Forget the carbon tax – that’s going. It’s now time to concentrate on the Coalition’s carbon reduction plan. The carbon tax junkies blast the Coalition’s plan but it might just work and is certainly worth a try. Assuming the Coalition wins, all Australian enterprises need to look hard at whether they can take advantage of the scheme. Essentially the Coalition’s plan, devised by Shadow Environment Minister Greg Hunt, involves bringing together companies and organisations plus government in joint funding of carbon reduction.
At the Australian Leadership Retreat at Hayman Island I canvassed a number of companies as to whether they would participate. It was clear they had no idea what was planned but once they understood the Coalition plan they were fascinated. They could see how they might participate. I published an outline of the plan last month (The Coalition’s carbon comeback, August 27).
The Coalition will ask companies and organisations to put forward tenders to reduce carbon. Those that tender the lowest price will receive a government subsidy equal to the tender for the anticipated amount of carbon reduction. If industry embraces the scheme there will be many tenders put forward and agriculture will be a vital part of the process.
But there is a snag. While a Coalition government will irrevocably promise the money, the cash will not be delivered until the techniques/investment that reduce the carbon emissions are in place and the carbon has been reduced. But the government “guarantee” is bankable provided the bank believes the company or organisation can deliver on its carbon undertaking.
Effectively, the Coalition policy is that the cost of carbon reduction should be shared with industry, which will gain from better processes. The critics of the policy usually assume that industry will not fund much of the cost. The Coalition hopes that the efficiencies that will go with carbon reduction will see tenders that are much lower than the critics’ sums have calculated.
If it works it will be a scheme that Greg Hunt believes can be promoted around the world. On suggesting that we had a global first, once again, Hunt copped a blast from the carbon tax community. But if the indications at Hayman are correct, Hunt is onto a winner. But there are no certainties.