Graph Unsupervised Domain Generalization via Environment Confusion

Graph-level out-of-distribution (OOD) generalization is critical for deploying graph neural networks in real-world applications where distribution shifts are inevitable. Existing approaches typically require class labels during representation learning to decide which substructures are predictive, limiting their applicability. We propose **SCARCE**, a label-free representation-learning framework that yields distribution-shift-robust graph representations from an environment partition of the training graphs alone, whether that partition comes from dataset metadata or, when none is available, from clustering a self-supervised embedding. Our method operates in two stages: (1) a variational graph autoencoder is warm-started for graph reconstruction; and (2) an adversarial confusion mechanism forces the encoder to produce representations from which a discriminator cannot distinguish environments, while preserving graph-reconstruction fidelity. We provide theoretical analysis showing that environment confusion contracts environment-discriminative directions in the representation space, which, under regularized downstream classifiers, is equivalent to imposing a stronger directional penalty on environment-associated features. This feature-reweighting mechanism reduces reliance on spurious correlations without erasing information, offering a label-free, continuous relaxation of last-layer reweighting methods. Experiments on a controlled synthetic model, the GOOD-Motif benchmark, and molecular property prediction under assay, scaffold, and size shifts show that **SCARCE** achieves state-of-the-art OOD generalization among label-free methods, using no class labels during representation learning.