Independent senator Nick Xenophon has claimed his proposals to alter the Coalition’s Direct Action climate plan will give the policy “credibility” and may even allow for Australia to make deeper cuts to its carbon emissions.
Xenophon is in talks with the government over his amendments to Direct Action, which appears unlikely to have the votes to pass the Senate in its current form. Since the repeal of carbon pricing in July Australia has had no primary policy to lower emissions.
Xenophon wants to amend the emissions reduction fund, the centrepiece of the $2.55bn Direct Action plan. His proposal would create a penalty system so that around 200 of Australia’s largest polluters would face fines if they breach accepted industry emissions benchmarks.
In its current form, the emissions reduction fund would provide voluntary grants to businesses that wish to lower their emissions.
But the government has yet to include a “safeguards” mechanism that would ensure that emissions would not go up elsewhere in the economy, thereby replacing the pollution prevented by the fund.
Xenophon’s amendments would also allow $500m for the international trading of carbon permits, in order for businesses to keep to the emissions limit. Business groups are in favour of this idea, although Tony Abbott has previously said he doesn’t want money “going offshore into dodgy carbon farms”.
The government has done no modelling to ascertain whether the emissions reduction fund could meet the bipartisan goal of a 5% cut in emissions by 2020, on 2000 levels.
Abbott has instead said the Coalition will “have a crack” at making the policy a success, although independent analysis has cast significant doubt on whether it could be achieved without huge extra expense.
Xenophon, however, told Guardian Australia that a beefed up emissions reduction fund could meet the 5% goal and could even help Australia meet a more ambitious target of a 15% cut, should it agree to deeper cuts at UN climate talks next year.
“I think it could not only achieve the modest target of 5% but also be a springboard further down the track,” he said.
“The architecture is there to ramp up. Obviously we don’t want to spook the horses yet as we want to get the architecture right first, but, if we do, we can get to the 5% and we could get higher targets depending on what happens in Paris next year.
“That will cost taxpayers something, of course, but I want to get a good environmental outcome at the lowest possible cost and I think these amendments do this.”
Xenophon, who has been discussing the amendments with the environment minister, Greg Hunt, said the Coalition’s climate policy would lack “fundamental credibility” if a penalty system wasn’t put in place for businesses who chose to rapidly increase emissions. The independent senator said he was confident that a combination of fines and reputational damage would ensure polluters wouldn’t do this.
“I’m confident this will get a fair hearing from the Coalition and my other colleagues,” Xenophon said.
The Greens, who have said they will work with the Coalition to improve Direct Action, are understood to be looking at Xenophon’s proposals before committing to them. Labor and the Palmer United Party, both of which have labelled Direct Action a waste of money, have yet to formulate a position on the amendments.
The negotiations come as figures released by Cedex show that total emissions in the national electricity market were 1.3% higher in the month to September 2014 than they were in the month to June 2014, which was before the removal of the carbon price.
Generation of brown coal, the most carbon-intensive type of coal, was 2.2% higher in the year to September 2014 compared to the year to June 2014, the figures showed.
