Direct Action set up to allow large rise in emissions, says Climate Institute

The final element of the Abbott government’s Direct Action climate change policy will at best mean major polluters continue business as usual and at worst lead to significant increases in their greenhouse gas emissions according to the Climate Institute thinktank.

The framework for the final part of Direct Action scheme – the so-called “safeguards mechanism” – confirms it will allow big polluters to buy carbon credits if they exceed new baselines for their greenhouse emissions, but also that it will set those baselines at levels that ensure few companies will have to.

An issues paper on the “safeguards” released Thursday confirmed the policy could become a “baseline and credit” emissions trading scheme, but said at the outset that emissions baselines would “reflect the highest level of reported emissions for a facility over the historical period 2009-10 to 2013-14”.

Baselines for new projects would be set “at a level to encourage facilities to achieve and maintain best practice”.

“This places no real responsibility on the largest emitters in Australia to reduce their emissions,” said the Climate Institute’s Erwin Jackson.

“In theory it could set real limits on emissions and in theory it could become a baseline and credit scheme, but there is no indication from the government they would be prepared to do that.”

The safeguard mechanism is supposed to ensure that polluting industries not increase their emissions and undo the emission reductions purchased through the $2.55bn emissions reduction fund.

It will apply to around 140 facilities with emissions of more than 100,000 tonnes of CO2 – electricity generators, mines, manufacturers – and will be administered by the clean energy regulator set up by the previous government.

The government has given stakeholders a month to respond to the issues paper.

According to the paper, the government is also considering allowing some mines to have baselines higher than their historical average if “historical high point does not fully reflect expected business-as-usual emissions.”

“These are operations where there is a natural resource or reserve associated with the operation of a facility; the grade or depth of the resource or reserve will have a direct effect on the emissions performance of a facility; the facility has limited ability to control for such emissions; and facility emissions are expected to exceed their historical baseline and the change in natural resource grade or depth is the primary reason for this.”