Top polluters to set own limits virtually penalty free, according to Direct Action policy paper

Extract from ABC News

By the National Reporting Team's Lisa Main

Posted about 3 hours ago

Photo: Companies subject to the safeguards will select a baseline for future pollution according to the highest peak of emissions from the past five years. (ABC TV)

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Map: Australia

Australia's 140 top polluters will set their own limits for future pollution virtually penalty free, according to the Government's latest Direct Action policy paper.

The Federal Government is building towards the launch of its flagship climate change initiative, the Emission Reduction Fund (ERF), in mid-April.
As part of that it has released a consultation paper outlining "safeguards" to ensure the big polluters do not offset emissions saved through the ERF.
Companies subject to the safeguards will select a baseline, or limit, for future pollution.
That baseline will be set according to the highest peak of emissions from the past five years.
Grattan Institute energy program director Tony Wood said the ideas proposed in the paper simply would not work.
"The safeguard mechanism was always a critical element of the Direct Action plan, but there is nothing in this safeguard mechanism that puts any absolute limit on a whole range of sectors," he said.
There is also significant wiggle room for companies, according to the paper.
Changes to the baselines can be made if there are changes to the company size or if the company has a "limited ability to control such emissions".
"All of the flexibility seems to be in the hands of the emitter and that runs counter to the fundamental principal of the paper," Mr Wood said.

System designed as a toothless tiger, economist says

Opposition environment spokesman Mark Butler slammed the policy paper as a waste of time.
"This policy is nothing but a dressed-up slush fund, wasting billions of taxpayers' dollars while achieving no meaningful reduction in Australia's pollution levels," he said.
The paper classifies the nation's biggest polluters as those who emit over 100,000 tonnes of carbon a year, covering around 140 companies.
Experts are concerned these companies will stay well below their baselines.
ANU economist Frank Jotzo said the system is designed so no-one gets caught by it.
"This is an entirely toothless tiger, but we hope it could grow some teeth down the track," he said.
"If this is legislated then it could lay the groundwork for a future government to ratchet down the baselines."
The electricity sector responsible for one third of Australia's carbon emissions was singled out for special treatment by the paper.
The Grattan Institute said it was likely the reduction in emissions across the electricity sector in the past five years will be undone.
"When you look at the Government's figures it shows that 2009 was the highest in the past five years in terms of emissions and they are projected to climb again, reaching 2009-10 levels by 2020," Mr Wood said.
"Therefore that will be allowed to happen without constraint."
If companies do exceed their baselines the paper suggests purchasing offsets as a penalty but Mr Wood does not think that is enough.
"For a penalty to work it has to be a deterrent, and for it to be a significant penalty for a big polluter fines would have to be in the tens of millions of dollars," he said.
The Energy Supply Association of Australia has not yet responded to requests for comment.

Businesses and the community are invited to make a submission on the safeguard mechanism public consultation paper by April 27.