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Sep 3, 2013

Direct Action a gross waste, and Abbott's right to cap its funding

Tony Abbott is right to cap his worthless Direct Action plan on carbon emissions. If only he'd go further and dump it altogether, writes our man in Canberra.


Opposition Leader Tony Abbott has made the right call in declaring yesterday that his Direct Action policy will be capped at $3.2 billion regardless of whether it enables Australia to meet the hitherto-bipartisan target of a 5% reduction in CO2-equivalent emissions by 2020.

Direct Action is the policy settled on by Abbott in early 2010, crafted by his “climate action” spokesman Greg Hunt, as a cover for his abandonment of John Howard/Brendan Nelson/Malcolm Turnbull’s commitment to an emissions trading scheme. It has the unusual distinction of being the one policy position Abbott hadn’t adopted or advocated on climate change in preceding years — before that, Abbott had variously rejected and accepted anthropogenic climate change and advocated a carbon tax as well as backing Kevin Rudd’s Carbon Pollution Reduction Scheme. Direct Action won’t meet that 5% target — it won’t come close, not by the normal maths used by most of us, and certainly not according to any independent analysts who have vetted the policy. Indeed, Direct Action will make a negligible impact on reducing emissions.

How do we know? Because it’s been tried before. Direct Action is the same approach adopted by the Howard government on greenhouse emissions — and adopted for the same reasons, as a figleaf for climate denialism. The Howard government, which rejected climate science for nearly all of its existence until forced politically to acknowledge it, ran a series of subsidy and grant programs to encourage renewables or energy efficiency, in which Canberra bureaucrats picked carbon winners and handed out money. Both the Australian National Audit Office and the Productivity Commission costed the abatement purchased under such programs at a cost running into the hundreds of dollars per tonne.

Direct Action is costed on the basis that a similar program could deliver abatement at $11-$12 a tonne, based on buying the bulk of its abatement at $8-$10 a tonne through soil carbon, in which carbon is sequestered in soil by farmers and, allegedly, remains there permanently. That costing is nonsensical, as was pointed out to Hunt directly when he tried to use a Victorian farmer with a keen interest in soil carbon as a publicity prop and was told by the farmer his scheme was underfunded.

All this is exactly as opposition frontbencher Malcolm Turnbull warned in 2010, when he said the policy was a climate denialists’ policy that could be abandoned quickly and that, if seriously implemented, would pose a significant threat to the budget.

“That’s why Abbott is not merely right to put a cap on the program, he could go one better and dump it entirely.”

At an abatement price many multiples of that costed, the $3.2 billion budget for Direct Action won’t make much of a dent on emissions — the Australia Institute suggested it would yield about 18% of the needed abatement, based on Australian National Audit Office figures, meaning Australia’s emissions would rise under Direct Action, rather than fall. Moreover, Direct Action will likely fund energy efficiency projects that companies would have proceeded with anyway due to their overall cost-effectiveness.

Abbott’s commitment that not a single additional cent will be spent on emissions abatement is thus a clear abandonment of the 5% reduction target.

It is, however, the correct call in fiscal terms: Direct Action will be a grossly inefficient use of taxpayer funds. To meet the 5% target will require a five-fold increase in the program’s budget — and bear in mind that, assuming bureaucrats are doing their jobs correctly and awarding grants to the most efficient projects first, the more money available to a program, the poorer the average quality of the recipient projects. That means the average cost of abatement will rise with every increase in program funding.

But surely some abatement is better than no abatement? Especially if an Abbott government has removed a carbon price and, as seems likely despite Hunt’s denials, watered down the Renewable Energy Target? In fact, in the absence of systemic incentives to improve energy efficiency or shift to to renewable energy sources, a grants program like Direct Action simply becomes more business welfare, as handouts to farmers and companies to do what they would have done anyway, subsidies for absurdly inefficient projects or rewards to political mates.

One of the most expensive forms of abatement, ethanol fuel subsidies, which generated abatement at a cost of several hundred dollars a tonne, was the basis for one the worst scandals of the Howard government, when it bent over backwards to look after the interests of Manildra’s Dick Honan, with then-prime minister John Howard lying to Parliament about it.

