Environment Minister Greg Hunt has just launched an Emissions Reduction Fund White Paper. The reference group formulating it was co-chaired by Danny Price of Frontier Economics, who forged many of the bullets used by the lobbyists promoting carbon taxes, and David Green head of the wind farm lobby group, the Clean Energy Council.
In their (undated) letter of transmittal, the co-chairs say, “Climate change is an issue with potential to touch the lives of all Australians. We believe that it is important that the policy response is implemented in an efficient and effective way, which allows Australia’s climate change commitments to be met in ways which engage Australians and support sustainable economic growth.”
Rushing out a report hours prior to the ANZAC Day public holiday would lead some deluded cynics to think that there is something here that the government wants buried. It is not clear what though.
Noting that Direct Action is the centrepiece of the government’s emission abatement policy, the Executive Summary loftily claims, “Our ability to build a strong Australia depends on our success in lowering business costs, improving competitiveness and protecting the environment for current and future generations.”
In spite of discarding the carbon tax and (presumably) emasculating the renewable rort, the government is still planning to reduce carbon dioxide emissions by 20 per cent of business-as-usual by 2020. A budget of $1.5 billion is committed to this with a further $1 billion to be considered. This is planned to be a very efficient use of funds. It replaces:
- some $10 billion a year in carbon taxes,
- over $3 billion a year in direct budget support,
- Jillian Broadbent’s $10 billion Clean Energy Finance Corporation (one of the Directors of which is Anna Skarbek, head of the ALP government funded lobby Climateworks and also on the Energy White Paper Panel)
- And the (hopefully) to be repealed Renewable Energy Target which is on course to costing some $5 billion a year by 2020
The $1.5 to $2.5 billion fund will be used to buy out emissions from those sources best able to sell them most cheaply. And it is said it will do so for only “Genuine emissions reductions … that make a real and additional contribution to reducing Australia’s greenhouse gas emissions”.
The White Paper says “The Emissions Reduction Fund is founded on a presumption of economic growth as a positive and inevitable good for Australia.” Phew!
It is barely conceivable that any such opportunities exist at the low cost one-off payment that $2.5 billion entails. The budget means the 131 tonnes a year are to be bought at a one-off payment of $20 per tonne. What a bargain when Treasury is talking of buying the emissions at over $70 per tonne per year by 2020 and The Treasury assisted Garnaut report had a price of $250 per year per tonne by 2050!
There is a safeguard provision that “will ensure that emissions reductions paid for by the Emissions Reduction Fund are not displaced by a significant rise in emissions elsewhere in the economy.” If properly enforced that should ensure that no money is actually squandered in pursuit of this will o’ the wisp. But then again the outlays are to be overseen by a government agency that has a firm belief in the merits of unilateral emission reductions so this is likely over-optimistic.