Australia climate plan needs strong rules to boost bite: Report

Australia climate plan needs strong rules to boost bite: Report

MELBOURNE - Australia's new climate plan would cut less than 60 per cent of greenhouse gas emissions needed to meet its 2020 target, while the omission of more stringent rules would reduce this to below 30 per cent, a new report said on Tuesday.

The conservative Abbott government plans to replace the previous Labor government's carbon pricing policy with an Emissions Reduction Fund (ERF), under which it would pay emitters to stay below a government-defined emissions baseline.

Some of the more stringent elements proposed in a December Green Paper on the proposed fund could vastly improve the efficiency of the scheme, Melbourne-based carbon research and advisory firm RepuTex said.

Australia aims to reduce greenhouse gas emissions to 5 per cent below 2000 levels by 2020, a target that requires a cut of 431 million tonnes of CO2 between now and 2020.

Australia could cut domestic emissions by 243 million tonnes under the new Direct Action plan, which the government hopes to adopt by mid-year, if it includes absolute baselines for emitters and penalties for those who fail to meet them, RepuTex said.

Absolute baselines would specify how much CO2 facilities in each sector could emit per unit of production, and force those that emit above that limit to offset or compensate for missing the target.

"Should the government introduce a secondary market for companies to trade offsets to maintain their emissions at required levels, Direct Action could achieve significant domestic emissions reductions," RepuTex executive director Hugh Grossman said.

But without those measures, Australia would only cut emissions by around 123 million tonnes, the firm said.

And if the government gave in to pressure from the energy industry to exempt it from the scheme altogether, Australia's emissions would rise by the end of the decade, the report said.

The final look of the ERF remains unclear, and the government will accept public comments on it until Feb. 21.

Australia has had a fixed price on carbon emissions from 380 of the nation's biggest emitters since mid-2012, which the previous Labor government intended to turn into an emissions trading scheme in 2015.

The Labor policy would also miss Australia's emissions target, RepuTex said, but would make up for the shortfall by buying offset credits from abroad, something the current government has refused to do.

Prime Minister Tony Abbott's conservative Coalition, which came into office last September, hopes to have its new policy in place by July 1, but the Labor-Greens majority in the Senate has blocked the carbon price repeal legislation.

The power of balance in the Senate shifts in July, and the government is expected to push through its new climate policy shortly after.

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