguard Mechanism is “failing to drive real emissions reductions across Australian industry” and that the reliance on offsets “benefits the fossil fuel companies that are the biggest emitters covered by the scheme”.

It produced the report in the lead-up to a federal government review of the safeguard mechanism.

Report co-author Fergus Green told Green Left that while emissions did fall over 2024-2025, it was largely due to accidental causes. “Actual emissions from all of the facilities that are covered by the scheme, fell 2.3% [in 2024-25] compared to the previous year”, the last year for which data is available.

He said the government’s Climate Change Authority had said “those emissions reductions came from things that had nothing to do with decarbonisation”. Instead, industrial accidents, temporary closures of facilities or, in some cases, permanent closures due to market conditions were the main causes.

“Once you control for those factors the Climate Change Authority says emissions across the covered facilities were steady”, Green said. In a........

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