This week, the federal government and the Greens both declared victory after long negotiations about key climate policy.

The policy - called the safeguard mechanism - imposes a hard cap to stop the nation’s industrial pollution rising.

It also forces companies to shell out hundreds of millions of dollars to offset their greenhouse gas emissions.

Crucially, however, the deal struck with the Greens doesn’t rule out new fossil fuel production - the thing climate scientists say is needed to stop runaway climate change.

So why did the Greens agree to the deal?  And how exactly will this new mechanism help Australia reach its climate targets?

Today, national environment and climate editor Nick O’Malley and chief political correspondent David Crowe join Jacqueline Maley to discuss the week in politics.