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Words are cheap, but Direct Action sure isn’t.

In an interview on Lateline in October last year, Greg Hunt said that the carbon price “doesn’t work”, “doesn’t do the job” and is “a just hopeless means of achieving the outcome.”

In defending his move to disband the Climate Change Commission, the Climate Change Authority, the Energy Security Fund, the Clean Energy Finance Corporation and ARENA, Hunt said

“At the governmental level, the primary scientific agency is the Bureau of Meteorology. 1,700 staff. I spoke with the director of the Bureau this evening and invited them to provide a scientific briefing, reaffirmed a complete commitment to their independence, to their original research and to the extraordinary capacity that they give to Australia to look at meteorological questions and broader global questions.

The Bureau is the originating scientific agency for meteorological matters in Australia for matters relating to climate and matters relating to climate science. The CSIRO also backs those up. So, they are strong, deep, independent scientific agencies whose independence isn’t just guaranteed under us, but is welcomed.”

He then proceeded to cut $10 million from the BoM, with an anticipated loss of 80 jobs next year, and he cut CSIRO’s funding by $111 million over four years, which will result in 500 job cuts at the nation’s peak scientific organisation.

Hunt went on to say

“we have bipartisan support for the science. We have bipartisan support for the targets. The disagreement is about the carbon tax and the mechanism because emissions go up, not down under the carbon tax and because it does enormous damage to our cost of living and our economy by being an electricity tax. In short, it doesn’t work, but it does do damage.”

Figures released last week revealed that the annual growth of cost of living for all households slowed over the past three months (employee and age pensioner households increased by just 1.9%), largely due to the end of the carbon price in June.

But as Greg Jericho points out, any broadening of the GST base to include food, or an interest rate rise, or fuel indexation, will quickly wipe out any gains made by removing the carbon tax which was only slated to run for another year with a fixed price.

While the cost of living increase may have slowed, two new studies show that brown coal and black coal generation has jumped sharply in the four months since the carbon price was dumped by the Abbott government. The share of coal has gone up from 69.6% of sent out electricity in June to 76.4% in October.

And emissions have also jumped sharply, with one study from the Melbourne Energy Institute saying “emissions intensity’ has already jumped an “unprecedented” 10 per cent, and another saying that Australia’s aggregate emissions could rise more than 10 per cent over the year, after falling nearly that much while the carbon price was in place.

Danny Price, from Frontier Economics who helped the Government develop its direct action plan, was also interviewed on Lateline in November last year.

He insisted that penalties for industries that increase their emissions is a crucial part of the plan.

“The direction action policy has always had a penalty included in it. It’s been a consistent feature of direct action from the very first document, that’s been put out on direct action.

The Government, of course, hasn’t yet put anything out about how the penalties will work or the baselines will work which will be a challenge for the Government and they’re the two, you know, most difficult issues for the Government to deal with. But I guess we’ll get to see what the form of the penalty is going to be.”

But not for a while. Nick Xenophon insisted on a safeguards mechanism that will be negotiated in the next 12 months that will determine how tight emissions limits will be and the penalties for exceeding them.  Strangely, the emissions reduction fund auctions will apparently begin before the baselines are determined.

“I can announce this today, that the first auctions under the Emissions Reduction Fund, after having spoken to the Clean Energy Regulator on Friday, will be held in the first quarter of next year,” Mr Hunt said on Sunday.

When asked how much Direct Action would cost to achieve the 5% reduction target by 2020, Mr Price, who is the government’s expert on this, said

“Well, I don’t know yet because it will depend very much on where the Government sets the baselines, the nature of the penalties that are applied, but in the order of between $7 billion to $10 billion but probably on the lower end of that range.

The now Government, but then Opposition, had said initially that they had funds available for up to $10.5 billion till 2020. My understanding is that there are funds beyond the forward estimates. And that would be the extra $4.5 billion plus the 2.55 would be very consistent with what I’ve just said I think the costs are likely to be.”

The budget text states that the government will provide an “initial” $2.55 billion to establish the Emissions Reduction Fund, which is consistent with what the Coalition had promised prior to the election over the first four years of the scheme.

Yet the table which accompanies this text listing the hard dollars provides a contradictory and highly confusing story. It outlines a total funding allocation over the next four years of just under $1.15 billion.

