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The Direct Action plan - your questions answered.

What is the Direct Action plan?

The Direct Action plan is the government's plan to reduce CO2 emissions. It replaces Labor's carbon pricing mechanism. The government describes their plan as the cheapest, simplest and most effective option.

How did Labor's carbon pricing mechanism work?

Under Labor's carbon pricing mechanism, the country's biggest polluters paid for the amount of pollution they produced, giving them an incentive to reduce emissions. Compensation was then paid to taxpayers to help mitigate any price increases, such as the cost of electricity, being passed on, effectively making it cost neutral to everyone except the polluters. An ANU study found CO2 emissions fell by as much as 17 million tonnes in the first two years of carbon pricing.
As you can see, expensive, complex and ineffective.

Wasn't Labor's carbon pricing mechanism a carbon tax?

That's correct. Any from of government pricing that occurs under Labor is called a "tax". When the same thing happens under a Coalition government it is called a "levy".

How is the government's Direct Action plan better?

Three ways:

1. It's cheaper: The main feature of the direct action policy is the creation of an Emissions Reduction Fund, which will cost levy-payers a mere $3 billion over four years.

How is that cheaper?

The government will get back to you on that.

2. It's simpler: instead of charging big polluters, the government will fund businesses to either lower emissions or offset them. Emission reductions will be achieved through a range of measures such as capturing landfill gas and improving soil carbon.

How do you capture landfill gas or improve soil carbon?

The government will get back to you on that.

The reduction estimates must be credible and verified.

What criteria will be used to determine credibility and how will they be verified?

The government will get back to you on that.

Businesses will need to submit tenders for projects that will either lower emissions or offset them. It will operate as a reverse auction, where businesses compete and undercut each other to win a contract and with it, the government's (ie our) money, which the government says will ensure a reduction of emissions for the best possible price.

How?

That's one they can answer now: Because the reverse auction method mirrors the existing National Water Market, which conducts water buybacks to increase river flows.

Isn't that an obscenely expensive and complex scheme, completely lacking in transparency, which results in billions of dollars going to irrigators for little foreseeable environmental benefit?

The government will get back to you on that.

3. It's more effective: While carbon emissions from the electricity sector fell by 7.6% after the introduction of carbon pricing, they are now beginning to rise again, or at least they have been since the government got rid of carbon pricing, so clearly a more direct approach is necessary. The government is committed to reducing greenhouse gas emissions to 5% below 2000 levels by 2020, a target the independent Climate Change Authority described as "inadequate and not credible". The government acted directly on this assessment by axing the Climate Change Authority. The government have also axed the $10 billion green loans bank and given that money directly to the private sector. The Renewable Energy Target (RET), currently set at 20% by 2020, is looking like it will be directly reduced, solar panel rebates with now be directly capped at 100,000 rebates a year and $4 million dollars will go directly to the climate change denying "think tank", the Australian Consensus Centre.

So doesn't that mean the Direct Action plan is complete crap?

Bjorn Lomborg will get back to you on that.

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