The Australian Energy Regulator conducted a public consultation on its Safeguards policy for large greenhouse gas emitters. https://consult.industry.gov.au/safeguard-mechanism-reform-consultation-paper.
The submissions have many good suggestions, but most suggest changes to the SafeGuards policy rather than replacing it with something better. The following is an alternative where the Community finances clean ways of producing the same services with Community Capital. Communities supply the Capital, but the Capital returns to the Community after it has done its job. During the transition there will be clean-up costs incrementally imposed on organisations to fund the removal of emissions created by the organisations. The costs will be set by the government and the money provided directly to organisations that remove and monitor pollutants. Many of the suggestions in the submissions can inform those rules and regulations.
The Guardian’s article — “The Most Important Climate Policy you’ve never heard of” reports “In the five years after it began in 2016, emissions by the 215 biggest climate polluters subject to the mechanism went up by nine million tonnes or about 7 per cent.” The policy referred to is the SafeGuards policy, where big emitters have a negotiated schedule for reducing emissions. If they decline faster, they receive a reward; if slower, a penalty. While the idea sounds workable, it is complicated, and there are many opportunities for organisations to bypass and game the rules.
The policy provides no solution to the pollution created by products like gas and oil. The best way to stop those emissions is to leave the carbon in the ground. Businesses will not close down Coal and Gas unless forced to do so or they get compensation.
This article provides an alternative to the SafeGuards policy for all industries, even the Coal and Gas extraction industries. Instead of rewards and punishment, the government funds alternative non-polluting assets to reduce emissions. The funding is with Community Funding (Capital), where the assets revert to the Community after the compensation is complete. The approach will cost much less than Saveguards, increase the wealth of the community and continue the profits for the current polluters if they change the way they produce goods.
Equity or Community Funding?
We can fund the decarbonisation of Australia with Equity or Community Funding. Equity funding is where wealthy corporations and individuals borrow money secured against their worldwide assets. They invest the money, charge consumers for services, and accumulate profits.
The second is Community funding, where the Community borrows money from banks and other members of a Community secured against infrastructure that the whole community owns. Governments represent the Community and can act on its behalf.
With Equity funding, the Capital gives ownership, and all profits go to the owners. With Community funding, the Community takes collective responsibility for the assets, and the funders share the profits with consumers. One form of Community Funding is to pay for goods and services before receiving them. The prepayments are Capital used to acquire assets to create the goods and services. Community consumers share the profits by receiving part ownership of the assets that made the profits. Examples are funding the change from Petrol to Electric Vehicles, Affordable Housing for All and Community Ownership of Community Batteries.
Discussion
The SafeGuards Policy may reduce the emissions from Coal and Gas production. Unfortunately, it will not reduce emissions from burning fossil fuels and will do little to discourage other polluting behaviour whilever there are profits to come from polluting.
Compensating businesses with Community Capital that builds alternative renewable energy will stop the burning of fossil fuels. Investors and owners of fossil fuel businesses will obtain new assets that will give them a return on investment, and the investment will revert to the Community that paid the compensation. Full Community ownership will come after the compensation has been paid in full.
The Compensation Funds can be in the form of the government issuing zero-interest loans as Community Capital. The amount of Compensation could be on the reported profits and the tax paid at this time.
Community Capital can fund alternatives to the mining of fossil fuels, and it can address pollution from all the major and small emitters. The approach is measurable and adjustable.