A spokesperson for Greg Hunt said that the Clean Energy Regulator is free to at least commit to abatement purchasing contracts up to $2.55 billion over the next four years. However, they expect that because the regulator will only pay for abatement once it is delivered, the expenditure of the $2.55 billion will be spaced out over a period beyond the forward estimates period to 2017-18.

Market analysts Reputex suggest the $2.5 billion fund may get Australia about a third of the way to our low 5% target, but not much more.

Price stressed that Direct Action requires investors who, in turn, need certainty about legislation and regulation.

“this has to be a policy orientated towards investors and I just can’t see that investors are going to invest in a scheme [carbon pricing] where the Government can and will change the price to suit the politics and it could render their investments completely stranded, redundant.”

I wonder how he feels about the Coalition’s backflip on the Renewable Energy Target leading to the decimation of the renewable energy industry and the loss of billions of dollars investment that would have contributed towards meeting our emission reduction target whilst creating new jobs.

Greg Hunt told Emma Alberici

“I’m the Environment Minister and my job is to make sure that we do two things: that we understand the challenge and we respond to the challenge. And then the third thing which goes beyond that is to make sure that our actions are sensible and prudent and real.”

Hunt said on Monday that cleaning up existing power stations was the “the best thing” thing the government could do to reduce emissions, and pointed to the CSIRO’s direct injection carbon engine (DICE) technology as a way to reduce emissions from brown coal.

But, as pointed out in Crikey, rather than being a “major CSIRO research project”, there is a small team of two to four well-intentioned scientists and engineers working out of the CSIRO’s energy labs in Newcastle, running a 4-litre, single-cylinder diesel engine on coal, on a shoestring budget, struggling to find industry partners. The technology is drastically underfunded, unavailable at scale, and has a colourful history of unsuccessful research sponsored for very many years by miner Travers Duncan who has been part of the ICAC investigation into White Coal and Eddie Obeid.  Any significant commercial roll-out is decades away.

Hunt should also know that the recent apparent breakthrough in capture and storage of coal emissions – the Canadian Boundary Dam Project – was hideously expensive. They spent $US1.24 billion to retrofit an existing power station to produce 110 megawatts of power to the grid. Assuming 80 per cent utilisation that’s more than $US14 million per effective megawatt, and you’ve got fuel costs on top of that.

By comparison a wind farm assuming 40 per cent utilisation (what newly constructed wind farms in Australia can achieve) comes in at $US5 million or so per effective megawatt with no fuel cost. Also, it can be built in one year instead of four or five, with that saving in construction time adding up to lot of avoided bank loan interest which weighs on the clean coal project.

In the budget the government cut $459.3m over three years from its carbon capture and storage flagship program, leaving $191.7m to continue existing projects for the next seven years, so one wonders just how serious they are about it.

If the government sticks to its suggested (but not confirmed) budget of $4.95 billion up to 2020, they can only afford to spend an average of $11.75 per tonne of CO2. At that price they may achieve a few million tonnes of abatement, but leading carbon market analysts and brokers including Bloomberg New Energy Finance, SKM-MMA and RepuTex suggest that the government has Buckley’s chance of reaching its target of 421 million tonnes with the allocated budget.

At the start of his prime ministership Tony Abbott said, “We hope to be judged by what we have done rather than by what we have said we would do.”

Rest assured Tony, the whole world is judging these actions.

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25 comments

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  1. Matters Not

    Great article Kaye. But bedtime prevents further comment ’till the morrow.

    But if you’re interested in further insights can I suggest this site,

    http://www.climateplus.info/

  2. Florence nee Fedup

    Hunt keeps saying CEF did not work. What does he based this on. Keeps saying it was an electricity tax. False, it was not. It was a cost on emissions. How does one debate with Hunt, when he either does not understand CEF or bases his discourse on false assumptions.

  3. Kaye Lee

    The directions statement, marked commercial-in-confidence, says as research and development in unconventional gas – such as coal seam and shale gas – has the potential to ‘‘create significant value for our nation’’ CSIRO will grow research in the area. It will also implement its new mining strategy focusing on activities ‘‘that help to significantly enhance the productivity of this vital sector.’’

    But elsewhere in low emissions energy technologies: ‘‘To adjust to the more difficult operating environment, we will stop our geothermal work and reduce other activities, especially in CO2 capture and efficient energy management.’’

