Abbott should stop pretending he is acting on climate change

Last year, when environment minister (and then opposition spokesman) Greg Hunt gave an overview of his Direct Action plan at a conference in Sydney, one of the first questions he was asked by an incredulous audience of carbon and energy experts was this: Do you actually accept the science of climate change?

Hunt, as he always does, protested that he did. But when he appears before the same audience at a conference in Melbourne next week, he will probably be asked to field the same question again: No one believes that if someone professes to accept the science, and basic economics, that they could produce such nonsensical climate policy as Direct Action and the Emissions Reduction Fund.

The White Paper on these mechanisms released by Hunt under the cover of the Anzac Day holiday late last week pleased practically no-one – not least because there is still so much uncertainty about how it will work, and the government seems intent on making up the rules as it goes along, particularly in relation to the length of investment and the baselines and penalties that might persuade major polluters from polluting more.

The White Paper did not please the climate change deniers, who wonder why $2.5 billion of taxpayers money (in the first four years) is being thrown at companies to partially address a problem that does not exist, and for what Tony Abbott said in his own words (well, borrowed words actually) – is the “non-delivery of an invisible substance to no-one.”

The White Paper did not please those who accept the science, who continue to find the policy preposterous because, even if it could reach the bare minimum 5 per cent reduction target for 2020 – which they doubt – it would have no ability to meet the more ambitious targets that the science demands. (The Climate Change Authority, for instance, says Australia should aim for a 19 per cent reduction target by 2020, just taking in action to date from the likes of China and the US).

And the White Paper didn’t even please those that might want to use it to tap billions of dollars of taxpayers money to use in emission reduction schemes. That’s because the white paper – described as “67 pages of not much” by one legal expert, and a “lot of rubbish” by another, still doesn’t provide the investment certainty for its most simple purpose of buying abatement.

On the most important issues, the length of contracts, the baselines to be used to control emission levels, and the level of Australia’s future ambition, the government appears to be kicking the can down the road – four years after the policy was first unveiled.

Bloomberg New Energy Finance, a global leader on climate and energy market analysis, provided the most damming assessment.

“The Emissions Reduction Fund is unlikely to be robust enough to achieve Australia’s commitment of a 5% reduction in emissions. Hunt’s affirmations are wishful thinking,” said Kobad Bhavnagri, the head of Australian operations at BNEF, in an emailed statement to RenewEcoomy.

“It contains some technical flaws that could reward businesses for tinkering with the way they use energy, rather than actually reducing their emissions. The government has pushed the hardest and most important question, of how to stop emissions growing ever higher, to next year.”

Bhavnagri says the government’s management of emissions will almost certainly have to involve the imposition of penalties, which the government is fervently trying to avoid as it will no doubt be labelled a “tax”. That’s because the safeguard mechanism will apply to 98.5% of the emissions that were covered under the former government’s carbon tax – but the Abbott government still has not said how it will assess that.

On the question of investment, one legal expert said it was absurd that the government said it would still say it wanted to take “market research” on the length of contracts. “Everyone has told (Hunt) that it is not enough. How much research does he need,” the expert said.

There is huge doubt about whether the government can reach a 5 per cent target with its proposed budget of $3.5 billion for the first four years. Little abatement has been achieved in carbon farming, and there is still too much uncertainty for energy efficiency. There is also concern that the process of assessing projects and conducting the auction will be labour-intensive, and possibly beyond the skills of the much-reduced authorities charged with its administration.

Hunt says that Australia will review both the its pre-2020 and its post 2020 targets in 2015, when the lay of the field for the Paris climate change talks becomes clearer, and other countries have laid their ambition on the table.

The irony of the Direct Action plan is that – if it were to remain policy over the long term – Australia would have to put in place much higher renewable energy targets and much stricter emission standards for its generators.

Erwin Jackson, from The Climate Institute, says if Australia was to drive the new multi-billion dollar clean investments consistent with avoiding very serious climate impacts, then the Government would need to be spending $3-$5 billion every year by the end of the next decade to achieve those goals.

“While some positive improvements have been made, as it currently stands the Emission Reduction Fund will not be an enduring climate policy. It simply can’t meet the long-term challenge of climate change,” Jackson said.

“The Government has deferred key compliance decisions and is unclear on future spending commitments, while at the same time it intends to dismantle the current legislation.”

“In the absence of binding and declining pollution limits, the Government will need to strengthen the existing Renewable Energy Target to 30-40 per cent by 2030 and slap new regulatory standards onto industries.”

However, the chance that a note will suddenly be dispatched from the PM’s office instructing Warburton to accept the science of climate change, and make a proper assessment of the benefits of renewables, are about as likely as Warburton arriving to that conclusion on his own accord.

As Climate Change Authority chairman Bernie Fraser lamented this week, the attack on renewable energy is merely motivated to protect the interests of big business, not the consumer or the nation as a whole.

Yet Abbott, and indeed Hunt, are grimly determined to dismantle the CCA, the Clean Energy Finance Corporation, and strip more funds from the Australian Renewable Energy Agency – removing the expertise and independent advice on climate science, policy and finance, and the funds and mechanisms that could leverage private investment.