This article titled “Emissions cuts: Coalition considers new regulations to help Direct Action” was written by Lenore Taylor, political editor, for theguardian.com on Friday 20th December 2013 05.59 UTC
The Coalition is considering new regulations to help its Direct Action fund achieve reductions in Australia’s greenhouse gas emissions, but has refused pleas by business groups to allow carbon permits to be purchased overseas.
A “green paper” released on Friday by the environment minister, Greg Hunt, asked for ideas about extra regulations to “complement” the emissions reduction fund, which will provide payments to businesses and organisations which submit ideas for emissions reductions to competitive tenders, starting in June next year.
The green paper largely fleshes out the detail of the Coalition policy that was released in early 2010, but adds the idea of “complementary measures”, giving as an example regulations to force the phase down of hydrofluorocarbons, potent greenhouse gases used in refrigeration.
Business groups, including the Business Council of Australia and the Australian Industry Group, had asked the Coalition to consider buying some carbon reductions overseas, given that the country of origin didn’t change the goal of reducing atmospheric concentrations of CO2. But Hunt ruled this out insisting the Coalition would “clean up Australia in Australia”.
Several studies have criticised Direct Action for providing insufficient funds to achieve Australia’s minimum target of a 5% reduction in emissions by 2020, but Hunt said the “hollowing out” of Australian manufacturing was making the task easier, now requiring reductions of 431 million tonnes of CO2 between 2014 and 2020.
The green paper reveals the government is deferring until 2015 an economy wide process to set benchmarks for industrial emissions to catch and penalise companies that “go rogue”, but is moving quickly to start incentive payments from its new fund, which will disperse $1.55bn over the next three years and an unspecified amount over the three years after that.
The tenders will be administered by the existing clean energy regulator – one of the few institutions set up as part of the carbon tax that the Coalition will not abolish.
The government will enter into forward contracts with successful bidders, which it says will help businesses secure project finance necessary to fully funds their emission reduction plans.
While emissions from electricity generation are lower because of the reduction in energy-intensive manufacturing, the booming coal and LNG industries are driving a big increase in so-called “fugitive” emissions.
Coalmines can apply to the new emission reduction fund to reduce the methane that escapes as a result of their mining, but the cost benefit of doing so is unclear, without any penalty or disincentive due to the carbon tax.
Comments on the green paper must be made before February so the government can finalise its policy in time for the mid year start date.
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