Environment Minister Greg Hunt’s Direct Action plan may have been dismissed by the extreme greens, but around the business community, it is generating considerable interest.
When Foreign Minister Julie Bishop and Hunt go to next year’s Paris climate conference, they will now have some cards to play -- particularly as we were one of the few nations that met our 1997 Kyoto protocol obligations, albeit that we did not sign the treaty until we knew we had achieved the required carbon reduction.
We are going to see a large number of innovative proposals put forward which will really deliver value for taxpayer dollars because they are combined with corporate investment.
The essence of the Hunt Direct Action plan is that enterprises compete for proposals that deliver the best value in carbon reduction. While there is an irrevocable guarantee that the government money will come (which can be used as a security for bank funding), the government money does not transfer until the carbon-reducing project has actually been implemented and can be seen to deliver what was promised.
The chaos and wealth reduction that the badly-designed ALP carbon tax created in many ways has set Australia back in carbon reduction.
Greg Hunt is probably the first environment minister since Robert Hill to understand that Australia would need to be smart in carbon reduction and not simply go along with the extreme greens and achieve carbon reduction by slashing growth and national wealth. We have to use technology and better practices so that increased productivity and efficiency becomes the driver of carbon reduction.
The US is doing just that, but it is also aided by the fracking technology that produces low cost gas enabling coal-fired power generation to be reduced. The bad energy and carbon policies of the previous Australian government meant we missed that opportunity, although it may come again.
Bishop and Hunt can learn a lot from the way the team behind Hill played carbon reduction to Australia’s advantage in those initial years of the first Howard government. Hill played a big role in creating an umbrella group of industrialised nations that included the US and Canada. That group no longer operates together and one of the tasks for Bishop and Hunt should be to try and restart it.
Hill made sure that any carbon agreement did not require Australia to count bushfires in carbon emissions. That waiver has since been dropped and Bishop and Hunt must try to bring it back. All it would take would be one major bushfire and all our carbon undertakings would go up in smoke.
It is already clear that Bishop will take a modern version of a key Hill plank at Kyoto to Paris. Australia was able to meet the Kyoto protocol because Hill and his negotiators made sure that the protocol included credits for land clearing. In 1990, the base year, Queensland was ripping trees out at a fast rate, in a similar fashion to what Brazil and Indonesia have been doing over the last decade. Land clearing reduction counted towards carbon reduction in the Kyoto negotiation and reduction in Queensland land clearing played a big role in getting Australia across the Kyoto line.
Just as Hunt’s Direct Action plan combines government and private capital, so the reduction in clearing was a combination of private and government action. The government committed to buying back clearing entitlements from farmers. As it happened very little Commonwealth money was required to reduce Queensland clearing, as Peter Beattie used tree clearing reduction as part of his election campaign and the Queensland government provided the funding that Hill had envisaging coming from Canberra.
Part of Bishop’s plan for Paris is to work hard for rain forest protection and that will be emphasised at the Asia-Pacific rainforest summit in Sydney later this month. This is a 2014 version of the 1997 Kyoto strategy.
It is clear that global warming is advancing at a much slower rate than scientists predicted back in the 1990s. That gives us time and it means that by combining private and government capital in technology investment we can once again play a meaningful role in the carbon game.