Parties take different tacks on climate change policies

AS WE gallop towards polling day, climate change policies have once again claimed centre stage as both major parties attempt to woo and pacify voters.

Climate change was in the headlines for much of 2010 after then-prime minister Julia Gillard introduced a price on carbon in exchange for the support of the independents and Greens, but since then it has been on the back-burner, with the politicians busying themselves with boat arrivals, party scandals and budget cuts.

Now with the election, it has again become an issue with Labor and the Coalition each convinced they have the most effective solution to reducing emissions and achieving international targets.

While both parties seemingly agree on the science behind climate change and have committed to a 5% reduction on 2000 levels by 2020 as well as a mandatory renewable energy target of 41 terawatt hours by 2020, their approaches are rather different.

Graphic showing the differing climate change policies between the ALP and the coalition.
Graphic showing the differing climate change policies between the ALP and the coalition.

LABOR: Emissions Trading Scheme

Prime Minister Kevin Rudd admitted this week that the Government, despite its insistence on a carbon tax after the last election in 2010, had not been given a mandate by the people to impose a price on carbon. Last month, Mr Rudd announced the carbon tax would be abolished and under Labor we would move to an emissions trading scheme in July, a year ahead of schedule.

This means the cost of carbon will move from $25.40 a tonne to a floating price (currently $6) with the shift expected to cost the government $3.8 billion over four years. This would be funded by cuts to a number of sectors including the overhaul of the fringe benefits tax on vehicles expected to net $1.8 billion as well as an early end to handouts to electricity generators saving $770 million.

Under the scheme, businesses that had to buy permits for every tonne of carbon they emitted will now have to bid for permits in an auction. The number will be decided by the Climate Authority. Companies will be able to buy 50% of their permits overseas. It is projected to raise $16 billion over four years. Organisations such as the Climate Change Authority, the Climate Change Commission and the Energy Security Fund will continue.

COALITION: Direct Action Plan

Not a lot was known about the intricacies of the Coalition's Direct Action Plan until the election was called and subsequent reports by Treasury and research by Monash University has led to more questions than answers.

The taxpayer-funded policy aims to reduce emissions by creating incentives through an Emissions Reduction Fund. A reverse auction will be used to buy abatement from any source, including energy efficiency, cleaning up waste coal mine gas, cleaning up power stations and landfill gas, reforestation, revegetation or improvement of soil carbon. Funds will be allocated when a direct reduction in emissions has been proven.

The National Greenhouse and Energy Reporting Scheme will be used to determine baseline and proposed emission reduction

levels for each business. A com- pany's baseline or "business as usual" level will have room for growth allowing for increased emissions as the company grows.

If a business pollutes more than the agreed level it will be punished. If it manages to lower its emissions it will be able to sell its CO2 abatement to the government. The policy is vague on what the penalties will be and since the Coalition is adamant the scheme assumes no revenue, one can only infer that either companies will never incur a penalty or no action will be taken if they do. So, this is more a voluntary approach than an incentive-based one with businesses able to continue polluting, without cost, at usual levels.

The Coalition will repeal the Clean Energy Future Plan and close down the Clean Energy Finance Corporation, the Climate Change Authority, the Climate Change Commission and the Energy Security Fund. The money saved from this as well as other cuts made to the budget will fund the ERF.

"The politics of climate change is fraught, especially here in Australia where there is no consensus between the major parties on policies regarding the reduction of emissions," said Nick Rowley, an expert on climate policy.

"The Coalition has a neatly phrased set of policies which may have some effect but anyone who does the numbers cannot see how it adds up."

Spending on it has been capped at $3.2 billion over four years but a report by the Climate Institute shows the Coalition will have to spend $4-15 billion to meet the pledged reduction levels.

Part of the reason for the projected shortfall is the Coalition's unwillingness to use international carbon units, preferring to a uniquely Australian solution. Shadow environment minister Greg Hunt says they will not implement "a great big new tax to fund outcomes in other countries", while Mr Abbott likened buying international offsets to "shirking your environmental duty" despite climate change being global.

"Ignoring international carbon units is one of the areas in which Direct Action stumbles," says Mr Rowley.

The Coalition expects a large part of carbon reductions, some 60% in fact, to come from soil sequestering, ie paying farmers, for example, to lock up the carbon in the soil. But while soil carbon is a promising technology there are a number of variables that make it unreliable and trials by the CSIRO show it is extremely difficult to predict whether it will work to any great extent in the future.

There are other problematic areas too, such as what direction the policy will take after the four-year period is completed and also the possible trade implications should Australia not meet targets.

The Coalition, however, stands by its policy, refuting opinions by climate change and economic experts that this is not a policy that will work within scientific and budgetary constraints.

"I simply don't accept the Climate Institute report," Mr Abbott said. "Climate change policies will be different under us; it's an incentive-based scheme but Greg Hunt is absolutely confident, as I am, that we can purchase sufficient emissions reductions from the funding envelope that we've made available."

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