Media paying attention to Julia's 'Don't write crap' advice?
A close look at Abbott's Direct Action plan
Ben Eltham
Source
Going by the opinion polls just now, it can't get much worse for Labor.
Twenty-two points down in the latest Nielsen poll isn't just bad. It's catastrophic. An election held this weekend would wipe Labor off the map in Queensland and Western Australia. The Coalition would end up with a massive majority and control of the Senate to boot.
The next election will not be until 2013, barring misfortune or worse. But let's give these polls their due for a second. What if Kevin Rudd's aortic valve gave out this weekend, and the Government of Julia Gillard fell?
What exactly are the policies of the Coalition, and would they work? After all, there's been plenty of media scrutiny of the Government's carbon tax. There's been precious little on the Opposition's own carbon policy, which it calls "Direct Action", or the many sweeping statements on climate change and the carbon tax by Tony Abbott.
On Monday night on the ABC's PM program, Stephen Long finally examined some of Tony Abbott's claims. In a stunning piece of forensic investigation, Long single-handedly dismantled the distortions, misrepresentations and bald-faced lies that Tony Abbott continues to advance.
"Full credit to the Opposition Leader's political skill," Long said in his report.
"But he's been aided and abetted by journalists who've continued to report unchallenged claims that appear to contradict facts."
Long singled out Tony Abbott's claims that the carbon tax would be "toxic" for the economy, and that it would shut down the coal industry. There is no factual basis for either argument. According to Long, "every credible analysis including the industry's own says the coal industry is going to enjoy a massive expansion despite the Government's carbon price."
But almost no-one in the mainstream media has bothered to hold Tony Abbott to account. Just to take one example, let's examine Abbott's argument, repeated a number of times, that Australia will be "going it alone" in introducing a price on carbon. It's hard to understand how this argument was ever accepted by anyone. The European Union has had an emissions trading scheme since 2005, whatever its manifest flaws. India has introduced a tax on coal. China has recently announced it will launch a pilot program for emissions trading in the next five years. California, the world's eighth-largest economy, has an emissions trading scheme at a state level, which will soon be linked to the European scheme.
To say some sections of the Australian media are against the carbon tax is something of an understatement. As Jonathan Holmes pointed out this week on Media Watch, some parts of the talk-back radio sector are spewing out hatred against the Prime Minister that is nothing short of sexual vilification. The anti-carbon tax campaign from the Murdoch tabloids is unbalanced in a different way, cooly and calculatingly mispresenting the factual basis of climate change and the details of the carbon tax for reasons of cynical political animus.
So let's exert some scrutiny on Tony Abbott and the Coalition. What is 'Direct Action'? What does it promise? Will it work?
This is the Coalition's Direct Action Plan. It promises to "reduce CO2 emissions by 5 per cent by 2020 based on 1990 levels."
Several gaffes by Abbott this week suggests any Coalition commitment to the 5 per cent target should be considered highly conditional, to be charitable. But even if we believe the Opposition that it remains committed to the 5 per cent target, can Direct Action deliver that?
Despite the rhetoric, Direct Action contains much that is similar to the Government's carbon policy eventually agreed with the Greens and independents. Like the Government's policy, it will spend billions on retiring dirty power plants in the La Trobe valley like Hazelwood. Like the Government's plan, Direct Action promises to invest in clean tech and renewable energy. And, believe it or not, Direct Action also promises to establish a form of carbon pricing.
Unlike the Government's scheme, however, it will not cap Australia's carbon emissions, it will not allow carbon pollution credits to be traded on a market, and it will not charge polluters for their emissions.
Instead, the Coalition plans to tackle carbon emissions by paying industry to pollute less, through an Emissions Reduction Fund. As the Direct Action policy document states:
The Fund will commence operation in 2011-12 with an initial allocation of $300 million, increasing to $500 million in 2012-13, $750 million in 2013-14 and $1 billion by 2014-15. It is envisaged that the Fund will invest an annual average of around $1.2 billion in direct CO2 emissions reduction activities through to 2020.
The Coalition will also spend another billion or so on policies such as its $400 million "one million solar roofs" program.
Totalling those numbers up gives a total spend of $9.22 billion out to 2020. Showing typically fuzzy accounting values, the Coalition has also said it will cap the cost of the program at $10.5 billion out to 2020. That's money that the Coalition says will come from "normal budget processes", which means either more tax, more borrowing, or spending cuts. Tony Abbott and Joe Hockey have already promised that money will not come from extra taxes. That means an incoming Abbott government has committed to more than $10 billion in spending cuts in order to pay for its carbon policies.
Where will the carbon reductions come from? The Coalition says the majority will come from soil carbon. Soil carbon is a promising technology being investigated by a number of countries. An Abbott government plans to pay farmers $8-10 for each tonne of carbon they can lock up in their soil. As a result, the Coalition says 85 million tonnes of carbon emissions can be abated.
