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Liberal Opposition Climate Policy faces major problems

February 2, 2010

Today, the Coalition proposed a Direct Action Plan, which the coalition describes as ‘simpler, cheaper, and more effective way’ (Tony Abbott) of addressing a climate change target than the Government’s Carbon Pollution Reduction Scheme (CPRS).

Taking the proposal in good faith and at face value, thus disregarding the potential motivations of the leaders of the Liberal (‘climate change is crap’ – Tony Abbott) and National parties, some preliminary assessment of the proposal follows.

The centrepiece of the $3.2 billion plan is a $1bn fund focussed on rebates to solar PV, Solar Hot Water, and forestry and soil carbon offset projects.

Some practical problems with the policy are as follows:

1. Suggesting that Solar Hot Water and PV should receive additional rebates would further distort and undermine the 20% Australian Renewable Energy Target (RET) should no reform of the RET be forthcoming;

2. Solar PV is the most expensive form of reducing greenhouse gas emissions available in Australia;

3. Soil carbon projects may not generate abatement that will be accepted by the UNFCCC, unless Australia also takes on board emissions liability from bushfire;

Some conceptual problems with the approach are as follows:

1. The polluter does not pay, taxpayers do out of general revenue. 

2. The policy is based on direct government intervention, rather than market-based – therefore there is little opportunity for technology or service innovation and value-add;

3. Direct government intervention does not allow for lowest-cost abatement to be sought.  Therefore, the spending is inefficient;

4. The spending is thus-far unfunded

We look forward to understanding in greater depth the opposition policy.

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