Prime Minister Malcolm Turnbull says emissions trading schemes are a “valid mechanism”, but has indicated that the Coalition government will continue with its current Direct Action policy, at least until a full review in 2017.
Turnbull has been a long time supporter of emissions trading as the most effective mechanism to reduce emissions, and from the backbench was a harsh critic of the current policy.
But under a deal with the conservative rump of the Liberal Party, Turnbull apparently agreed to make no changes on climate change or gay marriage policies, meaning that he has to defend the policy the policy he once ridiculed.
In an interview with ABC Radio National, Turnbull said he was “satisfied” that the targets by Australia for the Paris climate change conference – a 26-28 per cent reduction on 2005 levels by 2030 – was “an appropriate one, and comparable to similarly situated countries.”
Turnbull said it was “very ambitious” on a per capita reduction, which he said was the best way to measure the target, due to Australia’s population growth. Others point out that Australia has achieved virtually no reductions in the past 15 years, and will still have the highest per capita emissions by 2030 if it meets those targets.
Asked about his own previous support for an ETS, a policy commitment that cost him his job as leader of the opposition in 2009, when he was beaten by one vote by Tony Abbott, supported by a group of climate deniers within the party, Turnbull said:
“Emissions trading schemes are a valid mechanism”, although they “have to date worked better in theory than in practice.” No doubt he is referring to the European scheme, which has been wallowing at low prices, primarily because the EU has for a long time been on target to meet its 2020 targets, but also because it issued too many permits.
Turnbull said environment minister Greg Hunt has been achieving “significant reductions’ with his emissions reduction fund, which is about to hold its second auction.
Turnbull said the mechanism will be reviewed in 2017. “If elements are not working as well as they should, they will be tweaked,” he said.
” We are an agile government … If we find it doesn’t work, we will do something different … we are constantly learning and we are prepared to change to achieve our objectives, if it can be done cheaper and better.’
Former PM Abbott has been boasting that no policy has changed since his replacement by Turnbull two weeks ago, but this is likely to be a gradual process. This week, Turnbull signalled an about-face on the Abbott higher education policies, much to the horror of his predecessor.
Climate change is more sensitive. But few if any independent analysts give the policy any chance of meeting even Australia’s modest targets, and many question whether the projects being funded by the ERF are “additional”, or would have happened anyway.
Energy market analysts Reputex on Thursday predicted that up to $1 billion of contracts could be bought in the upcoming auction, leaving the government with just one third of its $2.55 billion to meet the initial 5 per cent reduction target for 2020.
It expects the next auction to be dominated by coal mine waste gas projects and industrial energy efficiency projects, but unless the fund is topped up it will be unlikely to play any major role in supporting Australia’s long-term emissions reduction target.
The alternative is to transition the scheme into a de-facto carbon trading scheme, by ramping up the “safeguards mechanism”, which would force emitters to cap their emissions, or buy credits from other parties if they exceed their allotment.
Currently, the emitters face no restrictions because they will set their caps on their highest emissions levels in the last five years, and can apply for an increase is “special” circumstances.
But Hunt told the Guardian in an interview that the 2030 target is based on the assumption that the so-called “safeguards” mechanism will deliver 200 million tonnes of emission reductions between 2020 and 2030, or almost a quarter of the total cuts required.