CLIMATE SPECTATOR: The Coalition's Direct Action dilemma

Climate Spectator

The Coalition's spokesperson for climate issues, Greg Hunt, protests that he shouldn't be expected to provide much detail on the Coalition's Emission Reduction Fund because neither did Labor on its emissions trading scheme prior to the 2007 election.

The reality is that those in the carbon abatement business, for the most part, tell me they just don't trust that the Coalition is fair dinkum about delivering on the 5 per cent emissions reduction target. They've also noticed over the years that budget-funded climate change programs have a strange habit of not spending their allocated funds, and having their funding withdrawn suddenly when government gets in a budgetary pickle. It's been bad enough during times when the government was swimming in revenue, yet the Coalition are likely to face an incredibly difficult fiscal situation if elected.

A purpose-built, legal obligation on companies to reduce emissions is simply far more bankable than reliance on the government budget.

At the Carbon Expo I asked Hunt whether the budget for Direct Action would be increased if it turned out the budgeted funds were insufficient to meet the target. He made it plainly clear the funding was capped and non-negotiable. This is a major issue when you consider how wafer thin the data are supporting the Direct Action costings. It's basically a few letters from assorted industry associations and firms trying to push a barrow in favour of their particular technology.

When I asked Hunt at a conference a few years back what he would do to quarantine or safeguard the money required for the emission reduction fund – such as some kind of escrow account managed by board of guardians much like the Future Fund – his response was that this wasn't necessary. Hunt assured the conference that, "you have my deep and personal commitment to addressing the issue of climate change.” Somehow I don't think banks are too keen on writing cheques based on Hunt's "deep and personal commitment.”

But for most of those people I talk to it's not Greg Hunt that's the problem, it's his colleagues. You know, the ones that got Malcolm Turnbull dumped from the leadership for the very reason that he was committed to meaningful action on climate change.

It's the fact that in spite of Abbott foreswearing his claim that "climate change is crap,” he still states things like the earth was warmer during the time of Jesus than today. Plus he allows a noticeable number of his party room to regularly and prominently question whether global warming is real and a genuine problem. 

You see them in Senate Estimates like Senators Boswell and MacDonald, interrogating government officials about climate science (I've attached an amusing example below). You see them jumping in front of TV cameras, like Barnaby Joyce mocking the idea that Australia should do anything to reduce its own emissions. Then there's Cory Bernardi in parliament just about any time he's not attacking homosexuals or Muslims. And of course it's about the only thing Dennis Jensen talks about other than the wonders of nuclear power (because it's apparently really cheap, nothing to do with how it might address climate change – which doesn't exist). And even though Joe Hockey probably isn't a climate change denier, it doesn't help to have him saying he'll abolish the Department of Climate Change, when anyone with half a bone of policy experience knows that Direct Action can't work effectively without a swarm of bureaucrats.

Hunt argues these climate deniers exist in the Labor Party too, but you don't see Gillard letting these guys go off the reservation talking about an issue they know little about. Even when Fitzgibbon ad-libbed recently about the RET, he was careful to not question the underlying premise that Australia should be reducing its emissions.  

So while Hunt might like to point at Labor's lack of detail in 2007, he faces a fundamentally different situation. He faces a group of stakeholders who have close to zero trust in the Coalition's commitment to deliver on their emission reduction target. His refusal to spell out even some basic fundamental detail on how the emission reduction fund will function only heightens their sense of mistrust.

Under the Coalition's scheme, firms/facilities will have emission baselines applied based on their historical emissions – but Hunt refuses to state what years will be used for this historical baseline. This is not rocket science – he could simply piggy back of the extensive work already done in preparation for the current emissions trading scheme where baselines were prepared for free permit allocation. Or he could even go back to his own government's policy position which set a line in the sand of July 2007.

Also the Coalition policy says firms will pay a penalty if they exceed their emission baseline, but Hunt refuses to even give some general guidance on what the level of this penalty should be. The very credibility and effectiveness of Hunt's policy hinges on the level of the penalty, but he says he won't spell this out until after they're elected via a white paper process. 

Yet he doesn't need a White Paper to come up with some general guidance. Ask anyone with a level of experience in developing and analysing abatement opportunities and they'll tell you it should be around $40 for each tonne of CO₂ above the baseline. If Hunt is so confident that abatement is so cheap then what's the harm in putting in place a reasonable penalty? 

To address the issue of firms having different costs of abatement options, why not let firms participate as buyers of abatement, in addition to taxpayers, in the abatement auction process? Firms could then use this purchased abatement in lieu of paying the penalty.

Hunt expects that businesses engaged in clean energy and carbon abatement should take the Coalition on trust. The problem is that the Coalition isn't doing a very good job of earning that trust.

Excerpt from Senate Estimates Senate Standing Committee on Environment and Communications Legislation Committee – 13 February 2012

Senator IAN MACDONALD: I am not asking you to agree with the science, I am asking whether you could perhaps identify the other, what seemed to me to be, very prominent scientists around the world with a different view to yours, Professor Steffen.

Prof. Steffen: I would have to look at that list. There are probably some names that I would recognise as people who have been speaking out on the 'denier' or the 'sceptic' side or whatever you want to call it.

Senator IAN MACDONALD: Let us just say 'people who have a different view to you'.

Prof. Steffen: The question is this: are they reputable scientists in the climate change field? That is the question I raise. Just to satisfy yourself you would need to look that up yourself.

Senator IAN MACDONALD: I was going to ask you so you could satisfy me. You would know them better than me.

Prof. Steffen: I would be happy to take that on notice if you would send me a copy of the letter.

Answer:

The letter referred to is an opinion piece that was published in the Wall Street Journal on 26 January 2012, entitled ‘No Need to Panic about Global Warming'.

Scientists establish their reputations by publishing their findings in mainstream, peer-reviewed journals.

The following table lists the signatories to the opinion piece and their record of publication on the subject of climate change in mainstream peer-reviewed journals.