CLIMATE SPECTATOR: The Coalition's not-so-direct action plan

Contradicting policies and statements risk undermining the Coalition's credibility on climate. Tony Abbott must make clear just where it stands.

Climate Spectator

This week we have been greeted by yet further interpretations of the Coalition’s climate change policies, first from Joe Hockey, and then from new recruit Angus Taylor, the Liberal candidate for the seat of Hume in New South Wales

First on Joe Hockey, who when asked about the financial losses to Hydro Tasmania from abolishing the carbon price said the following:

Hockey: "The best thing we can do for Tasmania as a starting point is to get rid of the carbon tax, full stop. If there are individual businesses that will be affected then we will deal with them on a case by case basis, but I am not going to be in the business of penalising every household, penalising every business with higher energy costs and then handing it back to big business and thinking that, somehow, everyone is better off. They won’t be."

Journalist: "So individual businesses that might have a claim…?"

Hockey: "We will consider it on a case by case basis, and we have allocated funds – under our Direct Action plan – to deal with initiatives that are underway."

So they’ve allocated funds under the Direct Action plan to deal with initiatives that are underway?

When you look at the official Direct Action policy document there’s no costing apparent for initiatives underway. Indeed, this could mean anything funded by the Clean Energy Finance Corporation could come at the expense of the Direct Action policy.

We put the question to the office of Greg Hunt, shadow climate change spokesperson, and were told:

"There has been no change in policy and there will be no compensation paid.

"What we will do as part of Direct Action is to have an emissions reduction fund that will provide incentives for businesses to cut emissions on a case by case basis, decided on the lowest cost per tonne of abatement.

"The Coalition will not be paying compensation for repeal of the carbon tax.”

So just like the leaked Developing Northern Australia policy, we seem to have future Cabinet ministers within the Coalition interpreting the Direct Action policy in different ways to what the policy is apparently supposed to be.

But Hockey’s comments do prompt consideration of a legitimate issue.

A range of companies are at critical points where they need to make investments in new energy or emissions intensive plants, ideally taking into account a long-term value on reducing carbon emissions and complying with the current carbon price law of the land.

Even if Abbott wishes to rescind the scheme it may take until 2016 to unwind. Furthermore, if you review the history of past emission reduction policy, the Direct Action emission reduction fund would be lucky to start pushing money out the door within two years.

Do companies simply twiddle their thumbs holding off on investments until this is all sorted?

The principle of not being penalised for taking early action has been a consideration of government emission reduction policy for a considerable period of time. But how you would handle such an issue under the Direct Action policy, no one seems to know. It gets quite tricky because who’s to say that an investment made in the past was dependent on government putting a value on emissions reductions (whether through the carbon price or Direct Action), or would have happened without it? I know for sure that there will be a line of companies at the door of Greg Hunt’s office claiming their past investments require payment from the Direct Action fund.

How do I know this?

Take a look at all the Australian Industry Greenhouse Network submissions to government over the years (as early as 1999) demanding a "no disadvantage” requirement. This essentially would mean that polluting firms would gain credit for any abatement activities they undertook prior to the establishment of a carbon price.

Also, consider what happened with coal mine waste gas gaining access to renewable energy certificates. This was done on the basis that these projects should continue to be financially rewarded for abatement previously recognised and rewarded under the New South Wales Greenhouse Gas Abatement Scheme. But it had always been made plainly clear by the New South Wales government that this scheme would end by 2012 or once a national emissions cap and trade scheme commenced.

Once the lobbying starts, Greg Hunt will have to work overtime to prevent the Direct Action money evaporating through paying for abatement that’s already happened.

Meanwhile, yesterday The Australian Financial Review carried a story about how Liberal Party candidate for the seat of Hume, Angus Taylor, is calling for the Liberal Party to essentially abandon the current level of the Renewable Energy Target.

(The actual analysis sitting behind Taylor’s arguments, a presentation produced by Port Jackson Partners, is worthy of an article in itself – but we’ll have to leave that for another day.)

Intriguingly, as part of Taylor’s argument, we again see Origin Energy’s PNG Hydro project pop up as something that should be eligible for government support, just as was proposed in the Coalition’s leaked Developing Northern Australia policy discussion paper.

Again, this is all contrary to official policy as has been outlined by the official spokesperson on these issues – Greg Hunt. So why on earth do Coalition MPs (and even potential MPs) seem to think that they are free to reinterpret the Coalition’s climate change policy as they see fit?

Tony Abbott needs to make it plainly clear where the Coalition stands on these issues, because for an outsider it looks like something similar to what Peter Garrett told Steve Price prior to the 2007 election: "Once we get in, we’ll just change it all.”

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