States out of step on Direct Action

A report tabled at Friday’s COAG meeting has highlighted the growing contradiction between the position taken by Coalition states and the assumptions built into the federal Coalition’s Direct Action plan.

Each level of government is passing the buck.

Last April, following the first meeting of its Business Advisory Forum, COAG established a taskforce to review overlaps between the carbon price and various state-based carbon reduction and energy efficiency measures. The taskforce operated by seeking reviews from the states of programs they nominated as potentially overlapping with the operation of the carbon price and other complementary Commonwealth programs. 

The report reviewed a total of 61 state programs (the results for another nine in Western Australia were unavailable because of the timing of the recent WA election and four reviews were incomplete). Overall, 49 programs – or 80 per cent of the total reviewed – were found to be complementary to the carbon price. Only 12 of the programs were found to be cost ineffective, non-complementary or duplicating Commonwealth programs.

Yet 22 of the programs have been discontinued or rationalised – a third of all the programs reviewed. Another nine await a decision on their fate, meaning that up to half of the reviewed programs will have been wound up. The taskforce also notes that the states have closed 18 more programs that lay outside the scope of the COAG process.

Interestingly, only half of the project reviews themselves have been publicly released.

Not surprisingly, the Coalition government states were both more likely to find programs were not complementary and more likely to discontinue programs even when found to be complementary and cost effective.

The consistent claim these premiers make is that state action (on renewable incentives, energy efficiency and emissions reduction initiatives) is now unnecessary because the carbon price is intended to deliver Australia’s emission reduction target and further measures by the states are redundant.

In the same breath, the states argue strongly against the existence of the carbon price and support their federal colleagues’ policy to immediately abolish the carbon price if elected in September.

If this occurs the states will be snared in the contradiction of their own rhetoric. If the programs were scrapped because there was a carbon price, then they should be reinstated if the Coalition abolishes the carbon price legislation.

The Coalition Direct Action plan is heavily dependent on making savings across the economy in a variety of cost effective opportunities. The most recent iteration of the policy has de-emphasised the reliance on soil carbon measures and talks more of cost effective assessment of measures.

The rub is that many of these measures fall within state jurisdiction and are the very programs that have recently been abolished or wound back. Are the premiers likely to recommit the funds they have booked as savings and restart the recently abolished cost-effective programs?

You wouldn’t want to hold your breath waiting for that to happen.

The level of climate scepticism that has spread through Coalition ranks around the country will block any moves to restore state-based programs – with an easy excuse of budget deficits. Yet if he became the climate change minister, Greg Hunt would be dependent on the states to deliver large parts of what he has promised through the Direct Action plan.

The COAG taskforce was established in response to business complaints that there were overlaps between the states and the Commonwealth programs. However it concluded that this was a small part of the problem. None of the jurisdictions reported any measures imposing duplicated reporting requirements. None of the states asked for the taskforce to continue. Another 88 programs were identified which the states said did not need review and already met the COAG principles for streamlining programs.

The exception was an overlap the taskforce found between two Commonwealth reporting requirements – the National Greenhouse Energy reporting Scheme (NGERS) and the Energy Efficiency Opportunities (EEO) reporting requirement. As a result the Commonwealth is to reduce reporting burdens and streamline data requirements.

Moreover, in three cases overlapping programs were nevertheless retained to meet broader objectives. For example, the ACT large-scale feed-in tariff was retained.

It is perhaps asking too much that logic should prevail after five years of vitriolic and partisan debate over climate change. However economic pressures and the need for governments of all persuasions to deliver jobs may see some states coming to the realisation that renewable energy programs make sense and grasp the opportunity of getting back into the field. Perhaps.

Denis Napthine certainly gave the wind industry a rhetorical pat on the back when he cut the ribbon at the new Macarthur Wind farm early this month. However he was unable to go the next step of reversing the anti-wind policies introduced by his predecessor, Ted Baillieu – even though it is jobs in his own electorate that are on the chopping block.

Reversing policy direction at a state level is just as hard as it would be nationally.

Andrew Herington is a former Labor Adviser, now a Melbourne freelance writer