Greg Hunt and Clive Palmer resist criticism of deal to pass Direct Action policy through Parliament

Updated

Environment Minister Greg Hunt has defended his deal with Clive Palmer for an investigation into an emissions trading scheme (ETS), despite remaining strictly opposed to the idea.

The Government yesterday struck a deal with crossbenchers to get its Direct Action policy through the Senate.

The legislation will be pushed through the Senate later tonight, after the Government succeeded in extending the sitting hours.

To appease the Palmer United Party (PUP), the Coalition backed away from its plan to scrap the Climate Change Authority, instead asking it to conduct an 18-month investigation into an emissions trading scheme.

No matter what the investigation will find, Mr Hunt said the Government would not implement an ETS.

He said the deal was the only way to get its policy through the Senate.

"We have agreed to a review but our policy is crystal clear, we abolished the [carbon] tax and we're not bringing it back," Mr Hunt told AM.

The Minister denied he had created a make-work program for the Climate Change Authority because he was unable to abolish it.

"We're not able to abolish it... we were able to achieve or we are achieving the implementation of a signature fundamental reform to reduce our emissions," he said.

"Far from being something which deals with paying polluters as some have characterised it, it's incentives on a competitive basis for groups such as Indigenous land management groups, farmers, families, small businesses."

Just months ago Mr Palmer said Direct Action was a "token gesture", a waste of money and hopeless.

The PUP leader is now defending his deal with the Government, telling the ABC's Lateline program that the Coalition's policy had changed since he first opposed it.

"The Government has agreed to 15 amendments to Direct Action that we've proposed and changed the entire face of it," he said.

"They've also agreed to an additional four amendments by Senator [Nick] Xenophon, so Direct Action that we talked about today was a long way different from the Direct Action that I referred to."

Mr Palmer said Direct Action was part of the answer for tackling climate change, saying "it's something we can do in the short term".

"The Government was going to get rid of the Climate Change Authority and we've stopped that from happening, to abolish the Clean Energy Corporation or ARENA," he said.

"Three things the Greens have been unable to achieve for Australia we've achieved."

The PUP amendments will also save 150 existing projects under the Carbon Farming Initiative that would otherwise have ceased operating.

Savannah burning projects carried out by indigenous communities will also be given a guaranteed 25 year period over which they will earn carbon credits for their work.

Australian coal can help reduce emissions, Palmer says

Mr Palmer, who has significant financial interests in coal mining, said Australian coal could be used to reduce emissions around the world because its exports were cleaner than those from countries such as Indonesia.

"If you replace those export markets that are currently being serviced by Indonesia with Australian coal, you'll bring down about 35 per cent of the emissions that would otherwise be generated by using the dirty coal in China just because it's cheaper," he said.

"So I think Australian coal's got a great role to play in bringing down emissions by changing a lot of power stations that are using sub-quality coal at the moment."

Labor, the Greens and environment groups say the Direct Action plan is a disgrace.

Opposition environment spokesman Mark Butler said Australia will be an international pariah.

"I don't know what Jedi mind trick Greg Hunt just played on Clive Palmer, but we don't need another enquiry. We need action," he said.

Greens leader Christine Milne claimed the agreement was a dirty deal between a climate-denying Government and a coal miner.

"Malcolm Turnbull described Direct Action as fiscal recklessness on a grand scale, and that's what it is," she said.

Senator Nick Xenophon will vote in favour of Direct Action and wants the safeguard mechanisms set up quickly.

He said he has secured support from the Government and key crossbenchers for four amendments, including a safeguard mechanism to ensure operators of large facilities have to keep their net emissions within baseline levels.

They will also allow for contract periods of seven years or longer for projects aimed at carbon abatement.

Details of safeguard mechanism to be finalised

Direct Action has two key components. The first, the Emissions Reduction Fund, allows polluters to bid for money to reduce emissions.

They can do that in a variety of ways. For example, by planting trees or becoming more energy efficient.

But because the scheme is voluntary, it only works nationally if other companies do not start polluting more.

"Certainly on its own, the Emissions Reduction Fund will fall short of Australia's 5 per cent commitment by 2020," said Hugh Grossman from market analysis group RepuTex.

Mr Grossman said the success or failure of Direct Action depended on the second part of the scheme, the so-called safeguard mechanism.

It is designed to stop pollution going up.

"I think at this point we need to give the benefit of the doubt to the Government because we're yet to really see the structure of the second part of the scheme," he said.

Topics: federal-government, federal-parliament, climate-change, environment, emissions-trading, environmental-policy, environmental-management, clive-palmer, australia

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