    Read more: http://www.smh.com.au/federal-politics/political-news/csiro-closes-sites-and-cuts-research-as-result-of-budget-20140527-392ba.html#ixzz3IOAaMcHi

  4. Jason

    The bastardisation of CSIRO is going to result in a fairly costly repair job some time down the track. Like most things with the Abbott government it is going to cost Australia dearly to fix up the slash and burn agenda.

    It’ll be interesting to see how the climate stuff plays out at the G20. What I find baffling about the Abbott government is they seem that short-sighted they don’t appear to have considered that major countries such as USA, UK, China, France, Germany, etc, will insist that Australia does more. Hunt is talking about targets that are simply going to get blown out of the water by far more urgent and greater demands. The word coming out of the UN and the IPCC report would suggest that Australia should be doing more – much more – to transition its energy generation away from coal.

    Greg Hunt is starting to remind me of the Alec Guinness character in ‘The Bridge on the River Kwai’. Happily deluded and determinedly insane in the face of reality. Stark, raving, mad.

  5. Shevill Mathers

    Jason, your last para sums it up very well and I echo your sentiments.
    Regrettably, “Direct Inaction” will cost us dearly, and the next government will be faced with the task of rectifying all these bad decisions. Meanwhile we are going backwards at warp speed, which is costing us dearly in wasted taxpayer dollars and planet degradation.

  6. Loz

    Why are we putting up with a government that is going to send us bankrupt?

  7. Kaye Lee

    Back when the Coalition was in opposition, a former senior party adviser, chortling at the incongruous nature of the fight over climate change, couldn’t help himself.

    “You know what the main difference is between us?” he asked. “The (Labor) government wants to take money from polluters and give it to taxpayers while the Coalition wants to take money from taxpayers and give it to polluters.”

    http://www.abc.net.au/news/2014-11-03/verrender-the-direct-action-assault-on-free-market-thinking/5861522

  8. Kaye Lee

    Geoffrey Cousins is the new president of ACF. He is all over the news, criticising the Abbott government in uncompromising terms over its Direct Action policy, which he characterises as a $2.5 billion act of corporate welfare disguised as a carbon reduction scheme.

    “For the minister, Hunt, to come out a day after the IPCC report and say ‘this is in line with what we’re doing’ is outrageous. There is a difference between spin and misinformation, untruths.

    “There you have Ban Ki-moon saying the world must not be relying on coal in any major way by 2050 and you’ve got the prime minister of Australia saying coal is our future.”

    “If you look at the major energy companies, most are running ad campaigns of one kind or another proudly stating how they’re moving to renewables. You can get into a lot of trouble under Australian corporate governance rules for making a set of statements in one place and doing something different somewhere else.

    “The notable thing about corporate life in Australia is that the same people tend to appear on different boards. It’s very interesting that in one place they might be representing one thing and in another place something quite different.”

    http://www.thesaturdaypaper.com.au/news/politics/2014/11/08/who-running-green-politics/14153652001221#.VF1IMDccRjq

  9. stephentardrew

    This whole mess is reinforced by magical thinking. Marx developed a sound empirically based critique of economic power held by a bunch of irrational self-serving elites however he missed the fact that many ordinary people, given the chance, would similarly be despotic rulers as per Stalin and his henchmen. Progressives often reflect upon the correlation between Nazism and conservatism however I think the likes of Hunt belong to a different order of irrationality verging on truly mentally disturbed borderline personalities. Point is it doesn’t take a lot to tip borderline personalities over the edge into full blown fanaticism and unbridled oligarchic fascism. There is more than one variety of despotic rule.

    The other issue is that we have many people justifying irrationality while saying their ideology is better than your ideology by degree even though both are leading to disaster and intolerable suffering. The urge to defend the indefensible requires the type of energy needed to challenge oligarchy and so the forces of change are undermined by the same magical and mythical thinking that guides the forces of greed. Progressives need to clean up their own house first. It seems that the boundaries around acceptable behavior and belief are much too loose due to irrational belief in free speech and the human “right” to be irrational self-serving utter bastards. In point of fact the underlying principles of democracy are being distorted by magical and mythical thinking without recourse to the hard headed facts. Admittedly it is not possible to separate fact from opinion however opinion should relate to demonstrable facts in the wold.