The problem is, the technology is not proven yet. Even if the Government spends billions, we don't really know how much carbon we can sequester. According to a comprehensive scientific review of soil carbon technology by the CSIRO last year, "a general lack of research in this area is currently preventing a more quantitative assessment of the carbon sequestration potential of agricultural soils".
The conclusions of the CSIRO report are worth reporting at length:
When [soil carbon] stocks were followed through time, the majority of studies indicated that there was an actual decrease in the quantity of carbon stored in the soil. These seemingly contradictory results suggest that much of Australia's agricultural soils may still be responding to initial land clearing and that many management improvements are just slowing the rate of loss [soil carbon]... it may be extremely difficult to project these findings out into the future where the soil carbon condition is unknown.
In other words: the CSIRO's soil carbon trials actually showed a decrease in the amount of carbon stored in the soil! Not only this, but the report says it is "extremely difficult" to predict whether soil carbon farming practices will work in the future.
Measuring soil carbon across an entire continent isn't easy either. According to the CSIRO report, "accurate monitoring and verification of soil carbon stock changes, due to the large and heterogeneous background levels are difficult and often prohibitively expensive" But the Coalition's policy doesn't explain how it will measure soil carbon, or advance any costings that explain the expense of measuring soil carbon.
Many farmers are already arguing that $8-10 a tonne is far too low. Michael Kiely of the Carbon Coalition, who was cited by the Opposition when they first released their policy, says that the price paid to farmers would need to "start at $25 and head north."
In other words, the Coalition is basing 60 per cent of its Direct Action policy on a technology that the CSIRO says it can't predict will work, and can't measure adequately either.
The story of the Canadian government's forestry policy shows what can go wrong when natural systems are used as climate policy instruments.
In 2002, Canada announced that it planned to rely on tree planting and improved forestry practices to achieve one-third of its Kyoto emissions reduction targets. This didn't happen. Instead, huge swathes of forest died, due to catastrophic infestations of the Mountain Pine Beetle. As a result, Canadian forest scientists estimate that Canada's forests went from a source of carbon reduction to a source of carbon emissions.
What caused the Mountain Pine Beetle infestation? Scientists believe it was in part climate change itself. Cold winters normally kill off Mountain Pine Beetles in large numbers, but as winters warm in the North American forests, fewer beetles are dying.
Leaving aside soil carbon, the second-biggest source of the Coalition's planned carbon abatement is energy efficiency and green building standards. The Direct Action policy promises a total of "20-30 million tonnes" of carbon emissions reductions by 2020 through this mechanism.
Direct Action is amazingly sketchy on how this will be achieved. It devotes all of two sentences to this aspect of its policy:
[A] Coalition Government will work with a range of industry groups including the Clean Energy Council, the Energy Efficiency Council, the Green Buildings Council and the Property Council to develop complementary energy efficiency measures.
The mechanism appears to be payments to developers through "a CO2 abatement price of $15 per tonne.
Can these payments by the government actually achieve a 5 per cent cut in Australian greenhouse gas emissions out to 2020? Nearly every credible analyst says no. The Australia Institute's Richard Denniss and Matt Grudnoff have performed the most substantial analysis of Direct Action. They conclude that Direct Action will cost taxpayers $11 billion a year, require a thicket of new regulations and hundreds of new bureaucrats to enforce them.
The Treasury agrees. In its Red Book briefing for the incoming government, the Treasury stated bluntly that when it comes to cutting carbon emissions, "direct action initiatives alone will not do the job." Its Blue Book, prepared for the Coalition should it have won government, was even blunter. "A broad based market mechanism which prices carbon," Treasury wrote, "...is the only realistic way of achieving the deep cuts in emissions that are required."
Direct Action is ultimately a competitive grants scheme essentially identical to "cash for clunkers" and other expensive and ineffective government spending programs to reduce emissions that have already failed under the Howard, Rudd and Gillard governments - as the Australian National Audit Office and the Grattan Institute have both found. Like these programs, Direct Action is likely to achieve any emissions reductions at an exorbitant cost. One million solar roofs, for instance, will cost $133 for every tonne of carbon it abates.
If you stop to think about it for a minute, it's obvious that Direct Action won't work. It doesn't introduce a proper market mechanism for carbon abatement. It doesn't seek to cap Australia's carbon emissions. The odds are against it, even before we examine the depth of the Coalition's actual commitment to addressing climate change. No wonder Tony Abbott can't find any economists or climate scientists prepared to support it.
The take-home message is simple. The Coalition's plan is based on incomplete science, dubious economics and breath-taking political expediency. It will be hugely expensive. It won't cut carbon emissions. It won't even lead to lower taxes. And it will still introduce a shadow price for carbon.
)
also works for 2GB ..... 
