Malcolm Turnbull says Tony Abbott is responsible for the review of the Coalition’s Direct Action policy because it was built into the work program when he was prime minister.



The prime minister on Tuesday attempted to hose down a breakout within Coalition ranks triggered by the government releasing the terms of reference for the Direct Action review on Monday.

The minister for energy and the environment, Josh Frydenberg, has flagged that the review, to run throughout 2017, will consider the merits of an emissions intensity trading scheme for the electricity sector.

While that course of action has been recommended by some climate groups, by the energy industry and by Csiro, and by the Climate Change Authority, the preliminary signal sent various Coalition backbenchers to the barricades and prompted the defence industry minister, Christopher Pyne, to declare that the Coalition was not in favour of carbon pricing.

The South Australian Liberal senator Cory Bernardi has declared carbon trading “economic suicide”.

The chair of the Coalition’s backbench committee on energy and the environment, Craig Kelly, said on Monday that carbon trading was not government policy, although he said on Tuesday he might consider an emissions intensity scheme for electricity if it lowered power prices.

While some in the Coalition clearly want to revive the toxic carbon “tax” debate prosecuted by Abbott in the lead-up to the 2013 election, Turnbull told reporters in Sydney on Tuesday he had never supported a carbon tax.

Australia's energy transmission industry calls for carbon trading Read more

An emissions intensity scheme is not a carbon tax but a form of carbon trading known as a baseline and credit scheme. Baseline and credit schemes would force electricity generators with sufficient emissions intensity to breach the baseline to buy credits to offset their excess emissions.

As to thelooming review of Direct Action, the prime minister said this had been part of the Coalition’s policy since 2010, which made it a legacy item of business from the Abbott years.

“The review of the climate policy which will be undertaken next year has been part of the Coalition’s policy for many years, long before I was prime minister,” Turnbull said on Tuesday. “This is absolutely part of our policy. It’s part of the policy we took to the election in 2013 and 2016 and, indeed, we took to the election in 2010. This is business as usual.”

The renewed outbreak of infighting came as Australia’s electricity and gas transmission industry called on the Turnbull government to implement a form of carbon trading in the national electricity market by 2022 and review the scope for economy-wide carbon pricing by 2027.

While Abbott once characterised carbon pricing as a wrecking ball through the Australian economy, the new report, backed by Csiro, says adopting an emissions intensity scheme is the least costly way of reducing emissions and could actually save customers $200 a year by 2030.