    The universe is underscored by tightly constrained fundamental laws and constants that lead to a sustainable universe of duration and increasing complexity. It is actually the rules that constrain and maintain existence and it is no different for sentient beings operating in the world. I know I often go on about fact based rational material reality, and subjectively driven personal opinion which arises when degrees of complexity allow us to self-refer, however we ignore the necessity for constraining laws that can help to prevent dysfunctional self-destructive behaviour and irrationality at our cost. The fissue is free will and personal responsibility are far overrated when they ignore fundamental facts for so called personal freedoms which are in effect group think free-for-all based upon magical and mythical thinking. When personal freedom leads to cruelty injustice and self-destruction it is time to revisit the rule of law based upon material facts while freeing up peoples identities to operate unhindered in subjective space while, contemporaneously, being guided by foundational scientific and engineering facts in material reality.

    I don’t claim to have all the answers however unless we ask the right questions it is just more of the same left and right. That someone like Hunt and the LNP front bench could gain so much power and influence based upon dogma and ignorance is a blight upon rational thinking and rule based empirical and scientific accountability. Progressive must apply themselves to the constraining laws and facts of material reality while separating out their metaphysical prejudices from those facts. We irrationally conflate subjective freedom with a very tightly bound and constrained material reality. If we don’t get the factual laws right then we have little hope of building a sustainable world fit for all based upon justice and equity.

    In this respect we all have to rethink our prejudices and entrenched beliefs.

  10. guest

    The really amazing thing in this debate about Climate Change is the way the Murdoch press publishes denialist propaganda of the Newman/Bolt/Kenny kind, which contradicts any attempts by the Coalition to do anything at all about carbon emissions.

    The arguments about Climate Change in the Murdoch la-la land are based on some outdated economic parameters. They offer no science. Economics trumps science, apparently.

  11. Matters Not

    he missed the fact that many ordinary people, given the chance, would similarly be despotic rulers

    Nevertheless, later Marxists such as Paulo Freire were very much aware of that ‘problem’. Freire spoke in terms of ‘existential duality’. The oppressed get their ‘model of manhood’ from the oppressors. From his writings:

    “The oppressed, instead of striving for liberation, tend themselves to become oppressors”

    Further:

    “The oppressed find in the oppressors their model of ‘manhood.”

    “The behavior of the oppressed is a prescribed behavior, following as it does the guidelines of the oppressor.”

  12. townsvilleblog

    I am continuously baffled as to why the general public do not see through the LNP mantra’s I understand that the way they twist the message as though it was beneficial to the community while being directly the opposite in effect, what I fail to understand is why the elected opposition including the greens do not translate, as you do Kaye, and inform the community as to what is really happening. Your journalism is much looked forward to by me and I always post your articles to my facebook page to give them as much exposure as I possibly can. Keep up the great work mate.

  13. diannaart

    Abbott government still convinced that ‘cleaning up coal’ is better than transition to renewables…who-da thunk it?

  14. stephentardrew

    Agreed Matters Not but who bothers reading post Marxian Marxist. It has been so vilified that generally just to use Marx’s name puts you in the basket of the mentally challenged evil communist rather than a inquiring lateral thinkers. There is actually a grand tradition of non-dualism East and West (Kant phenomena noumenon and antimonies and Nagarjuna no-thingness, sunyata). Conformity is the main game LNP and Labor. They just don’t like someone rocking the habituated traditionalist boat.

    Gough who?

    Lotsa flag waving and little, to no, action.

    It seems ignorance is justifiable to the ignorant.

    Too damn obvious that.

  15. Anomander

    Hmmm… a sudden and quite large increase in emissions after the canning of the carbon tax was destroyed.

    So, let me get this straight…. Direct Action pays polluters to reduce emissions.

    Company X bids for funding to reduce emissions below their current (artificially elevated) target.

    Company X reverts back to previous activities and pockets a nice little earner into the bargain, courtesy of their Liberal mates and the feckless Australian populace.