That’s why Abbott is not merely right to put a cap on the program, he could go one better and dump it entirely. It’s always been clear he doesn’t believe in climate change, or more likely simply doesn’t see it as a significant issue. The most intellectually honest and fiscally defensible position Abbott could adopt is to demonstrate that Turnbull was right, and dump it.


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34 thoughts on “Direct Action a gross waste, and Abbott’s right to cap its funding

  1. Observation

    But dont worry all you mums. 22 Billion dollars will make sure you get designer booties for your bub before it grows up in a desolate waste land burnt to a crisp.

  2. drovers cat

    Amazing. Even when Abbott’s wrong he’s now right. Even when he sets up the expectation to break a promise before he’s even elected, he’s right.
    Has crikey just become another unquestioning cheerleader like the MSM now? Is it that important for crikey to be seen backing a winner like the donkeys out there?
    Are the polls so in charge of the outcome now that we shouldn’t even bother having an election? Why? Let’s save the money.
    It’s clearly all over – Abbott’s already PM – let’s all go home

  3. pixillated

    Abbott has just set up the perfect carbon wedge.

    Mark Butler has committed to Labor’s position to repeal the carbon tax in favour of a market price on carbon emissions. Now Abbott, once in power, can split the legislation to repeal the carbon tax from Direct Action legislation. He can pressure Labor to not “break a promise” and obstruct the repeal of the carbon tax.

    But once the tax is repealed and Abbott introduces Direct Action legislation, he can also rely on Labor and the Greens to block it, because it is not a price on carbon emissions.

    Why would he ever think about going to a double dissolution election when he has just achieved his best ‘denier’ carbon emission outcome – no action at all, for which he can blame Labor!

  4. form1planet

    Honestly, we’d be better off resurrecting Margaret Thatcher to run the country than leaving it to Abbott. Yes she was evil and heartless, but she would have supported a market mechanism for mitigation, and she would have recognised that the phrase “a 4 degree future is incompatible with an organised global community” is worth paying attention to.

  5. Observation

    Watch closely the policy announcements during the next few days. Positioning themselves for the costing figures release. A nip here and a tuck there. Abbott is starting to use political capital that he thinks he is entitled to before the election. Turn the lights on Australia and take close notice. These are the most critical days and hours ahead.

    It will be interesting to see how much of the facts and promises will be broadcast to the public through the regular media. My guess is the infomercial crap will continue with no substance.

  6. Electric Lardyland

    It does say a lot about much of the media coverage in this country, when for much of the past few years, Abbott can relentlessly perform his, ‘she lied, she lied, she lied to all of us’ routine, on the issue of a price on carbon, but at the same time, his own position is that of two basic lies told over and over again. That is, he believes that, yes, climate change is a problem, and that, he will be acting to reduce Australia’s emissions with his Direct Action plan.

  7. Steve777

    It was always crazy that the Liberals were planning to spend billions on a plan that no credible authority believed would work to reduce the emission of an invisible (and therefore harmless?) gas to fix a problem that most members of the Liberal and National parties, their constituency and bank rollers don’t believe exists.

  8. maustin

    So Tony has broken a promise already!! Doesn’t serve very well for a Liberal government or an Abbott Prime Ministership does it.
    I hope Alan Jones and Andrew Bolt will be screaming the house down and start calling for a peoples revolt. Oh wait thats only for policies they don’t agree with. My bad

  9. MJPC

    Sorry, I am just a bit confused here; so he gets rid of the abatement policy and then the COALition’s only policy is dig, dig, dig and stuff the world environment.
    Is this the same abatemnent policy to plant tree’s in areas where rainfall is marginal, no funds to nurture the vegetation through its growing period to become so much fodder for the next bushfires caused by the increasing ravages climate change? Where’s Jaymie when we need him for an explanation of those real tree’s? GHUA!

  10. maustin

    So Tony is basically telling us that he is going to waste $3.2 billion on a plan that is not going to achieve its stated aims. Sound more like $3.2 billion handout to farmers and businesses to me.

