What is the Coalition’s direct action climate change policy?

Updated 38 minutes ago

Environment Minister Greg Hunt has released the Government’s Green Paper for its direct action climate change policy.

The paper released today is open for consultation until February, after which time a White Paper will be developed.

The Government wants to replace Labor’s carbon tax with its direct action plan, which would provide financial incentives for polluters to reduce emissions.

The Green Paper details how the Coalition’s Emissions Reduction Fund will operate.

The scheme is budgeted to cost $300 million, $500 million and $750 million over three years, starting on July 1, 2014.

 

Mr Hunt says new figures show Australia needs to to reduce its emissions by less than thought to achieve the targetted cut of 5 per cent by 2020.

“It’s going to be easier to achieve that figure now because of changes in Australian manufacturing,” he said.

“That’s not a desirable cause, but it’s a reality.

“We’ve seen a number of coal mines and a number of manufacturing businesses either not proceed or close down.”

Take a look at our explainer below on how the Coalition’s climate change policy works.

Direct action policy explained

The Coalition Government’s big policy plank has been to remove carbon pricing legislation and replace it with its own “direct action” package.

While both Labor and the Coalition agree on reducing emissions to 5 per cent below 2000 levels by 2020, they disagree on the mechanism.

Under Labor’s carbon pricing, the country’s biggest polluters pay for the amount of pollution they produce, giving them an incentive to reduce emissions.

Compensation is paid to taxpayers to help mitigate any price increases, such as the cost of electricity, that have been passed on.

 

But under the Coalition, businesses will compete to win tenders and be paid to undertake emission reduction projects.

The Government argues that this is the cheapest method to reduce emissions and is better for the economy than a nationwide “electricity tax”.

There are four key pillars that the Government has outlined as part of its environment policy:

• Clean air – Emissions Reduction Fund
• Clean land – Green Army, Landcare reform and simplified environmental assessments and approvals
• Clean water – Commitment to long-term planning for new dams and support for the Murray-Darling Basin Plan
• Heritage protection – New programs focusing on community and heritage landmarks

How does the Emissions Reduction Fund work?

The main feature of the direct action policy is the creation of an Emissions Reduction Fund, which will cost $3 billion over four years.

The fund will call for businesses to submit tenders for projects that will either lower emissions or offset them.

It will operate as a reverse auction, where businesses compete and undercut each other to win a contract and with it, the Government’s money.

The Government says the scheme will ensure a reduction of emissions for the best possible price.

The reverse auction method mirrors the existing National Water Market, which conducts water buybacks to increase river flows.

Emission reductions will be achieved through a range of projects, such as cleaning up power stations, capturing landfill gas, reforesting marginal lands or improving soil carbon.

A project needs to meet two criteria to win a contract from the fund:

• The emission reductions must be additional measures and not just business-as-usual
• The reduction estimates must be credible and verified

Measures that are already required to be carried out by businesses under government regulations cannot be used as projects for the fund.

Only the projects with the lowest cost per amount of abatement will be taken on by the reduction fund.

The fund is capped and Prime Minster Tony Abbott has previously indicated it will not be increased if the 2020 emission reduction target is not being reached.

Green Army

The Coalition aims to build an environmental workforce made up of 15,000 young people to undertake conservation projects.

The “Green Army” will carry out projects such as re-vegetating sand dunes, cleaning up riverbanks, weed control and regenerating local parks.

The workforce will work with and complement local groups such as Landcare, catchment authorities and councils.

Projects will be tailored to local environmental priorities.

Participants in the Green Army (initially only 17-24 year olds) will be paid a training allowance and the Government expects young people to gain valuable work skills from the group.

The training received will count towards the requirements for a Certificate 1 or 2 in land management, park management, landscaping or horticulture.

Full-time projects will run for up to 26 weeks in groups of 10 – nine participants and a supervisor.

Teams will be given money to pay for equipment and materials needed to undertake a project.

The program will begin in 2014-15 with 250 projects, which will be scaled up to 1,500 projects and a 15,000 strong workforce in 2018-19.

It is expected to cost $50 million in its first year and then $300 million over a four-year period.

What is the emission reduction target?

The Government is committed to reducing greenhouse gas emissions to 5 per cent below 2000 levels by 2020.

Environment Minister Greg Hunt said in December 2013 that the carbon dioxide abatement needed to reach the target by 2020 is 431 million tonnes.

There is some debate over whether the target is ambitious enough to keep up with action by other countries.

In October 2013, the Labor-initiated independent climate policy advisor, the Climate Change Authority, said the target was inadequate.

The authority, which is to be scrapped under the Coalition Government, said in a report that a higher target would mean Australia would not need to drastically catch up later to fulfil its fair international role.

It recommended either a 15 or 25 per cent reduction by 2020.

But the Government says its target will not be modified until it sees the outcome of the 2015 Climate Summit in Paris.

What is the Renewable Energy Target?

The Coalition supports the Renewable Energy Target (RET) of 20 per cent by 2020, which is required by legislation to be reviewed every two years.

The target is also supported by Labor.

However, the Coalition has committed to axing the $10 billion green loans bank, the Clean Energy Finance Corporation, which invests in clean energy projects by co-financing with the private sector.

Solar panel rebates will be given to low-income households under the Coalition, with a cap on 100,000 rebates a year.