Direct Action keeps state policymakers guessing

Remember how the arrival of the carbon price was supposed to drive Australia to a lower carbon future?
By · 19 Sep 2013
Share this article
By ·
19 Sep 2013
Share this article
comments Comments
Remember how the arrival of the carbon price was supposed to drive Australia to a lower carbon future?

Whether set as a fixed price - $23 a tonne in the first year starting in July 2012 - or a floating price by July 2015 if the present legislation survives, a cost for venting carbon dioxide was to be the country's main mechanism for cutting back on greenhouse gas emissions that the overwhelming majority of scientists say are warming the planet.

While conservative state governments typically bellowed against the carbon price, they were generally united in one thing with the Rudd and Gillard Labor governments in Canberra: no more need for duplication of emission-reducing policies. As a result, the governments deemed only about 34 of 74 state and federal policies dealing with carbon reduction and energy efficiency were necessary, according to Council of Australian Governments figures.

So keen were the Queenslanders to put a scythe through their thicket of schemes that they chopped 10 of the 13 programs that were complementary rather than duplicative to the carbon prices, according to the Climate Institute.

The new Abbott government continues its mantra that the carbon tax must go and that its Direct Action program will deliver the pledged 5 per cent reduction on 2000 levels in national emissions by 2020 at a cheaper cost to the taxpayer.

The problem for state policies, says David Karoly, a climate scientist at the University of Melbourne, is that there is so little detail about how Direct Action works it is unclear what state policies are now complementary.

There is a real chance that the eagerness to roll back emissions policies has been overdone - and we are also exposed to an over-reliance on a single approach.

"Most countries don't rely on a single measure like a Direct Action policy or a carbon pricing mechanism," Professor Karoly said. "They also use complementary measures. "

A big test will come when major liquefied natural gas ventures - some of them with high carbon dioxide content - are up for environmental assessment.

While projects such as the Chevron-operated Gorgon gas project are going ahead with emission controls in place - its gas contains 14 per cent carbon-dioxide that must be removed - others such as Sunrise, Browse and Arrow have yet to be set limits, said John Hirjee, the senior energy and utilities analyst at Deutsche Bank.

And so will these projects have carbon curbs?

"It depends on what the Direct Action policy is," Mr Hirjee said. "And that's unknown."
Share this article
Keep on reading more articles from InvestSMART. See more articles
Join the conversation...
There are comments posted so far. Join the conversation, please login or Sign up.
Related Articles