Extract from The Guardian
- Controversial policy will pass Senate after deal with PUP
- Greg Hunt agrees to investigate emissions trading scheme
- Labor says Australia has ‘no way to reduce carbon pollution’
- Modelling suggests it will not be sufficient to reach 5% target
- Lenore Taylor, political editor
- theguardian.com,
The Coalition will get its $2.5bn Direct Action climate policy
through the Senate after agreeing to investigate the emissions trading
policy it has vowed never to introduce, leaving analysts sceptical
Australia can achieve its 2020 emission reduction target or deeper
long-term cuts.
Environment minister Greg Hunt agreed to an investigation of emissions trading schemes and Australia’s future greenhouse targets as a “gesture of good faith” to win the votes of the Palmer United party, even though he insisted the coalition would never, ever support an emissions trading scheme or a carbon tax.
Despite this, and despite the fact that his party voted to repeal the emissions trading scheme Australia already had in July, PUP leader Clive Palmer said his deal with Hunt had “kept alive the hope of the ETS”, releasing a press release proclaiming “Palmer Saves Emissions Trading Scheme”.
Hunt said the deal was “a tremendous outcome for the government ... a fundamental success”, but Labor, the Greens and environment groups slammed the outcome.
Labor’s environment spokesman Mark Butler said it was “a terrible deal for Australia’s future … leaving Australia with no meaningful way to reduce carbon pollution.”
“I don’t know what Jedi mind trick Greg Hunt just played on Clive Palmer … we don’t need another inquiry. We need action,” he said.
Greens leader senator Christine Milne said: “What we have here is no contribution to bringing down emissions, no modelling to backup the claims, by a government and Clive Palmer which tore down an emissions trading scheme which was bringing down emissions.”
The government has also agreed to a demand by independent senator Nick Xenophon to move quickly to set up a “safeguards” scheme to stop companies increasing their greenhouse emissions – but has not committed to any detail, and Hunt insisted Xenophon had not won any concessions that were not already coalition policy.
He rejected Xenophon’s push to allow the government to purchase international carbon permits, something the prime minister once described as sending “money … offshore into dodgy carbon farms in Equatorial Guinea and Kazakhstan”, even though this would have made it easier and cheaper to reach Australia’s agreed emissions reduction target. It is understood Tony Abbott remained strongly opposed to this idea, despite its strong backing from the business community.
The government has also agreed to retain the Climate Change Authority – which it was once committed to abolish – to undertake the investigation into an ETS and future reduction targets, and provide reports to parliament.
Under Direct Action the government will commit $2.5bn over four years to an “emissions reduction fund” for competitive grants to companies or organisations that volunteer to reduce their emissions.
The “safeguards” mechanism is supposed to impose some upper limit on emissions across the board – including on companies or sectors not bidding in its auction – so that their increasing emissions do not cancel out the decreases in emissions purchased through the government fund.
But Hunt insisted there would be no revenue raised as a result of the “safeguards”.
As revealed by Guardian Australia in August, former Australian Conservation Foundation head Don Henry and co-chair of Greg Hunt’s own expert committee on Direct Action, Danny Price, have been involved in months of backroom talks to win the backing of PUP, Xenophon and DLP senator John Madigan during the three months since the government succeeded in repealing the former government’s carbon pricing scheme.
Deep concerns about the adequacy of the policy remain. The government has not modelled whether the fund has enough money to meet Australia’s minimum 2020 target to reduce emissions by 5%, with Abbott saying during the election campaign he preferred to just “have a crack”.
CCA chairman Bernie Fraser, who attended the press conference to announce the deal with Hunt and Palmer, referred to the authority’s previous work when asked whether Australia could meet its target, and what that target should be.
In February, the authority reported that Australia would have to treble its 2020 target to 15% to remain internationally credible, and without a carbon price or other “effective” policies, emissions will grow to 17% above 2000 levels by 2020. That, it said, would leave an “improbably large task for future Australians to make a fair contribution to global efforts” to constrain global warming to 2C.
Market analysis firm Reputex said their projections showed the emissions reduction fund would only be able to buy 20 to 30% of the greenhouse gas abatement needed to meet the 5% target. The firm says that if the “safeguards mechanism” did become a proper baseline and credit emissions trading scheme, it could help the government make up this shortfall.
Separate modelling by Sinclair Knight Merz/MMA and Monash University’s Centre of Policy Studies, commissioned by the Climate Institute, which used assumptions more generous to the Coalition, found it would need at least another $4bn. Abbott has said if Direct Action falls short he will not allocate any more money.
Hunt would not reveal what advice he had to substantiate his “hope, belief and expectation” that the target would be achieved, but said Australia would be helped by the fact that the decline of manufacturing was reducing electricity emissions and that abatement might be purchased more cheaply than he had originally anticipated.
The government must reveal by early next year what post-2020 target it is willing to adopt, and is under strong international pressure to agree to much deeper cuts, but few observers believe the “direct action” policy could achieve them.
The terms of reference for the CCA review show the report could embarrass the government just as this pressure is intensifying.
Coalition frontbencher Malcolm Turnbull once warned its costs could become prohibitive when Australia has to cut its emissions even further after 2020, especially without the option of buying cheaper offshore carbon permits.
In a 2010 speech after he was deposed as leader, Turnbull said direct-action style schemes were “a recipe for fiscal recklessness on a grand scale” and “schemes where bureaucrats and politicians pick technologies and winners, doling out billions of taxpayers’ dollars, neither are economically efficient nor will be environmentally effective”.
