“Direct action”

Where can I find information on “direct action”?

Very little information on “direct action” was made available by Tony Abbott’s team for the September 2013 election. A Green Paper was finally released on 20 December 2013. Labor has insisted on a Senate Inquiry to get more information and expert input. Hearings started on 29 January 2014, and the Inquiry is to report by 24 March.

Do economists and other experts support “direct action”?

No. Tony Abbott has not been able to find a single credible scientist or economist who supports this policy as the way of achieving action on climate change. Even after the 2013 election, surveys of Australian economists show the majority want a market based mechanism on climate change like an Emissions Trading Scheme.

The only real support for Tony Abbott’s “direct action” in preference to a carbon price comes from the very small minority of business economists who don’t want action at all.

The majority view of economists is summarised by Chris Caton (at BT Financial) who said that any economist who did not opt for an ETS should hand his or her degree back.

Isn’t direct action against climate change better than a trading mechanism no-one understands?

“Direct action” is just another one of Tony Abbott’s catchy slogans, with a bit of taxpayers money sprayed up against the wall to hide a retreat from any effective action – it’s not a real climate change policy at all.

If Tony Abbott supported real direct action, he wouldn’t want to take money from the Clean Energy Finance Corporation and the Australian Renewable Energy Agency, which are funding real and cost-effective measures. And he wouldn’t be trying to scrap Australia’s legal cap on emissions, or the mechanisms to tell us how well we’re doing against targets set in law. The Australian public understand this: polls show only 12% prefer Tony Abbott’s “direct action”policy.

What did Treasury say about an ETS versus “direct action”?

In their “Blue Book” in 2010 – the brief that would have gone to an incoming Coalition government if the election or the negotiations afterwards had gone the Coalition’s way – Treasury described a carbon pricing mechanism as “the only realistic way of achieving the deep cuts in emissions that are required”.

They identified ‘scaling up’ from 5% pollution reduction as a major problem with the Coalition policy, saying

a market mechanism can achieve the necessary abatement at a cost per tonne of emissions that is far lower than alternative direct action policies. Moreover, many direct action measures cannot be scaled up, and, for those that can, the cost per tonne of abatement would rise rapidly, imposing further costs on taxpayers and consumers. All of this serves to underscore the conclusion that the sooner an emissions trading scheme can be implemented the better.”

This, and the “Red Book” brief prepared alongside it (for briefing an incoming Labor government) were released by Treasury (with some confidential materials blacked out in both cases) on Wayne Swan’s watch when Labor formed government after the 2010 election. Penny Wong’s Department of Finance did the same.

These “Books” are the ultimate in independent advice. They are prepared by the professionals at Treasury and Finance, before they or anyone else knows who the next government will be.

Tony Abbott and Joe Hockey haven’t allowed the Red and Blue Books which were prepared for a new government in 2013 to be released. This is despite FOI requests, and despite the precedent in accountability set by Labor in Government in 2010.

Who would pay for “direct action”?

You would. Labor’s Emissions Trading Scheme means the big polluters pay. “Direct action” means the taxpayer pays the big polluters.

Are there any other examples of “pay the polluter” schemes like “direct action”?

No. Governments around the world are trying a range of complementary measures to go with carbon prices, including incentives as well as regulation. But there aren’t any other schemes that pretend to address pollution by paying polluters with no legal caps and no penalties.

It would be like paying someone to do less drink driving, but then doing nothing when they keep doing it. Any useful scheme involving incentives has to be part of a larger scheme with proper targets and caps.

Would “direct action” at least pay for emissions reductions that wouldn’t otherwise have happened?

Tony Abbott’s government says this “additionality” will be one of the conditions for “direct action” funding. But we still haven’t seen any mechanism to actually guarantee that the taxpayer won’t be paying for things that businesses would have done some or all of anyway.

The Grattan Institute has questioned the effectiveness of “direct action” in ensuring additionality in relation into coal fired power in particular:

A particular example is in regard to electricity generators where falling demand is already leading to the mothballing and possible permanent closure of capacity. The 2010 published Direct Action Plan allowed for the ERF to support the reduction of emissions from old or inefficient power stations. It would be inappropriate if such funding was to flow to power stations that would have closed anyway.

Submissions to the “direct action” Senate inquiry have also pointed out that in trying to build in “additionality”, the “direct action” plan would disadvantage responsible businesses that have already reduced emissions. Their work would count now as “business as usual” and not be eligible for subsidies. Meanwhile their competitors who hadn’t acted before would be able to copy this same work and bid for their share of the “Emissions Reduction Fund”.

What happens to businesses who don’t make successful bids for “direct action” funds?

“Direct action” doesn’t give any incentive for improved outcomes on emissions for all those businesses who aren’t picked as winners by whatever process Tony Abbott’s government puts in place (we still can’t say what that is, except that it’s not a proper market and he doesn’t want it to be the experts at the Clean Energy Finance Corporation).

