"The great global land grab. AKA carbon markets." That's how a group of former Pacific presidents and prime ministers, the Pacific Elders' Voice, described carbon offsetting back in 2023. It's a good description to keep in mind as Australia reviews our flagship climate policy, reassuringly called the Safeguard Mechanism, which allows our 200-plus biggest industrial polluters to offset as much of their pollution as they like.
Tue 8 Sep 2026 01.00 AEST
Photo: AAP Image/Dean Lewins
Port Phillip Council has unanimously passed a motion calling for the Federal Government to fund a National Climate Compensation Fund with a levy on gas and coal production. The inner-Melbourne local government area, which covers suburbs such as St Kilda, Elwood, South Melbourne and Port Melbourne, faces increased risk of flooding and coastal damage in the face of climate change.
The New South Wales Independent Planning Commission last week approved the largest coal mining project in the state’s history. The way it proposes to deal with the immense climate-harming emissions from burning the exported coal beggars belief.
The great global land grab. AKA carbon markets.
That’s how a group of former Pacific presidents and prime ministers, the Pacific Elders’ Voice, described carbon offsetting back in 2023. It’s a good description to keep in mind as Australia reviews our flagship climate policy, reassuringly called the Safeguard Mechanism, which allows our 200-plus biggest industrial polluters to offset as much of their pollution as they like.
Pacific nations have been telling Australia this for years. Back in 2022, a joint letter from Pacific and Australian civil society groups welcomed Australia’s new 43 per cent target and told the newly elected Albanese government it still fell well short of Paris commitments to keep warming within 1.5 degrees, and that clever accounting and offsets were not the way to close that gap. Emission cuts, they said, need to happen at the source, not through dodgy offsets from avoided deforestation or speculative carbon removal schemes.
Dr Rufino Varea, regional director of the Pacific Islands Climate Action Network, made the same point last year, when Pacific governments were being courted on “blue carbon” marine offset schemes. These schemes, he said, let major polluters delay phasing out fossil fuels while dodging their obligation to provide real, grant-based climate finance.
The Pacific Network on Globalisation has separately warned that pushing market mechanisms into customary tenure systems risks worsening land conflicts communities are still managing.
And it isn’t only civil society groups making this case. Vanuatu’s Minister for Climate Change, Ralph Regenvanu, put it to Australians directly at the Australia Institute’s Pacific Regional Climate Diplomacy Forum in 2023. He didn’t mince his words, stating:
‘We need to stop taking oil and gas and coal out of the ground.” There is no version of reduced emissions, he argued, while extraction continues.
And on the offset schemes Australia keeps trying to expand, he was just as direct, describing carbon markets as a way of trying to “delay the action that we all know has to happen as soon as possible.”
This science-based call to climate action is global. In April of this year, 57 countries met in Santa Marta, Colombia, for the first Conference on Transitioning Away from Fossil Fuels (TAFF) process born out of the Belém Declaration commitments. One of the clearest outcomes to come out of that summit was a rejection of exactly the kind of offset centred policy Australia is reviewing right now.
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The declaration that shaped the TAFF conference was explicit under the heading “No false solutions“: carbon offsets, carbon capture and storage, ammonia co-firing and gas as a transition fuel were all named as ways of prolonging fossil fuel dependence, and of diverting public money away from the decentralised, community-based renewable systems that actually cut emissions and deliver real economic opportunity. That process continues in April 2027, when Tuvalu hosts the second conference, co-convened with Ireland. Pacific nations are demonstrating global leadership on climate action and setting the agenda for where this goes next.
Which brings us back to Australia and our domestic climate policy. Submissions on the Safeguard Mechanism close on 18 September.
If you’ve never heard of it, you’re not alone, and that’s part of the problem. This is meant to be the policy that makes our biggest emitters cut emissions. Instead, it lets them buy their way out with unlimited carbon offsets. It was dreamed up by the Abbott government in 2016, and every government since has had a chance to get rid of it and put a functional tax on carbon – a carbon price. Every government since has instead reached for the gaffer tape, continued to approve new fossil fuel projects and allow unlimited dodgy offsets for polluters.
There is potentially more carbon offset opportunities on the horizon for our biggest polluters.
A new ACCU method put forward by the ALP NSW government was approved in June. It lets state governments earn credits by putting a logging moratorium on public native forests for up to 100 years (not permanent protection), and it’s been promoted as something to help fund NSW’s Great Koala National Park.
That park was promised unconditionally back in 2015, so the “abatement” it generates isn’t new, and these forests have stood for a millennium, so that carbon was already being absorbed – and released as forests do. Worse, the method only requires the forest to stay standing for 100 years, while the fossil fuel-based carbon dioxide it’s meant to offset stays in the atmosphere for thousands. If this is allowed to pass through the federal parliament, there will be a fresh supply of offsets for polluters to increase their offset based cooking of the books.
This is exactly the accounting trick Pacific nations have been warning us about, and that the TAFF process, of which Australia is a signatory, agreed to reject.
The Safeguard Mechanism review is an opportunity to change course: to cap offset use, end offsets to coal, oil and gas extraction, to require real abatement at the source, and not allow native forests to be used as a commodity and convenient new pollution permit factory.
Louise Morris is an award-winning advocate with 20 years’ experience encompassing climate, energy, forest protection, and law reform in the not-for-profit sector, and federal politics before joining The Australia Institute.
