Can Hunt sell the Senate a half-baked Direct Action?

In the wake of the Carbon Pricing Mechanism’s repeal, the government is tasked with a short-term challenge. Having reaffirmed its commitment to achieving Australia’s current Kyoto Protocol target (unconditionally reducing our 2020 emissions by 5 per cent compared with 2000 levels) the government, somewhat awkwardly, does not have an active policy mechanism to achieve this.

The Coalition Government supports a ‘direct action’ approach to combating climate change and, as a key element of direct action, has pledged about $2.5 billion into a competitive grant style ‘Emissions Reduction Fund’. To create this fund, the government will first need the Carbon Farming Initiative Amendment Bill 2014 to pass through the Senate, with the next opportunity being late August during the next sitting of parliament.   

But the government does not have a majority in the Senate, and for the legislation to pass in August it will need cross-bench support. Securing this support will be difficult because direct action currently does not have the support of Labor, the Greens or the Palmer United Party. Perhaps surprisingly, the government conveys optimism that it will be able to convince other parties to support the legislation.

In an interview with Tony Jones on ABC’s Lateline program last Thursday, Environment Minister Greg Hunt stated not only the reasons why the government supported scrapping the CPM but also why other parties should support direct action. Hunt stated: "the tragedy of the carbon tax ... is it still led to emissions being virtually unchanged ... now we can move to an approach which actually reduces emissions".

So, if the government is proposing a new approach that they claim will be effective, shouldn't opposition parties now take the time to freshly evaluate the government’s direct action plan?

It’s hard to know if PUP has actually scrutinised direct action in any detail. In any case, PUP has rejected direct action outright as a waste of money. The Greens have ideologically opposed direct action from the beginning, the government won’t get their support in the Senate either.

So what about Labor? Will they take a serious new look at direct action?

Hunt, in his Lateline interview said that he would "be surprised … if the ALP were to stand against a $2.5 billion fund to reduce emissions" and some have commentated that blocking this legislation could backfire on Labor, particularly if voter sentiment is to ‘move on’ from the divisive politics around climate change policy.

But what some forget is that the 5 per cent Kyoto emissions reduction target has bipartisan support, and Labor is bound to this commitment also. That means that Labor’s support for direct action would first be contingent on Labor having certainty that Australia would be able to meet its commitments by adopting the government’s direct action plan.

And here’s where things get unstuck for the government. Things get unstuck precisely because in order for Labor to have this certainty, they first need clarity from the government.

According to the Department of Environment website, the design of the ERF was actually "finalised" in the Emissions Reduction Fund White Paper, released on April 24. However, those practitioners actively involved in technical workshops with the Clean Energy Regulator on the design of the fund are aware that its design is definitely not finalised. While some overarching design elements have been laid out, the detailed design has not been agreed upon, and there are still numerous and fundamental design challenges that technical experts and bureaucrats are trying to understand and resolve. With so much still to work through, it is hard for anybody to say at this stage whether the fund will be able to effectively drive down Australia’s emissions to meet our 2020 Kyoto target.

So those in the know definitely know that the direct action policy mechanism is still a construction site. That’s fine in itself, and to be expected when developing a new policy platform. But the Coalition has been "developing" direct action for some years now. They’re now in government, and they still don’t have a final blueprint for its design.

Without a coherent direct action blueprint to put on the negotiating table next month, can the government reasonably ask Labor to make an evaluated judgement on its effectiveness and to then offer its support? You could say that it’s like entering some eggs, a bag of flour, sugar, milk, and a pinch of bicarb soda into a cake competition and telling a panel of judges "trust me, it will make a fantastic cake".

Hunt optimistically stated on Lateline that "this is the moment where we can invite bipartisan support". Logically, yes, this is precisely that moment. But without a cake to put on the table, it’s hard to believe that Labor will come to the party either.

Evan Stamatiou is a Senior Associate at Net Balance. Evan is based in Melbourne.