And the “blue book” prepared by the Treasury for a possible incoming Coalition government in 2010 said “a market mechanism can achieve the necessary abatement at a cost per tonne of emissions that is far lower than alternative direct-action policies”.
Environment minister Greg Hunt agreed to an investigation of emissions trading schemes and Australia’s future greenhouse targets as a “gesture of good faith” to win the votes of the Palmer United party, even though he insisted the coalition would never, ever support an emissions trading scheme or a carbon tax.
Despite this, and despite the fact that his party voted to repeal the emissions trading scheme Australia already had in July, PUP leader Clive Palmer said his deal with Hunt had “kept alive the hope of the ETS”, releasing a press release proclaiming “Palmer Saves Emissions Trading Scheme”.
Hunt said the deal was “a tremendous outcome for the government ... a fundamental success”, but Labor, the Greens and environment groups slammed the outcome.
Labor’s environment spokesman Mark Butler said it was “a terrible deal for Australia’s future … leaving Australia with no meaningful way to reduce carbon pollution.”
“I don’t know what Jedi mind trick Greg Hunt just played on Clive Palmer … we don’t need another inquiry. We need action,” he said.
Greens leader senator Christine Milne said: “What we have here is no contribution to bringing down emissions, no modelling to backup the claims, by a government and Clive Palmer which tore down an emissions trading scheme which was bringing down emissions.”
The government has also agreed to a demand by independent senator Nick Xenophon to move quickly to set up a “safeguards” scheme to stop companies increasing their greenhouse emissions – but has not committed to any detail, and Hunt insisted Xenophon had not won any concessions that were not already coalition policy.
He rejected Xenophon’s push to allow the government to purchase international carbon permits, something the prime minister once described as sending “money … offshore into dodgy carbon farms in Equatorial Guinea and Kazakhstan”, even though this would have made it easier and cheaper to reach Australia’s agreed emissions reduction target. It is understood Tony Abbott remained strongly opposed to this idea, despite its strong backing from the business community.
The government has also agreed to retain the Climate Change Authority – which it was once committed to abolish – to undertake the investigation into an ETS and future reduction targets, and provide reports to parliament.
Under Direct Action the government will commit $2.5bn over four years to an “emissions reduction fund” for competitive grants to companies or organisations that volunteer to reduce their emissions.
The “safeguards” mechanism is supposed to impose some upper limit on emissions across the board – including on companies or sectors not bidding in its auction – so that their increasing emissions do not cancel out the decreases in emissions purchased through the government fund.
But Hunt insisted there would be no revenue raised as a result of the “safeguards”.
As revealed by Guardian Australia in August, former Australian Conservation Foundation head Don Henry and co-chair of Greg Hunt’s own expert committee on Direct Action, Danny Price, have been involved in months of backroom talks to win the backing of PUP, Xenophon and DLP senator John Madigan during the three months since the government succeeded in repealing the former government’s carbon pricing scheme.
Deep concerns about the adequacy of the policy remain. The government has not modelled whether the fund has enough money to meet Australia’s minimum 2020 target to reduce emissions by 5%, with Abbott saying during the election campaign he preferred to just “have a crack”.
CCA chairman Bernie Fraser, who attended the press conference to announce the deal with Hunt and Palmer, referred to the authority’s previous work when asked whether Australia could meet its target, and what that target should be.
In February, the authority reported that Australia would have to treble its 2020 target to 15% to remain internationally credible, and without a carbon price or other “effective” policies, emissions will grow to 17% above 2000 levels by 2020. That, it said, would leave an “improbably large task for future Australians to make a fair contribution to global efforts” to constrain global warming to 2C.
Market analysis firm Reputex said their projections showed the emissions reduction fund would only be able to buy 20 to 30% of the greenhouse gas abatement needed to meet the 5% target. The firm says that if the “safeguards mechanism” did become a proper baseline and credit emissions trading scheme, it could help the government make up this shortfall.
Separate modelling by Sinclair Knight Merz/MMA and Monash University’s Centre of Policy Studies, commissioned by the Climate Institute, which used assumptions more generous to the Coalition, found it would need at least another $4bn. Abbott has said if Direct Action falls short he will not allocate any more money.
Hunt would not reveal what advice he had to substantiate his “hope, belief and expectation” that the target would be achieved, but said Australia would be helped by the fact that the decline of manufacturing was reducing electricity emissions and that abatement might be purchased more cheaply than he had originally anticipated.
The government must reveal by early next year what post-2020 target it is willing to adopt, and is under strong international pressure to agree to much deeper cuts, but few observers believe the “direct action” policy could achieve them.
The terms of reference for the CCA review show the report could embarrass the government just as this pressure is intensifying.
Coalition frontbencher Malcolm Turnbull once warned its costs could become prohibitive when Australia has to cut its emissions even further after 2020, especially without the option of buying cheaper offshore carbon permits.
In a 2010 speech after he was deposed as leader, Turnbull said direct-action style schemes were “a recipe for fiscal recklessness on a grand scale” and “schemes where bureaucrats and politicians pick technologies and winners, doling out billions of taxpayers’ dollars, neither are economically efficient nor will be environmentally effective”.
And the “blue book” prepared by the Treasury for a possible incoming Coalition government in 2010 said “a market mechanism can achieve the necessary abatement at a cost per tonne of emissions that is far lower than alternative direct-action policies”.
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