PUP does a deal on Direct Action

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If we didn’t know before, we know now that Clive Palmer will do a deal with the devil. He’s going to vote for a scheme that he comprehensively rubbished, said was a complete waste of money and he would never vote for it.

His price?

Clive Palmer won a Government commitment to salvage the Climate Change Authority and to ask it to conduct an 18-month review of the PUP plan to legislate an emissions trading scheme (ETS) at a zero rate.

This is of course a good thing. I understand that the Climate Change Authority will have something to say about targets before we have to make commitments in Paris next December. And the review can take into account Paris outcomes. The review and the work of the CCA may provide a road to redemption for the backsliders in the LNP. Bernie Fraser sees his task in this light, as he was quoted on PM:

What you’ve heard today is perhaps the beginning, the beginnings of an emerging broad, broader political consensus on climate change and the need to take effective action. Because that’s what this country needs more than anything else – the development of a broad political consensus.

Of course, the Government needs six votes from the cross bench.

Victorian senators Ricky Muir and John Madigan and South Australian senator Nick Xenophon have also given their vote to the Government after negotiations.

Xenephon was said to have won four out of five of his requirements. Included was his penalties for big emitters proposal.

To win the necessary support, the government has accepted a proposal by Senator Xenophon to put in place a “safeguard mechanism” to ensure companies comply with the scheme’s requirements.

Details of the safeguard mechanism will be mapped out later. Observers expect it to include some form of penalty for companies that fail to meet government-set benchmarks, although it remains uncertain what the penalties would be.

Uncertain too what the benchmarks will be.

Not included was Xenephon’s proposal to set aside $500 million to buy carbon offsets from abroad to ensure the target is met. No doubt that would be too much like carbon trading for the LNP to stomach.

Christine Milne slammed the direct action policy as “embarrassing”. She reminded us that Palmer helped the Government tear down the ETS. Here’s their Facebook entry.

Bill Shorten:

“Tony Abbott has once again sold his soul to Clive Palmer and Australia will pay the price,” he said.

“This is a dirty deal that will send our country backwards.”

The Climate Institute welcomed the preservation of the independent Climate Change Authority but wanted to see more details about the review.

“Moreover, we are deeply concerned that the amendments to the CFI Bill fail to establish a climate policy that gives a reasonable chance of achieving even the lowest level of Australia’s 5-25 per cent 2020 target range, let along the deeper decarbonisation of the economy that will be needed beyond 2020. The Climate Change Authority has recommended Australia adopt a 2030 emission reduction target of 40-60 per cent below 2000 levels.”

“Without access to international carbon permits, stronger domestic regulations will be needed to meet Australia’s emission goals. The ‘safeguard mechanisms’ in the legislation—the emission limits that companies will have to adhere to—will need to be very strong and get more stringent over time, and regulations to limit emissions and tighten energy efficiency standards across the economy will also be needed.”

Greg Jericho made the excellent point that the Abbott Government “has been extremely successful in making climate change policy more about electricity prices than about climate change.” Maybe Bernie Fraser and the CCA can gently nudge it in a different direction!

There’s more at The Conversation.

Update: Bret Harper and Hugh Grossman give the detail of the agreement on Direct Action. They include:

The government will also withdraw its Clean Energy Finance Corporation (Abolition) Bill 2014 and the Australian Renewable Energy Agency (Repeal) Bill 2014 during the Spring 2014 parliamentary sittings.

The CCA will produce three reports, going into targets for Copenhagen as well as emissions trading schemes.

5 thoughts on “PUP does a deal on Direct Action”

  1. Christine Milne told Fran Kelly this morning that four of the nine members on the Climate Change Authority had resigned, which leaves scope for inappropriate stacking by Abbott’s mob.

    Further to John D’s comment at Saturday Salon, my hope is that Nick Xenephon has had some desirable influence on how these funds are to be spent. The modelling around as to the impact of Direct Action seems to vary wildly. With falling electricity demand it is just possible that the undemanding 5% target by 2020 might be met, but just about everyone agrees that the policy is not scalable for more demanding targets, which are essential to save the planet.

    I think some priority should be given to retiring dirty power generation. I’m not prepared to just say that these are ‘stranded assets’ and it’s just too bad. The amount of compensation, if any, needs to be determined by a competent body.

    Which raises the question as to where the money should come from. Some form of carbon pricing seems the natural source.

    So Clive Palmer’s nickel refinery should pay because it’s dirty, but could be helped to become clean.

    Emissions trading can and should come I think to move money around internationally to where it’s needed without the politics involved in grants programs, which might still be needed in special cases.

  2. Clive Palmer is spruiking ‘clean coal’ this morning. He reckons you can save 30% in emissions by replacing dirty Indonesian and Chinese coal with nice clean Australian coal.

  3. What i said on Sat saloon:

    My attitude is that the LNP version of direct action be given a trial.
    Optimistically we may find that the auctions will attract very low prices per tonne CO2 abatement and that the $2 billion will in fact have a large impact.
    On the other hand we may find that all it does is pay a lot of money for changes that were going to happen anyway. It should be obvious which way it is going by the next election.
    I have argued in the past that a process like Greg Hunt’s auction system (and exchanged emails with him on the subject) so perhaps I am biased. However, I am still inclined to encourage governments to try something that may reduce emissions as long as they don’t want to shut down something like the RET that is actually working.
    I also think that the logical way to finance direct action is a carbon tax. You get a double whammy with this approach.

    So far Abbott has managed to scare potential investors away from the RET and remove the carbon tax and generally worked against climate action. This will be a negative for him at the next election given the general support amongst voter.
    One thing i don’t want to see is Abbott given a get out of jail on the grounds that his key climate action proposal had been blocked by the Senate.
    Either Abbott will make it work which will be good for climate action or it will be a massive failure which may result in a more climate friendly government.
    The government really needs to be sure that it doesn’t turn into a new racket for rich leaners.

  4. I would query Clives claims about Aus “clean coal” comapred with Indonesian coal. I had a quick look at the quality of thermal coal from indonesia. The data here really says that quality varies with the best looking as though they would give low GHG per kWh. (But not enough data to be sure.) A key factor in this assessment is the percentage of mined fossil carbon that actually reaches Chinese boilers.
    Australian thermal export coals may look good but pre export processing and the energy required for transport and processing will take the shine off their appratent cleanliness.

  5. Bret Harper and Hugh Grossman give the detail of the agreement on Direct Action. They include:

    The government will also withdraw its Clean Energy Finance Corporation (Abolition) Bill 2014 and the Australian Renewable Energy Agency (Repeal) Bill 2014 during the Spring 2014 parliamentary sittings.

    The CCA will produce three reports, going into targets for Copenhagen as well as emissions trading schemes.

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