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Feb 26, 2013

The evolution of 'Direct Action': soil magic to magic pudding

The Coalition's absurd Direct Action climate policy, always grossly underfunded, will now have to provide compensation for firms after the repeal of the carbon price as well. It's not affordable.


For the first three years of its life, the Coalition’s climate action policy, “Direct Action”, merely didn’t add up. Now it has turned into a magic pudding.

“Direct Action” was released in early 2010 after being cobbled together by Greg Hunt over the previous summer following the Abbott putsch that knocked off Malcolm Turnbull. Structured around a massive grants program for big polluters and farmers, the proposal relied heavily on biosequestration via soil carbon, or what Lenore Taylor — who has played a lone hand in comprehensively demonstrating the absurdities of the policy — called “soil magic”.

Now, after Joe Hockey said the program would also be the source of compensation funds for companies out of pocket after the repeal of the carbon price, it’s become the magic pudding.

The policy itself is grossly underfunded for what it is proposed to achieve — a 5% cut in emissions by 2020. Originally costed at $1.2 billion per annum or around $10 billion to 2020, it relies, according to the Coalition’s own policy document, on 60% of its carbon abatement task being achieved via soil magic for $8-10 a tonne, and the rest delivered at higher prices, for an average cost of around $11 a tonne.

As Crikey pointed out, when the policy was released, independent experts estimated soil carbon at more like $20-40 a tonne. Hunt has gamely held out against reality since releasing the policy, but in 2011 he admitted the average price of abatement would be $15 a tonne, not $11, although where the additional 30% cost of the program was coming from wasn’t explained. Then, in August 2011, Hunt was humiliated when, on a visit to a Woorndoo farm to promote the policy, the farm owner, who had already undertaken soil carbon initiatives off his own bat, said that the Coalition’s scheme wouldn’t provide enough incentive for farmers.

As Malcolm Turnbull pointed out in 2011, Direct Action was the sort of policy that climate denialists could embrace because it could be dumped quickly. And, as Turnbull added, it would become a very significant cost to the budget in the future. As Treasury explained in its election briefing on the policy, the policy was unlikely to be able to deliver the target level of abatement without a significant increase in costs. Experience of Direct Action-style carbon abatement grants programs under the Howard and Rudd governments was that they delivered abatement for an average of $168 a tonne.

The government later released a costing suggesting Direct Action would need three times its forecast funding out to 2020, or around $30 billion. The Australia Institute suggested the cost would be more like $11 billion per annum, and noted the policy had no provision for the large number of public servants who would be needed to administer a multibillion-dollar grants program.

Now Joe Hockey has loaded another cost onto the program, saying it would be used to provide compensation for companies caught short by the repeal of the carbon price. That’s the compensation Hunt said in 2011 simply wouldn’t exist: “There is no need for or risk of compensation by abolishing the tax.”


Hockey’s problem is that, once he’s treasurer, all this Monopoly money stuff becomes a real problem. Direct Action is a fiscal or environmental disaster waiting to happen; either the Coalition pretends that it is on track to achieve 5% emissions reductions as long as it can and then hopes voters don’t care when the reality of Australia’s rising emissions is demonstrated, or Hockey has to find at least a couple of billion dollars a year to get the program working in a way that stands a chance of reaching the 5% target.

The “case-by-case” compensation will only make that problem more acute, by at least hundreds of millions of dollars and possibly by billions.

In short, Hockey has to either admit the 5% emissions reduction target is unobtainable, or admit he needs a couple of billion a year from somewhere to fix a manifestly flawed program. He can pretend everything is fine only until he’s in office. All the magic in the world won’t help.


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21 thoughts on “The evolution of ‘Direct Action’: soil magic to magic pudding

  1. Terrence John Snedden

    Tony Abbott intends to repeal taxes on polluting industries and handover funds drawn from the pay checks of hardworking Australians to those very same companies. Is blaming everything on Julia blinding us to our own interests and opening the door again to the merchants of greed?

  2. Holden Back

    As much as it fills me with horror that this undeserving rabble are about to be elected, there’s a deep, anticipatory Schadenfreude waiting to see what happens when this program becomes ‘too difficult’ and the boats fail to cease coming.

    Of course they will be held to account by the News Ltd papers. What?

  3. z craig

    Perhaps there should be a media-initiated campaign to hold the greens in the senate, by which the parliament would be truly locked against say removing a carbon tax, but not say an emmissions trading scheme, which is conceivable under a coalition, although difficult to perceive now. Wny? Because the People rule in democracies. Corporate ideas about what is useful or othewise (for example removing carbon pricing) to them are not really the majority of people’s views, and parties should govern for voters, not companies.