  16. Keith

    A number of scientists were asked what they feel about climate change. They were asked to hand write their responses. The themes going through the letters are anxiety for the future, anger about how science is being ignored,the greed that is stopping action from taking place, worry about what is to become of their children and grandchildren, and some provided a glimmer of hope should action be taken now.

    http://isthishowyoufeel.weebly.com/this-is-how-scientists-feel.html

    From the same source : http://forum.arctic-sea-ice.net/index.php/topic,179.450.html….. a more philosophical/ethical reference was provided.

    http://grist.org/climate-energy/how-climate-change-is-like-street-harassment/

    Direct Action is designed more as a mates hand out policy at the expense of taxpayers. The 5% reduction in emissions is a feeble attempt to try and show that the abbott gang are doing something about climate change. The Climate Change Authority have indicated that emissions must be reduced by a far greater factor.

  17. Florence nee Fedup

    DA was grabbed by Abbott as a let out action re so called carbon tax He does not care if it works o not. As for Hunt I am not so sure. I believe he might have convicted himself it might.

    Personally I think there plenty of time before the next election, to know if it delivers or not. Emissions already climbing.

  18. Billy muddle moir

    It is great to read arguments backed by facts and examples. How such arguments are disseminated, past the logic of hunt’s third thing of the two things he must do in his job, is a difficult task. To respond to ‘the challenge’, as he understands climate change, he must be sensible enough to be able to express the challenge in slogans, prudent enough as to appear active, honest and wise by hiding (disguising?) the payments to the polluters. Ending with photo opportunities proving the worth of the rabbott’s ‘real’ approach not some theoretical science mumbo jumbo. No need for facts or understanding when reality serves the purpose.

  19. Möbius Ecko

    “The 5% reduction in emissions is a feeble attempt to try and show that the abbott gang are doing something about climate change. The Climate Change Authority have indicated that emissions must be reduced by a far greater factor.”

    That 5% is pie-in-the-sky as well. Estimates put the current government DAP spend achieving around a 3% reduction with several billion more dollars required to achieve 5%. Also the 5% pie-in-the-sky target is predicated on some very dodgy notions of Australia solving CCS where the rest of the world has so far failed and being able to plant massive numbers of trees in marginal or unfertile soils.

    That doesn’t take into account that this government should have already started the implementation of DAP almost from the moment they won government, so are now a year+ behind.

    As Turnbull honestly opined, DAP is a Clayton’s policy, the climate policy you have when you don’t want a climate policy.

  20. Kaye Lee

    To make serious reductions in coal-fired power greenhouse emissions, carbon capture and storage is required. The capacity for carbon capture and storage is low – only 13 projects are operational worldwide, sequestering only 25 million tonnes of carbon dioxide per year, or less than one-10th of 1 per cent (0.07 per cent) of the world’s total 33,376 million tonnes of emissions each year.

    http://www.businessspectator.com.au/article/2014/11/7/policy-politics/coal-companies-talking-rubbish-energy-poverty?utm_source=exact&utm_medium=email&utm_content=992162&utm_campaign=kgb&modapt

  21. Jeffp

    I think what we need to do is concede to oligarchy, that’s what they need. There will always be that hierarchical order,of neo-feudal overlords, in the human sphere and to move on.
    I think it easier collaborating with them and transmute their power.
    I think this is entirely possible with the fuel industry, for transport, from fossil fuel over to electric ‘fuel’, opening up massive markets.
    The coal industry is tricky, how to move that over to a clean industry and keep the oligarchs happy?

  22. Pappinbarra Fox

    Evil Marxists eh?

    Why don’ commenters call direct action for what it is – command and control – a descriptor of communist economic processes and roundly condemned by right wing market governments everywhere. In fact those same governments came up with the market system ie a price on carbon and Carbon trading permits that this Abbott government ridiculed when Gillard adopted it. Now they are using and crowing about a command and control system that failed gloriously in the soviet bloc.

    So Abbott and his colleagues are evil communists.

  23. Jeffp

    As your foxy avatar suggests,
    woudnt be suprised if you were a misinformant stooge, for Murdoch,
    as DA is so far removed from an action that would have been taken under communism, the political underdog, fall guy, for the right.

    The miners of the IPA installed the LNP so it’s corporate fascist control as usual.

  24. diannaart

    Jeffp

    If you take the ends of Fascism and Communism to their extremes they meet each other – like a big circle.

  25. Jeffp

    So we’ve been informed and if that is the case, why not call it for what it is, a corporate controlled scam.

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