Direct Action: Government releases policy white paper on climate change plan

Updated

The Federal Government has released the formal design of its multi-billion-dollar Direct Action climate change policy, and is writing to key Senate crossbenchers in the hope it will quickly pass Parliament.

Environment Minister Greg Hunt has unveiled the white paper on the central component of Direct Action, the Emissions Reduction Fund (ERF).

Mr Hunt also revealed an extra $1 billion will be allocated to the fund in the May budget, in keeping with the initial policy costing released in the 2010 election campaign.

He says the ERF will buy the lowest-cost carbon abatement schemes to reduce emissions through reverse auctions, and encourage "practical ways of reducing emissions where every dollar is spent on actually purchasing real means of decreasing Australia's overall emissions".

"I want to re-affirm today the Government's clear, strong support for the science underpinning climate change, recognition of the need for both domestic and global action, and our commitment to the 5 per cent target as we go forward," Mr Hunt said.

"All the signs are we will not just achieve our targets but do it easily, on the basis of early indications in the community."

Coalition Direct Action policy

Keep the 5 per cent emission reduction target

Scrap the price on carbon and associated corporations

Establish a $2.55 billion fund to pay businesses for emission reduction projects

Create a 15,000 strong Green Army to conduct conservation work

Read more about the policy in our explainer



Photo: AAP Photo: AAP

The ERF is slated to begin on July 1 with a budget of $300 million, growing to $500 million and then $750 million over three years.

The Government says another $1 billion will be allocated in the May budget "with further funding to be considered in future budgets".

"There are no surprises there. That is what we said four years ago, and that is what we are delivering now," Mr Hunt said.

"That is a very big vote of confidence for business. It's a way of ensuring in a difficult budget time that we are delivering what we said four years ago, and three years ago, and two years ago, and a year ago."

Auctions for business to win the carbon abatement funding will begin late this year and will be conducted every three months.

Mr Hunt says the ERF will focus on "practical actions such as cleaning up waste coal mine gas, cleaning up wasteland fill gas, cleaning up methane, energy efficiency on a significant scale, whether it's industrial, commercial or residential".

But he said the price per tonne of abatement was market sensitive and would depend on the auction process.

The ERF will also have a "safeguard mechanism" to discourage businesses from emitting higher than historical levels.

Mr Hunt says it will apply from July 2015 to approximately 130 firms or facilities that emit more than 100,000 tonnes a year.

But the penalties for a significant rise in emissions are yet to be set.

"We're using the time between now and then to establish and agree with business the parameters," he said.

"The preferred model, which we've set out, is to look at their long-term emissions and to look at potentially the highest point in the last five years, and if they start to - if they breach that, then that may then be the cause for discussion or activity, but I'm not setting out a compliance mechanism today."

The Business Council has joined the Australian Industry Group in calling on the Government to allow businesses to buy carbon permits from overseas.

The BCA says it will continue to lobby for access to credible international permits, arguing it is the lowest-cost way of reducing emissions.

The AiGroup has welcomed the release of more details about the Coalition's policy, but warns it will be difficult to achieve the emissions reduction target.

Legislative hurdles await the scheme

The Government is facing legislative hurdles to introducing the scheme. Its bid to repeal the carbon price has already been knocked back by Labor and the Greens in the Senate, and both parties have slammed the Direct Action plan.

Opposition environment spokesperson Mark Butler says the scheme is a cop out and shows the Government is not serious about tackling climate change.

"It's extraordinary that a policy that was released more than four years ago still has more questions associated with it than answers," he said.

"This gives us no confidence that Direct Action is a policy that will use taxpayers money wisely or will deliver any substantial reduction in Australia's carbon pollution."

Acting Greens leader Adam Bandt says the policy is not going to work.

"The first big flaw in the scheme is that it takes money away from ordinary people and gives it to the country's biggest polluters," he said.

"The second big flaw in the scheme is that there's no legal obligation for Australia or Australia's biggest polluters to actually cut their pollution.

"It won't do what it's supposedly designed to do."

Earlier this week Clive Palmer, whose PUP senators will hold crucial balance of power seats after July 1, criticised the policy and threatened to reconsider his support for axing the carbon tax.

Mr Hunt says the Government will push ahead on both fronts, releasing exposure legislation in the next few weeks and then introducing the laws to Parliament in the budget sittings.

"We are committed and we will not stop until we repeal the carbon tax, and we are committed and we will not stop until we've implemented the Emissions Reduction Fund," he said.

He added that just before the press conference he had "casually bumped into Mr Palmer and we actually had a very, very friendly conversation".

"We'll be writing now to all of the crossbenchers offering to meet and to discuss the carbon tax repeal and the white paper with them."

Mr Palmer has told the ABC his party will "methodically" look at the legislation when it is released.

He says his initial opposition to the plan was based on the lack of detail around it.

Emissions Reduction Fund White Paper "> External Link: Emissions Reduction Fund White Paper ">

Topics: environmental-policy, climate-change, federal-government, government-and-politics, environment, australia

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