Extract from The Guardian
The direct action fund is expected to reduce greenhouse gas emissions
by just 11% by 2025, far less than the expected target the government
is soon to unveil
The Coalition’s emissions reduction fund is likely to cut Australia’s
greenhouse gases by about 11% by 2025, far less than the expected
target the government is soon to unveil, according to a new analysis.
The $2.55bn in the emissions reduction fund, the centrepiece of the Coalition’s direct action climate plan, could be exhausted within 18 months, rendering the policy toothless unless further money is committed, energy market analysts RepuTex said.
Under its current arrangements, RepuTex estimates the fund will help Australia reduce its emissions by just 11% by 2025, based on 2000 levels.
This is well below the expected post-2020 emissions reduction target set to be announced by the Coalition, even though it is unlikely to commit to the 36% cut in emissions by 2025, on 2005 levels, recommended by the independent Climate Change Authority.
Currently, Australia has a minimum goal of a 5% cut in emissions by 2020, based on 2000 levels. Countries are formulating post-2020 targets before key climate change talks in Paris later this year.
The emissions reduction fund, which replaced the scrapped carbon pricing system, works by paying businesses that wish to reduce their emissions. According to an analysis of carbon abatement opportunities across six key sectors, such as energy and agriculture, RepuTex found that a reduction of just 280 million tonnes was “realistically attainable” in Australia by 2025, under the fund.
In April, the first auction paid out $660.4m to businesses in order to prevent 47 million tonnes of emissions being emitted. Federal environment minister Greg Hunt said the auction was a “stunning outcome” although it has emerged that 107 of the 144 funded projects were already operating under a previous scheme.
Bret Harper, head of research at RepuTex, said the emissions reduction fund “probably isn’t of sufficient size to get us to the 2020 target, let alone a post-2020 target.”
“There just aren’t the opportunities to get us to that goal, we will need additional policies to get there, we just can’t get there with the current policy,” he said.
“There’s no talk of further money being provided for the fund so we expect it will be exhausted within 12 to 18 months.
“The current policy doesn’t constrain emissions growth. It’s an incentive-only scheme that has little influence on emissions. There are far greater factors. Changes in agriculture or mining, for instance, would swamp anything the emissions reduction fund does.”
Harper said the climate plan was further hindered by an “ineffective” safeguards system.
The safeguards component is intended to prevent emissions rising elsewhere in the economy, thereby negating the offset emissions. Emissions standards will be set for about 140 companies from July next year, although these “baselines” will be flexible if a business wants to expand its operations.
“The government could enhance the renewable energy target further or they could apply a carbon price,” Harper said. “The most obvious thing is to use the safeguard mechanism and tighten the screws across the board.”
Hunt’s office didn’t respond to a request for comment on RepuTex’s analysis.
The $2.55bn in the emissions reduction fund, the centrepiece of the Coalition’s direct action climate plan, could be exhausted within 18 months, rendering the policy toothless unless further money is committed, energy market analysts RepuTex said.
Under its current arrangements, RepuTex estimates the fund will help Australia reduce its emissions by just 11% by 2025, based on 2000 levels.
This is well below the expected post-2020 emissions reduction target set to be announced by the Coalition, even though it is unlikely to commit to the 36% cut in emissions by 2025, on 2005 levels, recommended by the independent Climate Change Authority.
Currently, Australia has a minimum goal of a 5% cut in emissions by 2020, based on 2000 levels. Countries are formulating post-2020 targets before key climate change talks in Paris later this year.
The emissions reduction fund, which replaced the scrapped carbon pricing system, works by paying businesses that wish to reduce their emissions. According to an analysis of carbon abatement opportunities across six key sectors, such as energy and agriculture, RepuTex found that a reduction of just 280 million tonnes was “realistically attainable” in Australia by 2025, under the fund.
In April, the first auction paid out $660.4m to businesses in order to prevent 47 million tonnes of emissions being emitted. Federal environment minister Greg Hunt said the auction was a “stunning outcome” although it has emerged that 107 of the 144 funded projects were already operating under a previous scheme.
Bret Harper, head of research at RepuTex, said the emissions reduction fund “probably isn’t of sufficient size to get us to the 2020 target, let alone a post-2020 target.”
“There just aren’t the opportunities to get us to that goal, we will need additional policies to get there, we just can’t get there with the current policy,” he said.
“There’s no talk of further money being provided for the fund so we expect it will be exhausted within 12 to 18 months.
“The current policy doesn’t constrain emissions growth. It’s an incentive-only scheme that has little influence on emissions. There are far greater factors. Changes in agriculture or mining, for instance, would swamp anything the emissions reduction fund does.”
Harper said the climate plan was further hindered by an “ineffective” safeguards system.
The safeguards component is intended to prevent emissions rising elsewhere in the economy, thereby negating the offset emissions. Emissions standards will be set for about 140 companies from July next year, although these “baselines” will be flexible if a business wants to expand its operations.
“The government could enhance the renewable energy target further or they could apply a carbon price,” Harper said. “The most obvious thing is to use the safeguard mechanism and tighten the screws across the board.”
Hunt’s office didn’t respond to a request for comment on RepuTex’s analysis.
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