Hunt swings into Direct Action

On the same day Kevin Rudd “terminated the tax”, Greg Hunt finally stepped up to the plate with a considered presentation on the principles and operation of the Coalition’s Direct Action alternative climate strategy.

The shadow minister for climate action, environment and heritage was addressing a highly sceptical audience at a Grattan Institute/ Melbourne Institute of Energy function at Melbourne University on Tuesday evening.

Having circulated a substantial speech in advance, he gave a rapid fire and super confident recitation of the arguments that is bound to become a stock speech through the election campaign. A podcast of the event will be on the Grattan Institute website.

Some students stood and turned their backs but then refused to speak – despite Greg Hunt being keen to debate them. A couple of students in medieval garb tried to present him with a “degree from the Flat Earth Institute”. It got a few laughs but proponents of climate action will have to do a lot better if they want to show Direct Action won’t work.

Greg Hunt was very articulate and had a string of assertions and carefully selected facts that left no room for quibbling. He claimed the Coalition had “over-allocated funds” for buying carbon abatement and would “do it easily” in reaching its targets. The technical challenges of soil carbon capture were dismissed – even when challenged by no less an authority than Professor Ross Garnaut.

There was little new in the speech and no increased funding but it was well packaged as a set of arguments with some clever use of factoids to summon up support from such unlikely sources as Barack Obama.

Greg Hunt’s appearance on the ABC 7:30 Report the previous day had been a disappointment. Sticking closely to the Coalition’s slogans he gave little away in response to Chris Uhlmann’s repeated questioning about future development of Direct Action. He spent 80 per cent of the time attacking the Rudd government

However, in front of the well informed audience at the Grattan Institute, Hunt opened up and laid out the basis of the Coalition’s argument and the principles and arguments we are likely to hear repeated frequently over the coming weeks of electioneering.

He started off on the positives, seeking to distance himself from the climate sceptics and narrowing the debate by committing that the Coalition:

-- Agrees with the government on the science of climate change. 

-- Agrees on the targets to reduce emissions – specifically including the target to reduce emissions by 25 per cent by 2020 if other countries set higher targets.

-- Agrees on using markets as the best mechanism.

This jarred sharply with Tony Abbott’s line on Monday that the carbon price was a “so called market in the non-delivery of an invisible substance to no-one.” However no doubt they will resolve their differences for a more consistent line through the campaign.

Greg Hunt was “100 per cent confident” that Cabinet and Tony Abbott totally supported his version of Coalition policy and that it was a “non-negotiable condition” for him to continue in the job, that he would be given the budget needed to deliver the target.

He challenged “the seemingly received view of some” that the only good market is a punitive tax on electricity and manufacturing. His core argument was that Direct Action was built on establishing “an abatement market not a taxation market” and that buying absolute reductions in CO2 emissions through a reverse auction was more effective and cheaper than an economy wide impost through tradeable permits.

Repetition and simplicity are the common features of Coalition policy and he constantly hammered the theme that “five schemes in three years” showed there was no strategy or consistency for industry.

His arguments for this were presented under three headings:

-- Discussing market theory and the flaws in the carbon tax;

-- Pointing to examples overseas of direct interventions rather than trading schemes; and

-- A description of how the Coalition intends purchasing lowest cost abatement.

Leaving the normal rhetoric and political lines to one side, there were a number of interesting new points that Hunt wove into his speech:

-- The target date for abolition of the carbon tax is now April 2014 – but could be as late as July 2014 when the White Paper on Direct Action would be released.

-- Responding to the Chris Uhlmann grilling, he is now talking about a “Stage 2” of funding after 2015 to buy whatever additional abatement is required (if any).

-- He repeatedly endorsed the 20 per cent RET target as “very, very effective” but carefully avoided committing to the legislated level of 41,000 GWh being retained.

-- Held the US as a paragon because it has reduced emissions in recent years whilst increasing productivity because of “the simple positive incentive of new gas resources unleashed through better technology” and not by a carbon tax.

-- He argues Japan’s current strategy is “incredibly like Direct Action” and should be the basis of a new international agreement based on purchased abatement rather than traded permits.

-- Questions about baselines and auditing were brushed aside by saying that a reduced size Clean Energy Regulator would easily oversee the process.

-- He took on the “skeleton in the closet” of his past support for emissions-based trading. Describing his university work as “a 23 year old undergraduate paper” he argued it supported market based trading for zinc, cadmium and lead pollution to address local problems where there are easy substitutes. But in the case of electricity “where there is no ready substitution and the costs of switching or mitigating are high, then higher prices just become a tax.”

This claim may come as a surprise to the renewables sector – and it also seems at odds with more recent arguments that Greg Hunt has made in favour of emissions trading – such as here in the The Australian.

In a rare flash of bipartisanship, Hunt congratulated Labor on the Carbon Farming Initiative but generally every second sentence attacked Labor measures as a disaster – accusing Rudd of a strategy which “announces, oversells and scraps” projects.

It is clear he is not short on self belief and is hungry to take his message on the campaign trail to sell his magic alternative to a sceptical media and a confused public – with or without the support of Tony Abbott.

The election is no longer a referendum on climate change because it is no longer a yes/no issue. The choice is between a revised market-based scheme which opponents say doesn’t go far enough and an untried incentive scheme which few think is sufficiently funded or based on available technology.

There is a lot of selling to be done.

Andrew Herington is a former Labor Ministerial Adviser and now a Melbourne freelance writer.