24/04/2014 - 16:03

Direct Action white paper released

24/04/2014 - 16:03

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The federal government has announced it will spend an extra $1 billion on its Emissions Reduction Fund to reduce greenhouse gas emissions, but has failed to reveal what penalties will apply to companies that don’t comply.

Direct Action white paper released

The federal government has announced it will spend an extra $1 billion on its Emissions Reduction Fund to reduce greenhouse gas emissions, but has failed to reveal what penalties will apply to companies that don’t comply.

Federal environment minister Greg Hunt confirmed the government would provide $2.5 billion for the scheme, which it plans to enact in place of the carbon tax, when he released the Emissions Reduction Fund white paper today.

In it the government confirms Australia will meet its minimum target of 5 per cent emissions reduction below 2000 levels by 2020.

The white paper sets out the final design of the government’s plan to tackle climate change, but lacks a number of details industry had called for, including what will happen to companies that exceed their highest emission levels.

Instead the paper says “the government will work with business to establish a flexible framework for complying with the safeguard in the unlikely event of baselines being exceeded”.

The ERF is the centre point of the government’s Direct Action plan which aims to reduce emissions without the carbon tax through a reverse auction.

“The emissions reduction fund will provide incentives for businesses, not punish them,” the white paper said.

Companies and other entities can bid in an auction process to undertake projects that deliver emissions reductions set in five year contracts.

Auctions would occur every three months and start later this year.

Companies with emissions that need to be offset would be able to buy credits for those emissions at the auctions.

The Direct Action policy faces a stiff uphill battle in the Senate where Labor, the Greens and the Palmer United Party have vowed to block it.

The paper said emissions baselines would be set up using data reported under the National Greenhouse and Energy Reporting Scheme.

The Clean Energy Regulator will administer the ERF, and would also be responsible for issuing the carbon credit units to companies that have reduced emissions.

The paper said a review of the government’s position and consideration of future action and targets will take place in 2015.

Mr Hunt said while designing the ERF it considered more than 630 submissions to both today’s white paper and the green paper released last December.

Industry groups have already begun calling for more information on the ERF.

The Australian Petroleum Production and Exploration Association said further consultation and refinement would be needed.

The Australian Industry Group said while the white paper brought Direct Action much closer to fruition there was more work that needed to be done, and it urged the government to consider using lower cost international carbon credits, in addition to Australian carbon credits.

Labor senator Penny Wong tweeted “Release of Direct Action White Paper the afternoon before Anzac Day long weekend. A vote of no confidence. Not even the govt believes in DA.”

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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