  11. Steve777

    Maybe Direct Action would be useful for pork-barrelling in marginal electorates and for rewarding favoured constituencies and groups.

  12. zut alors

    Abbott will only believe in climate change when it’s too hot during an entire Canberra winter to indulge in his pre-dawn run or bike ride.

  13. MG99

    @drovers cat

    Why am I spending on Crikey subscription for even Crikey to start prostrating before the Sun King (RKM) and Tony Abbott.

    For all his posturing on trust and the negative campaign he has run for the last three years claiming Julia Gillard lied to the voters (remember Juliar) here he is days before an election copping out on climate change and his Direct Action plan. The policies of Abbott are juvenile (boat buyback) and we have no one calling him out.

  14. CML

    Why am I not surprised by this article?
    I agree with drovers cat @ #2 – well said!!

  15. Sharkie

    If you want to see the Libs insane commitments to curb greenhouse gases, look no further than their behaviour in Australia’s most marginal seat, Corangamite.
    The Liberal Candidate Sarah Henderson supports the Liberal state governments planning laws that have effectively destroyed the chances of any new wind farms getting approved. Her partner, state upper house MP Simon Ramsay is widely regarded as the most anti wind farm MP in the state, and then Henderson pledges 300k for community solar.
    It doesn’t matter that Corangamite is one of Australia’s best areas for wind and would rank very low in terms of solar energy suitability. Pork barrelling trumps sensible environment policy big time.

  16. beachcomber

    Throwing away $3.2 billion is disgraceful. Everyone knows Abbott’s Direction inaction Plan won’t do anything to reduce Carbon Emissions. It was a political fix, not an environmental fix.
    But just as disgraceful is the media letting him get away with his lie.
    Most Australians want action on Climate Change. But if the polls are right, we are about to elecet a PM who will dismantle our Cliamte Change legislation. Someone who will replace it with a $3.2 billion scheme that will do nothing.

    Future generations will look back and wonder what on earth we were thinking off.
    With a dead Great Barrier Reef, our coastal cities and towns regularly damaged by rising ocean levels and more frequent and severe cyclones and storms, why on earth did our parents turn their backs on action on Climate Change?

    Why wasn’t this a major election issue? Didn’t anyone care?

  17. Saugoof

    I’m sorry but did anyone ever think this was seriously going to be implemented?

    I expect that they miraculously find a Labor black budget hole which they’ll use as an excuse to dump it, or even more likely what pixillated #3 has already mentioned, they’ll rely on Labor and the Greens blocking it so they can blame them for not going ahead with their election “promise”.

  18. @chrispydog

    The Minchiviks have won.

    Abbott is owned by two old white men: Murdoch and Minchin.

    Dumbocracy in direct action.

  19. klewso

    Just suspend your credibility for a moment and ponder “What if the Left was right about this?”?

    That could mean they were right about other things?
    Then consider the corollary :- ergo “(that fount of all wisdom) The Right (to rule) might not have all the answers they know they do”?????????
    Now, back to normal transmission …. and perish that thought.

  20. Observation

    Well Abbott has already warned them not to oppose it as he will have a mandate if elected. And there you go ..there is the Australian public being put on notice. It is what they call a contingency plan which I am guessing most of their announcements will have in some form or another.

  21. klewso

    Abbott will only believe in things there are more votes in.

  22. klewso

    Whatever happened to Senator “Minjchin(?)”?

  23. @chrispydog

    Just to put our dirty energy in perspective:

    Australia’s CO2/kWh is about 650g
    France’s (about 75% nuclear) about 80g
    Germany, which has spent a motza on renewables is currently about 570g and rising…yes rising, because they switch off gas when solar peaks each day and coal is kept running and they’re turning off the nuclear generators! Ironic, huh?

    Even if we did reduce our emissions by 5% on 2000 levels, it will make diddly squat difference in the scheme of things.

    Unless we can ditch coal our emissions are not going to change significantly.

    Globally, to 2050 we will need the equivalent of one nuclear reactor built each day to reach a stable level of 450ppm and zero emissions.

