Tony Abbott delivers the his vision of how to achieve carbon reduction in Australia
Abbott?s policy can be broadly divided into two components:
Setting a goal of reducing Australia?s carbon emissions by 5 per cent by the year 2020;
Setting up an Emissions Reduction Fund worth around $10 billion over ten years to fund sustainability, in particular research into soil carbon, investment into solar energy for households and the re-establishment of ?green corridors? by planting around 20 million trees; and
Rewarding polluting companies for cutting their carbon emissions levels; and penalising them if they should increase.
In response to the target of reducing emissions by 5 per cent, Dr Helen McGregor at University of Wollongong believes “Cuts to emissions of far greater than 5% by 2020 are required to tackle the climate change issue – this policy does not appear to have any long term plans for deeper cuts into the future.”
Of the scientific focus on soil carbon and solar energy, Professor John Quiggin from the University of Queensland has commented that ?The Liberal Party plan relies primarily on wishful thinking about the potential for near-costless gains from soil carbon. In the absence of adequate accounting systems, this proposal is vulnerable to massive rorting. The rest of the proposal consists if picking winners that seem likely to appeal to focus groups, rather than providing incentives to find the most cost-effective ways of reducing and offsetting carbon emissions. Taken as a whole, the package and its costings lack credibility.?
In regards to the reward/penalty system, Professor John Foster from School of Economics at the University of Queensland believes ?Any policy that does not penalise ?base line? growth in emissions by firms and does not have a cap is very unlikely to achieve a 5% reduction target by 2020.?
Professor Peter Kenyon, a Professor of Economic Policy at Curtin University, compares Rudd?s ETS and Abbott?s alternative to the ?stick and carrot? approach: ?Both approaches will deliver emissions reduction. So the question is what?s the best way? There are two reasons to favour the Emissions Trading route. First, recent research in behavioural economics reinforces the theory that price rises will change behaviour more quickly and thoroughly than subsidies. Just think of speeding reduction for a minute. Would speeding on the roads be less if drivers were to be subsidised to reduce speeding? It sounds like a great idea – until you are in a hurry! A speeding fine, however, is likely to be far more persuasive.Secondly, subsidies have to be paid for. Under a subsidy approach, it might appear that the government is giving money away to be cleaner and greener. But where does the money come from? It has to come from us, the taxpayers. The government is not a magic pudding. As Nobel Prize winning economist, Milton Friedman used to say ?There is no such thing as a free lunch.? It will cost citizens at least as much as an equivalently effective Emissions Trading Scheme. The Liberals have costed their scheme at $3.2b over four years, a cost that will be borne by taxpayers. An ETS will cost considerably more and is almost certain to deliver greater emissions reduction per dollar cost. The real question is, therefore, how much are we willing to pay to change our behaviour and what will be the greatest ?bang for our buck? in terms of emissions reduction? My bet is on an ETS.?
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