The shadow minister for climate change, Greg Hunt, is a humble man – a diligent man, a softly spoken man. And today we can add another epithet: a very generous man.
And he’s not just generous himself. He wants all of us to dig deep and help pay for a ‘fair go’ for a struggling group of Australians: major CO2 emitters.
That’s according to yet another study released to demonstrate just how generous tax-and-spend carbon abatement is compared to the creation of a market for the social costs created by polluting the world’s skies.
The Coalition’s Direct Action – the kind of policy any centrally planned economy would be proud of – could achieve the bi-partisan five per cent target for emission reductions by 2020, but we’d have to pay an average $58 per tonne of abatement to reach that abatement level, according to the study by energy and carbon research firm Reputex.
That’s a pretty pricey way to cut down emissions, but it does at least remind us what generous taxpayers we are.
The money, channelled through the Coalition’s Emissions Reduction Fund, would be paid to high emitting companies via a reverse auction process.
Companies would make a submission to the politburo’s soon-to-be-established Ministry of Largesse, and the cheapest-very-expensive proposal to cut emissions wins a Prius packed with rapidly devaluing recycled-paper bank notes bearing Tony Abbott’s toothy grin on one side, and a halo-wearing Greg Hunt on the other.
Or something like that.
And what can the miserly, mean-spirited Labor Party offer to match this benevolence? Why, a measly $22 per tonne of abatement. That’s all they’re prepared to stump up to hit the same target through the current emissions trading scheme scheme, according to Reputex.
How are we ever going to have the best, smartest emissions reduction plan in the world if it only costs $22 a tonne? We should be aiming to pay at least $100 per tonne!
Why drive a Commodore, when you can pay well over double for the same car and drive a Commodore with a Mercedes badge on the bonnet?
The Reputex study, like the recent study from Sinclair Knight Merz-MMA and Monash University’s Centre of Policy Studies (Abbott’s carbon policy is in tatters, August 15) highlights that at the much higher cost per tonne of abatement, the Coalition plan will miss the 5 per cent target by a country mile. The Coalition has confirmed that its contribution to the Emissions Reduction Fund will be strictly capped.
Hunt said in his Grattan Institute speech recently: “The Emissions Reduction Fund will have an initial allocation of $300 million, $500 million and $750 million over the forward estimates period. This compares with the Carbon Tax of $27 billion over the same period.”
What Hunt forgot to mention is that the Labor billions are recycled – albeit funding quite a quantity of cream biscuits for public servants along the way – approximately half as tax cuts and pension/benefits increases, and the other half as funding to encourage and facilitate investment in renewables energy assets.
So it’s not quite an apples-with-apples comparison.
The Coalition is still committed to have 20 per cent of national power sourced from renewable assets by 2020, but won’t help build that capacity. And, much worse, it’s keeping all of Labor’s carbon tax compensation, even though it plans to do away with the carbon tax that funds it all.
Reputex concludes that Labor’s ETS would hit the 5 per cent target at $22 per tonne, but the Coalition scheme, because it is capped, would allow emissions to rise by 16 per cent from the benchmark 2000 level.
Once in power, the Coalition will, I’m sure, begin looking at creating a real carbon pricing system – just as John Howard, Brendan Nelson and Malcolm Turnbull tried to do.
The latest clue to such a development is Hunt’s announcement that he will use Australia’s chairing of the Group of 20 meeting of finance ministers and central bankers to help broker a super-power agreement on carbon abatement between the ‘G4’ nations – China, the US, India and the EU bloc.
It’s a pretty safe bet he won’t be encouraging them to seek out expensive, centrally-planned approaches to abatement. By then, EU changes to improve their carbon market, plus the continued rollout of ETS schemes in China, will likely see economic sense prevail.
Direct Action has been a wonderful political tool for the Coalition – providing just enough flimsy cover to Tony Abbott as he prosecuted his 'carbon tax lie' campaign against Labor.
However, even the Grinch who stole carbon pricing, Greg Hunt, won’t want to mention this policy on the world stage.