    Now, just try and picture that with only wind/solar.

    Abbott’s not even a pimple on a flea on an elephant.

    Depressing does not even go close to describing it.

  24. Hamis Hill

    Tony Abbott associated with something “worthless”.
    Gee, lucky we found out in time.

  25. Buddy

    I know that with regards to contribution we a are small contributor, despite us as a nation being very dirty and wasteful with energy… But i actually want us as a nation to be part of the solution, to be doing something.. Not pretending we are doing.. . It’s not good enough to say ‘ but what does our contribution matter’.. It’s about perception, it’s about role modelling and leadership ! It’s also a great way to increase new investment, build new industry , drive new technology whist driving home the message that climate change is here, real and we need to bloody well do everything we can to ensure our grandkids have something worth handing on.

  26. tonyfunnywalker

    This admission is the ” boat buyback ” of Climate Change.

    Three lemons in a row

    Boat buy backs
    Direct Action
    And Abbott’s snail broadband.

    What the hell why are we supporting a Lemon as PM.

    Love Observations comment – I fear for my grandchildren Because if the Lemons get too terms – it will be too late.

  27. Thorn

    It is amazing just how much of a reactionary figure Abbott really is. He actually stands for nothing except the most superficial materialism.

    Have you ever seen a situation where the most likely winner of the election of the government of a country has as his main platform the abolition of socially sustainable policy and the institution of programs that will harm the future of the people of this country?

    I look at Abbott at some venue where most people are wearing fluro jackets and have to wonder what the hell these people are doing supporting Abbott? He directly stands against their own best interests.

    Then there is the weird business of his daughters. I like the idea of family supporting family, but this is weird. I have three kids that have no problem hugging and giving me a kiss on the cheek in public (even my sons 28 and 30) but spending six weeks literally holding my hand is something that they wouldn’t do, and I would not be so strange to ask them to do. There is not one of their friends that doesn’t think the interaction between Abbott and his daughters is sort of creepy. I think Clarke and Dawes hit the nail on the head when they posed the question “will your daughters be part of your ministry”.

    I don’t even like seeing spouses being part of a campaign as I am only interested in the candidates and their policies, not some fluff that will mean nothing after the ballots close.

  28. the duke

    you reap what you sow.. i sleep easy at night knowing that i was not swept away with ‘me too’ aka Kevin07.

    Kevin07 has killed the ALP and suspect that he will not be welcome back after he loses this weekends election.

    what does Kevin07 even stand for? can’t trust the guy, he is better off retiring and spending that $100m fortune that his wife has built – he has no idea what the average australian family is these days.

  29. Observation

    Thorn – I completely agree, Abbott with his daughters is very creepy, and now when I see him in public with other women and kids I get a shiver go through me. And as you say, I hear many others comment on this.

  30. klewso

    “Beware of creeps bearing gifts”?

  31. Scott

    Photogenic family members have been used in politics for centuries. To be a successful leader, you need to share personal stuff with your followers, and this includes access to the family. It builds trust and conveys the feeling that “yes, I’m a lot like you.” Abbott gets this fact, and is rolling out the family to appeal to families, females and the young vote, three critical demographics where these photo ops can generate some votes.
    One of the reasons why I believe Gillard struggled was due to the fact that she didn’t have that greater family. Not a lot of people could identify with the values behind an unmarried 50 something female with no children, and it hurt her appeal to the people. The opinion polls confirmed it, the pressure hit the backbenches and the daggers came out.
    Politics is not just about policy. You can have the best Ideas in the world, but if you can’t convince people they are worth while, then they are not going to get up. Leadership and trust, something lacking in the labor party at the moment, is the currency here and the governments piggy bank is empty.

  32. robert biggs

    The most rigged conversation about politics in history continues – what is palpably wrong headed is headlined as being right

  33. K.D. Afford

    Minchin,(still there) Bernadi and Morrison are behind the scene pulling faces at scientists and can’t wait to sack a raft of them for telling it as it is!

  34. Observation

    Scott – Why is there very little of Tony wit his wife? Even on the cooking show she wasn’t taking part?

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