Nov 12, 2015 - 4:20pm
With the federal government’s second round of Emissions Reduction Fund (ERF) auctions over, it is time to work on the policies that will modernise and clean up the Australian economy, The Climate Institute said today.
“While there may well be important projects getting taxpayer backing from the ERF’s two auctions, now is the time to focus on the policies that will help modernise and clean up Australia’s economy,” CEO, John Connor said.
“The combined 93 million tonnes of pollution reductions has been purchased with $1.2 billion of the $4.95 billion ERF. By 2030, this represents just two per cent of Australia doing its bit towards the bipartisan and internationally agreed goal of limiting global warming to less than 2°C above pre-industrial temperatures,” he said.
Mr Connor said that taxpayers have now spent 25 per cent of the ERF to achieve 2 per cent of the reductions we should make by 2030.
“While we see an expanded list of projects getting funding, we don’t see anything significant in Australia’s largest polluting sector – electricity. This is a reminder of the fundamental problem with relying on this taxpayer fund - it doesn’t send clear enough signals to the high polluting parts of the economy that they need to clean up.”
Yesterday The Climate Institute released an analysis of the ERF’s ability to meet core carbon reduction goals based on the $13.95 average price of the first auction. The average price of both auctions to date is $13.12. Assuming the entire $4.95 billion ERF budget is spent at this average price, the government can buy 377 million tonnes which works out as:
- 3.5% of Australia’s total emissions out to 2030.
- 8% of a 2030 target consistent with Australia doing its bit to achieve the less than 2°C limit.
- 15% of the government’s current inadequate 2030 target.
“The government has run another professional auction process, but now we need to get down to the policies that matter. We need to tackle the biggest polluting sector of the economy – the electricity sector. This starts with a closure plan for our old and inefficient coal fired power plants so they can be replaced with clean energy alternatives.
“The key point remains - the ERF is a supporting policy,” Mr Connor said. “Now is the time to discuss the policies that really matter - modernising and cleaning up our economy.”
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