  4. GLJ

    Come on guys. Lighten up. Its a great name. DIRECT ACTION. Its a product of DIRECT ACTION MAN himself. And youse have to go and wreck it by asking all those petty questions and doing all those dumb sums and things and quoting Joe and Hunty. Man give us a break and just dig the headlines . DIRECT ACTION. You gotta love that. Its soooo direct and action like.

  5. Milanion20

    Z Craig, the only media-initiated campaign going around is the one that supports the Coalition’s plan to remove the carbon price and pay compensation.

  6. Milanion20

    Anyway it doesn’t matter what any of the politicians do. The carbon price/tax/loading/duty/contribution will be determined by actuaries who will cause it to be loaded into premiums and asset purchasers who will demand discounts for anything that isn’t coloured green and/or safely above the high-water mark.

  7. klewso

    This is the sought of syants that appeels to Limited Gnus.

  8. Electric Lardyland

    I’ve always thought that the coalition’s ‘direct action’ plan, was modelled on their ‘direct election model’ for the republic. That is, it’s an issue that most of them have no intention of acting on, but they need an alternative proposal, to con the electorate with, until the heat dies down.
    Unfortunately, with climate change, the heat is unlikely to die down.
    And I do think that Abbott is still a climate change denier at heart, but no longer has the courage, or honesty, to say so. Which makes his carbon tax schtick of, ‘she lied, she lied, she lied to all of us!’ even more obnoxious.

  9. Andybob

    Complaining that Joe hasn’t clarified the circumstances under which compensation could be claimed and for how much feels like complaining that the top curl of a particularly pungent dog turd is a bit smelly.


    The very same media that went feral over “pink batts” and the BER will no doubt point out the flaws in this “Direct Action” stunt?


    Oh well…

  11. Achmed

    A vote for the Liberals is a vote for increased taxation. Abbott will repeal the tax cuts and compensation under the current carbon price, increase business tax to pay for maternity leave and give polluters taxpayer money that will somehow magically appear in the budget

  12. iggy648

    Greenhouse gas emissions have been coming down since 2009. (Google CEDEX). Greg Hunt on Q&A revealed that he wasn’t aware of this. You have to wonder what a Shadow Minister for the Environment does for a living. This is up there with a Shadow Treasurer who can’t read a power bill.

  13. Steve777

    ‘Direct Action’ was only ever a figleaf to cover the Coalition’s division over Climate Change after they reneged on the deal they struck with the Government over the ETS. Its purpose was to give the appearance that they would do something about carbon emissions at a time when public concern about the issue was much higher than it is today. However, the Coalition never talks about Direct Action or tries to argue its superiority to an ETS / Carbon price. It hardly got a mention in the 2010 Federal election campaign. In fact many Coalition supporters must wonder why Abbott PM and company are ostensibly planning to spend $10 billion on a problem most of them don’t believe exists. Expect both ‘Direct Inaction’ and the 5% emission reduction target to be quietly dropped when Abbott becomes PM.

  14. Steve777

    In fact, expect an announcement in October that ‘Direct Action’ will be ‘deferred’ because of an alleged ‘black hole’ that an incoming Coalition will (surprise, surprise) find. After that, ‘Direct Action’ will never be mentioned again, rather like that assembly of 150 citizens that was proposed by Julia Gillard before the 2010 election. Australia will withdraw from meaningful efforts to tackle Global Warming and go back to join the USA in playing a ‘spoiler role’ in international efforts to address the problem.

  15. CML

    Heard on ABC radio in Adelaide this morning that Greg Hunt was asked about compensation for companies when the carbon tax is abolished, and he said that Joe’s statement about this was “misunderstood”. There will be no compensation for companies “out of pocket”. That’s what Hunt said!

  16. BSA Bob

    I agree with those who say Direct Action won’t happen because it was never meant to. A black hole or something will be discovered. It’s very bitterness inducing to think that Abbott will probably get away with this on both fronts. His supporters will gleefully discard the whole thing while those concerned by climate change won’t criticise much because the “plan”‘s not worth implementing anyway.

    Holden Back
    For the sort of person who thinks that since Mt Vesuvius just erupted they might as well pop outside for a look, this Abbott thing could be an interesting ride.

  17. Gavin Moodie

    ‘Direct Action’ is the bimonthly paper of the Revolutionary Socialist Party, PO box 69, Glebe, NSW 2037.


