The Greens face one of the biggest decisions of their political lives as Labor’s climate policy hangs in the balance

·6-min read
<span>Photograph: Mick Tsikas/AAP</span>
Photograph: Mick Tsikas/AAP

The future of one of Labor’s signature climate policies – updating the safeguard mechanism to deal with industrial greenhouse gas emissions – hangs in the balance. The government held off pushing it through parliament this week while negotiations continued with the Greens and key independent senator David Pocock over a potential deal to strengthen it.

The design of the policy is not the Greens’ responsibility, but what happens next is largely up to its party room – with the Coalition opposed, the government can’t get its legislation through without their support. The minor party is divided. Its 15 members will meet through the weekend ahead of a potential decision by Monday. It could go either way. Given the party operates on a consensus model that allows time to find common ground, it could also remain unresolved into next week.

Related: Labor and Greens could agree to compromise on non-fossil fuel industries in safeguard mechanism

If you’re new to the safeguard mechanism – it’s a Coalition policy that was promised to stop emissions from 215 big industrial polluting sites rising, but failed because it did not get applied. Labor says it wants most facilities to have to cut emissions intensity by 4.9% a year to cut total pollution under the scheme by about 30% by 2030.

Critics say the scheme is flawed because new fossil fuel mines will be allowed into the scheme, adding to emissions, and companies can buy an unlimited number of controversial carbon offsets as an alternative to making onsite emissions cuts.

The safeguard mechanism was introduced by the Coalition in 2016. It was promised to put a limit on greenhouse gas emissions from about 200 major industrial facilities.

It applies to facilities that emit more than 100,000 tonnes of carbon dioxide equivalent a year. Each facility is set an emissions limit, known as a baseline.

The Coalition said companies that emitted above their baseline would have to buy carbon offsets or pay a penalty. In practice, facilities were allowed to change their baselines, few were penalised and industrial emissions continued to increase.

Labor plans to revamp the scheme.

It would set new baselines based on emissions intensity – how much a facility releases per unit of production. Baselines will be reduced by 4.9% a year.

Companies could choose whether to make onsite emissions cuts or buy Australian carbon credit units.

New polluting facilities, including gas and coalmines, could open and would be set baselines at “international best practice”.

Companies that emit less pollution than their baseline allows would be awarded a new type of “safeguard credit”. These within-scheme credits could be sold to other polluting facilities that emit more than their baseline and need offsets.

Labor wants the changes to start on 1 July 2023.

The Greens want a ban on new coal and gas. The government isn’t going to do anything as broad as that, no matter how clearly the message from the world’s climate scientists has been laid out.

Some Greens, including leader Adam Bandt, want to get the best deal they can (we haven’t seen the details of what has been negotiated) to make life harder for new coal and gas developments, allow the changes to be introduced and keep fighting on fossil fuels. That fight would include a debate over an upcoming revamp of national environment laws and a campaign at the next federal election.

This group thinks the scheme is nothing like what is needed to address the climate crisis, but introducing a carbon price and annually declining emissions limits for major polluting facilities is better than the alternative – currently, nothing.

Others in the Greens would prefer to use their balance-of-power status to block the changes and to keep attacking the safeguard as a Tony Abbott creation that can’t be redeemed. There are different views along the spectrum between these two positions.

Related: The latest IPCC report makes it clear no new fossil fuel projects can be opened. That includes us, Australia | Adam Morton

The discussion within the party is running alongside a febrile disagreement between activists. Bob Brown, the ex-Greens leader and longtime movement spirit animal, this week returned his life membership of the Australian Conservation Foundation in protest, accusing it of being part of the “Labor-lobby”. The ACF had released a statement calling for the safeguard to be “strengthened and passed” with amendments to limit offset use and constrain coal and gas.

The ACF position is broadly in line with the Greens who want the scheme improved, but places greater emphasis on the need to pass it. The Climate Council has a similar stance. Brown disagrees – he says green groups should be arguing for the best environmental result, and that calling for a deal just gives Labor cover – but the disagreement is more complicated. Senior Greens figures have been unhappy with ACF for years, believing it sided with the ALP in past major fights including the carbon pollution reduction scheme in 2009.

Some in the movement have taken a more critical stance against the safeguard and those who suggest it should be passed. They include the ex-Greens leader Christine Milne and the Australia Institute. Both emphasise scientific evidence that offsets cannot be used to justify fossil fuel expansion. Milne is influential with some Greens senators.

The Greens MPs and senators have largely kept out of the public discussion beyond calling for an end to coal and gas, though the Tasmanian senator Nick McKim gave an indication of where he stands by lining up with Brown after his attack on ACF.

At the heart of the disagreement are different views about what will bring a more rapid economic transformation. Is it better to push hard, claim wins achieved through compromise and then push again, or to oppose, risk blowing it up and hope for a rethink?

Related: Safeguard mechanism: what is it, will it cut emissions and what role do carbon offsets play?

Those who would prefer the safeguard changes not be supported have not set out their alternative. They think it would put Labor in the spotlight and force it to come back with something more to the Greens’ liking to meet its UN-submitted 43% emissions target for 2030. Which is possible, but by no means guaranteed.

They point to the introduction of a carbon price scheme in 2011, two years after talks collapsed over the CPRS in 2009, as proof of how something better can arise after failure. But there is another part to that story – the carbon price system was abolished and the messiness of those years contributed to an implosion in progressive politics and nine years of Coalition government. There has been no climate policy of substance since.

It is also possible Labor would refuse to deal with the Greens any more and instead back a messy mix of funding and regulation until the election. Its position on fossil fuel developments would not change, but the politics could become brutal, and there would be a risk that voters who both parties need – the climate-sympathetic but largely disengaged – would be turned off by what is perceived as another collective failure.

These are some of the permutations the Greens are weighing as they make what some in the party have described as one of the biggest decisions of their political lives.