Carbon markets | Subscribe News

Coalition’s plans to remove the carbon price will cost more than $6bn

 
Greg Hunt, Australia

Greg Hunt: emissions trading has failed. Photograph: Penny Bradfield/AAP

 

Powered by Guardian.co.ukThis article titled “Coalition’s plans to remove the carbon price will cost more than $6bn” was written by Oliver Milman, for theguardian.com on Friday 6th September 2013 08.55 UTC

The carbon price, famously described as an economic “wrecking ball” by Tony Abbott, will cost the budget a net $6.04bn to remove over the next four years, the Coalition’s costings have revealed.

The costings released by shadow treasurer Joe Hockey on Thursday show that if the Coalition wins power on Saturday it will save $7.47bn over the forward estimates from its key pledge to remove the carbon price, which is scheduled to move to a floating market-based system next year.

The savings will come from the ending of business compensation measures and other apparatus around the carbon price, although household assistance will remain in place.

But the Coalition will also lose out on $13.51bn in forgone revenue from businesses that no longer have to pay for their carbon emissions. Therefore, removing the carbon price will cost Australia a net $6.04bn in the period until 2016-17.

The emissions reduction fund, one part of the Coalition’s direct action plan, won’t kick in until 2014-15, if enacted. For 2014-15 it has set aside $300m for the scheme, which offers incentives to businesses to reduce their carbon emissions, rising to $750m in 2016-17. The total amount pledged for the scheme in the forward estimates is $1.55bn.

Conservation groups have attacked the measures, claiming that more than $2bn has been cut from overall environmental spending. The total earmarked for the Direct Action plan, which includes money for projects such as green urban corridors as well as emissions reduction, is $2.88bn, down from the $3.2bn originally budgeted for.

The Coalition plans to spend $300m over the four years to create a 15,000-strong “green army” but it will cut $40m over the same period in support for geothermal and tidal power, $60m from clean energy employment hubs and $185m from a scheme to connect renewable power to the grid.

Further cuts at the Department of Climate Change, which has already been dissolved as a standalone entity, will save $45m, the Coalition has stated, while the public rebate has been halved for a scheme to install a million rooftop solar panels over the next decade. The rebate on offer will now be $500 rather than $1,000 and will be administered by the Australian Renewable Energy Association.

Serious question marks have been placed over the efficiency and cost of the Coalition’s Direct Action plan to reduce emissions, with two separate analyses finding it will need billions of extra dollars to achieve the bipartisan 5% reduction in carbon dioxide emissions by 2020, on 2000 levels. Abbott has ruled out extra funding for the scheme.

The campaigns director at Environment Victoria, Mark Wakeham, told Guardian Australia the Coalition had broken its environmental promises before even entering government.

“The costings are worse than we expected in several ways,” he said. “It will cost $6bn to remove the carbon tax over the forward estimates, as well as $1.5bn for direct action. So we’ll be paying $7.5bn to replace a scheme with one that everyone thinks is much worse. It seems crazy.

“This means that it’s not just a question of which will be more expensive out of a carbon price and Direct Action – we’ll be paying for both.

“It also looks like it is backing away from its commitment to solar energy. There’s no evidence that giving a $500 rebate will deliver one million solar roofs. If there are going to be incentives, they will need to be better than $500, especially for solar-powered hot water, which is more expensive than solar PV.”

Wakeham said he was also concerned by the delaying of $650m in water buybacks for the Murray-Darling basin plan. The Coalition has insisted the payments are still on track for the 2019 deadline to buy back water from land managers in order to replenish the river system with 3,200 gigalitres.

“Deferring the water buybacks is really a step towards collapsing the bipartisan approach to the basin plan,” he said. “I know a lot of people in the Coalition don’t believe in the buybacks and when you push money beyond the forward estimates, it often disappears.”

“The Murray-Darling process started under John Howard but there’s a concern it may be weakened. It looks fragile.”

Clean energy advocates have also criticised the Coalition’s approach to renewable energy by promising to abolish the Clean Energy Finance Corporation.

“Taxpayers would be worse off under an Abbott government with its chaotic, poorly modelled Direct Action plan,” said Lindsay Soutar, director of 100% Renewable.

 

Pages: 1 2

Comments are closed.

A sample text widget

Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.