  18. Iskandar

    Though touted as a Rhodes scholar it seems Tony Abbott studied only boxing. Had he dipped into the sciences, you know, physics, chemistry, geology and of course mathematics, perhaps his perspective might have been a little different. For example, “carbon dioxide is just a colourless, odorless gas”-T. Abbott). My fantasy is to lock our Tony in a 100% carbon dioxide-filled room for 10 minutes. Reality: he would emerge either dead or severely brain-damaged. That is my fantasy. Tony and Joe’s is Direct Action, soil carbon biosequestration and so on.

    The reality is that the Earth has been biosequestering carbon dioxide for 600 million years by formation of limestones, coal, petroleum, peat. The last couple of million has seen it settle into a relatively stable carbon cycle where carbon dioxide produced is balanced by that absorbed by natural processes, producing a global climate in which mammaloids like us are relatively comfortable. For the last century or so, us human mammaloids have been evaporating the stored carbon dioxide back into the atmosphere at a rate beyond the capacity of natural processes to absorb. Sure, some soil carbon biosequestration is probably achievable, but there is not enough soil on this Earth to cope with the overload. So “Direct Action” is nothing but meaningless political babble.

    At least our Joe is trying out some maths to put a dollar figure on his and Tony’s fantasy, but the reality is we need not 2 billion dollars, but 2 billion years without us to put things back in order.

  19. AR

    wotGLJsed – Direct Action was never intended as anything more than a great sounding phrase, to go with the fluoro vests and hard heads..err..hats.
    But, never fear, tyhe most powerful meeja in Oz will skrootinize such idiocies with heavy skroot to ascertain the troothiness… oh look.. something shiny AND Porcus Aviatrix overhead…. retires sobbing to reality,

  20. Mike Flanagan

    It is not an onerous task to find that the past two years have cost the Queenslanders and Australian taxpayers over $15 Billion for remediation of extreme weather events such as flooding and cyclone impacts.
    The southern states have experienced similar charges against their state and federal budgets for repairs and remediation after devastating fires.
    The science and the scientists are predicting these extreme weather related events and conclude they are the manifestation of our impairment and destruction of our biosphere by the emission of COe.
    If Abbott, Hockey , Hunt, and the Bernadi clique of deniers of the science, do not address the mitigation of the offending gases, emitted by industry and our main source of energy, then it is incumbent on them to account for the necessary remediation and repair funds in their budget and forward estimates of outlays. This is not apparent in their figures so far.
    If we are to adopt a policy, through the elevation of an Abbott government, that are designed to obfuscate the problem and not attend to the causes, then the chances are, we will deliver a massive bill for repair and remediation of the consequential extreme weather impacts to the next generation.
    The costs, as we are witnessing, will be enormous, and will have a dire effect on our national and state budgets that will undermine our social fabric and lifestyle.
    Our schools, hospitals, infrastructure and aged pensions etc will be impacted by the diversion of funds for remedial purposes, that is, from these social and physical infrastructures that define as a society and a nation.
    The ‘direct action’ policy presented by Abbott to the community as an alternative to a Cap and Trade policy of the Gillard Government is an obfuscation and an appeasement to the climate change deniers that underpin Abbott’s leadership and his personal political ambitions. To repair anything without attempting to understand and attend to the underlying causes of the problem, lacks logic.
    After considering the scientist’s reaction to Abbott’s ‘direct action’ policy and the government’s responsibility to the nation as a whole ,one can only come to the conclusion that if the polls prove right, the Abbott and his followers are about to embark on the biggest political con this nation has ever seen. Howard’s ‘never ever’ promise on the GST will pale into insignificance.
    Much of the policy espoused by Abbott, Hunt and Bernadi is drawn from the following groups that are funded by the Koch brothers and other wealthy (billionaires) self interested manipulators of the economic system,
    Global Warming Foundation
    The Donor Trust
    The Donor Capital Foundation.
    While Bernadi may deny the influence of ALEC and the Tea Party on his political philosophy he has yet to plausibly deny association and use of the resources of these sinister groups funded by the likes of the Kochtopus.
    The Cap and Trade system, with all its’ imperfections, is the only universal programme that has been devised by reputable economists that has the ability to address the problem at its’ source and to propose a policy that is a proven scientific fallacy by our scientists is both mendacious and irresponsible

  21. Achmed

    I don’t know if the climate change we are experiencing is natural or man-made. But to do nothing and then later find out we were wrong would be akin to trying to take out insurance while the house is on fire.


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