Only those who get subsidised will be given any incentives to act under “direct action”. This is unfair and it won’t give us the emissions reductions we need.

Will “direct action” achieve even the 5% emissions reductions target that Tony Abbott’s government says it accepts?

Independent analysis says no (see for example the work referred to in the Climate Institute submission to the “direct action” Senate inquiry).

Tony Abbott has capped the “emissions reduction fund”, whether or not it achieves the emissions reductions that he says he’s committed to. Obvious conclusion … he’s not really committed to the emissions reductions.

Independent analysis suggests that an additional $4 billion of taxpayer funding would be required for “direct action” even to meet a 5% reduction target. In contrast, of course, Labor’s ETS involves polluters paying, and is scalable to meet a tighter cap on emissions.

There are no guarantees of achieving even 5% emissions reductions through the “direct action” system. Because there is no cap on emissions, there is no guarantee that Australia as a nation will meet our international commitments.

Could we plant enough trees to stop climate change?

It would be nice if this were true, but no. As Labor’s Penny Wong has said, this is a slogan or a pamphlet, not a policy.

Monash University research indicates that, just to achieve Tony Abbott’s promises, tree planting would have to cover an area more than twice the size of Melbourne, even under the most optimistic assumptions. Under real world conditions, we would need a very much larger area even to achieve Tony Abbott’s targets, and we would need to sacrifice vast amounts of water and farmland.

And remember, Tony Abbott’s targets are far less than what science tells us we need.

What about the soil carbon bit of “direct action”?

Tony Abbott’s policy presumes that soil carbon can deliver up to 85 million tonnes of reduction per year, at just $10 per tonne. A University of Western Australia study however found the cost to be more like $80 per tonne. Greg Hunt’s own Environment department estimates that the technology can only deliver 1/20th of the claimed reductions. This is why Labor members of Parliament have referred to policies that depend on “magic soils and magic trees”.

Aren’t the proposed subsidies for some extra solar rooftops one good bit of the “direct action” policy?

Tony Abbott’s “direct action” policy said there will be a “one million solar rooftops” program, with $500 million over the next decade for $500 rebates for solar panels, hot water systems and heat pumps, and some other smaller programs including for schools.

But this was scrapped in Joe Hockey’s 2014 Budget (still not passed because it is so unfair and so lacking in sense.)

Even if the solar rooftops commitment in “Direct Action” somehow gets put back, it still leaves more questions than answers. For example:

  • Why adopt a target of one million rooftops over a decade, when over a million rooftops were already fitted with solar in Labor’s last six years, and costs and technology have improved so much in that time that we should expect and plan to be accelerating, not to be slowing down?
  • Like the rest of “direct action”, where are the mechanisms to ensure that the public aren’t paying for things that would have happened anyway?
  • Tony Abbott’s government says there will be priority for low income households. But how do you get a rebate if you are renting? Or if you can’t find the upfront system purchase costs in the first place?
  • How will Tony Abbott’s scheme fit with schemes where you lease solar panels or fit them into your power contract instead of paying an upfront fee you could get a rebate for?
  • Does this provide any incentive for small businesses wanting to install solar power, particularly in rented premises?
  • Isn’t this scheme giving less with one hand than what the other hand is taking, considering Tony Abbott’s attempt to abolish the Clean Energy Finance Corporation, cuts to the Australian Renewable Energy Agency, and threats to the Renewable Energy Target?
  • With the solar installation industry warning of thousands of job losses under Tony Abbott’s policies if we reduce the Renewable Energy Target, why should anyone believe that these policies from his government involve a real increase in support for renewable energy?
  • Doesn’t Tony Abbott making negative and inaccurate comments about renewables, like saying that they put power prices up, tell the real story about whether he really wants to see more solar panels on Australian roofs?

Does Tony Abbott’s “direct action” mean we don’t need the Renewable Energy Target?

No. No independent analysis shows “direct action” as a real policy with good chances of working. So it’s hard to see it as a real substitute for anything. Unless you don’t want a climate policy at all, and are happy to just throw some public money away so you can pretend to be doing something.

Is “direct action” really an excuse for doing nothing very much, at the expense of throwing away public money?

Unfortunately, it looks like the answer is yes.

This is what Malcolm Turnbull warned us :

The fact is that Tony and the people who put him in his job do not want to do anything about climate change. They do not believe in human caused global warming. As Tony observed on one occasion ‘climate change is crap’ or if you consider his mentor, Senator Minchin, the world is not warming, it’s cooling and the climate change issue is part of a vast left wing conspiracy to deindustrialise the world.

Now politics is about conviction and a commitment to carry out those convictions. The Liberal Party is currently led by people whose conviction on climate change is that it is ‘crap’ and you don’t need to do anything about it. Any policy that is announced will simply be a con, an environmental figleaf to cover a determination to do nothing.

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