Report blasts Abbott climate plan - Policy would cost twice as much

Age
Wednesday 10/2/2010 Page: 13

THE Coalition's climate change policy would cost taxpayers more than twice as much as the government's emissions trading scheme, an analysis has found. A report by carbon market analysts at Bloomberg New Energy Finance said the government's scheme would cost the budget $1.5 billion over the first four years - less than the $3.4 billion of the emissions reduction fund proposed by Opposition Leader Tony Abbott. It said the Coalitions claim that the government scheme would cost $40.6 billion was based on a "strange logic" that confused its market value with its cost to taxpayers. The opposition needed "to come up with something better and get the numbers right", it said.

It said Mr Abbott's proposal - allowing businesses and farmers to apply to have the government pay for their greenhouse gas emissions cuts from a fund eventually worth $1 billion a year - failed on three fronts: it was not the cheapest way to cut emissions, could not accurately limit national emissions and was a short-term option only. The government's scheme "has limitations", but was considered more cost effective because it was a market-based system with penalties to force businesses to find the cheapest cuts. "It is not our place to take sides in politics, but we do question the willingness of taxpayers to fund the entire cost of reducing emissions under [the opposition's proposals]," the report said.

The criticisms of the opposition plan echo those of former leader Malcolm Turnbull, who has vowed to cross the floor to vote for the government's scheme. But the analysis does not cover the Coalitions main attack on the government scheme - that it is a "great big tax on everything" that will be felt through increased food and electricity bills. The government says 92% of households will be at least partially compensated.

The opposition plan has been backed by energy company TRUEnergy, which runs the Yallourn brown coal-fired power station. TRUEnergy managing director Richard Mclndoe said it supported emissions trading, but not the scheme proposed by the government and not before a substantial global climate deal. He said the opposition's "direct-action" policy could lead to coal-fired power stations closing within a decade if the owners' successfully applied to the emissions fund.

Clean energy group the Alternative Technology Association criticised the Coalition plan as a potential killer of large-scale renewable energy. The opposition proposal includes an additional $1000 rebate for rooftop solar panels and solar hot water systems. But the association's Damien Moyse said incentives for household solar systems connected to the government's renewable energy target were already stopping large-scale wind and solar projects from going ahead. He said the Coalition proposal would exacerbate the problem and "put the final nail in the renewable energy industry's coffin'.