Greg Hunt has insisted the Coalition’s Direct Action plan is the “best and most efficient” climate policy in the world, as China, the world’s biggest carbon polluter, confirms it will begin a national emissions trading scheme in 2017.
Business groups and leading analysts say Direct Action cannot meet Australia’s new promise to reduce emissions by between 26% and 28% of 2005 levels by 2030 without significant changes, but Hunt insisted it would easily do so and reduce electricity prices at the same time.
“We have arguably the best and most efficient scheme in the world, there are different forms of market mechanisms but arguably the most pure form is an action, which is what we have,” Hunt said.
But Prof Frank Jotzo from the Australian National University’s Crawford School said confirmation of China’s national emissions trading scheme was “a great boost for emission trading schemes around the world because many countries are looking to China and will ultimately emulate what China does”.
“It really demonstrates that emissions trading is the way of the future,” Jotzo said.
Business leaders and environment groups say Direct Action has little chance of meeting Australia’s new 2020 target as it stands, particularly because its so-called “safeguards” mechanism – designed to make sure rising industrial emissions do not undo emission reductions bought through the $2.5bn emission reductions fund – sets such lenient baselines that major emitters will be able to significantly increase their greenhouse pollution.
But tougher baselines to force gradual emission reductions on electricity generators and heavy industry would impose costs that would be passed through to consumers. Hunt’s biggest selling point for his taxpayer-funded scheme is that it does not increase electricity prices.
“We are actually reducing our emissions ... we are getting the job done without a carbon price and by lowering electricity prices,” he said. “Mr Shorten wants to increase electricity prices.”
The Labor leader has promised to reintroduce an emissions trading scheme, but has provided no details nor spelt out the 2030 target that a future Labor government would seek to meet. Shorten said China’s announcement was “very exciting”.
“For two years, the Liberal party of Australia has been – and some conservative commentators in the media, have been pouring scorn upon Labor and saying, ‘What would Labor know, they are crazy, we shouldn’t have an emissions trading scheme.’ Labor has stuck to its guns and the tide is turning on real action on climate change,” Shorten said.
“If Labor is going in step in lockstep with rest of the world, why is Malcolm Turnbull the only person who is chasing after Tony Abbott’s discredited schemes? We all know that Malcolm Turnbull has sold out his views. If you had been asking this question in 2009 to me or Malcolm Turnbull we would have had the same position.”
The independent senator Nick Xenophon has said he will try to force a toughening of the “safeguards” mechanism by threatening to support Senate disallowance.
Turnbull lost the leadership of the Liberal party in 2009 over his backing for the former Labor government’s emissions trading scheme. Before becoming prime minister this month, he pledged to stick with Direct Action but has not commented on whether the policy would change.
The first Direct Action auction spent $660m to buy 47m tonnes of greenhouse abatement, but was criticised because it mostly funded projects already operating, some of which would have continued without additional government money.
