Economists and environment groups have strongly rejected the conservative Liberal-National government’s Direct Action climate change policy after key details of its centrepiece, an Emissions Reduction Fund (ERF), were revealed.
Environment Minister Greg Hunt used a late afternoon press conference to unveil the long-awaited White Paper explaining how his alternative to the former Labor government’s carbon price cum Emissions Trading Scheme (ETS) will work.
Serious questions remain over key parameters of the policy, including what price will be paid per tonne of carbon abatement, how the scheme will be policed, and even how the plans to get the scheme through a hostile upper house Senate.
Economist and climate change expert Professor Frank Jotzo, from the Australian National University’s Crawford School of Public Policy, said the policy was economically inefficient and would charge taxpayers instead of polluters.
He added that it was “inconceivable” that it would lead to a lasting change in Australia’s emissions trajectory.
it remains unclear how other crucial elements of the scheme will work, given that companies which exceed carbon emission benchmarks will face no penalties before 2015 at the earliest.
The government is so far refusing to say what compliance measures it has in mind, signalling only that the biggest polluters may be subject to such measures.
Environmental lobby groups WWF and the Australian Conservation Foundation (ACF) have both rejected the policy.
WWF’s Policy Manager for Climate Change Owen Pascoe said WWF remained concerned that the ERF would not reduce carbon pollution and drive the transition to renewable power.
He added that as currently proposed, the ERF is not a credible replacement for the carbon pricing mechanism and replacing the Clean Energy Act with the ERF as currently proposed would be irresponsible.
Mr Pascoe urged the Senate to continue to refuse to repeal the current laws and said a credible replacement for the carbon pricing mechanism would need to put a price and limit on pollution and be capable of achieving at least a 25 per cent reduction in emissions by 2020 and greater reductions by 2030.
ACF’s climate change program manager, Victoria McKenzie-McHarg said the federal government’s Direct Action Plan white paper failed to set out a climate policy that was capable of cutting pollution to the extent required.
“Unfortunately this white paper confirms the government’s proposed plan for tackling climate change is not up to the task of cutting Australia’s pollution to the extent required to deal with the problem,” Ms McKenzie-McHarg said.
“It’s one thing to offer a carrot to companies to cut pollution, but without a stick to stop them increasing pollution elsewhere this policy will do little good for our environment.
“The document released today does not give us confidence Direct Action could cut emissions by even five per cent, let alone higher targets recommended by scientists.
“It would be a disaster to get rid of a carbon price that is working and replace it with a scheme that gives no certainty it will reduce emissions,” she added.
Professor Jotzo said: “The bottom line is that this is an economically less efficient means of achieving emissions reductions.”
The Climate Institute said there were some positive elements in the policy but the group remained sharply critical of the model and particularly the absence of compliance mechanisms to ensure companies took part.
Mr Hunt said individual benchmarks for carbon output would be established by looking back over the last five years to find the highest point of pollution in that period.
“If they breach that then that may be the cause for discussion or activity.”
Erwin Jackson, deputy chief executive of the Climate Institute, said this was inadequate.
“There’s no guide on what penalties or compliance mechanisms will be in place to ensure companies will act in a way that support the national interest,” he said.
The opposition Labor Party’s environment spokesman Mark Butler said it was astonishing that four years after the Liberal-National coalition announced a plan for Direct Action, there were still more questions about the policy than answers.
“It confirms my view that this policy is little more than a dried up slush fund to hand over taxpayer funds to big polluters,” he
