Abbotts Carbon plan

Matt Grudnoff of the Australia Institute has published a short review of the coalitions direct action plan. This excellent analysis shows that the media needs to increase the scrutiny on the alternate governments. Highlights from the review include:

  • Competitive grant programs like the Coalition’s plan have been used extensively by governments in Australia as a way of trying to reduce emissions over the past few years, so we have a wealth of information on how effective these schemes have been in reducing emissions.
  • If we use the average cost of abatement for competitive grant schemes that have been previously conducted in Australia then by 2020 the Fund would have to allocate around $100 billion. That is, on average, $11.1 billion every year to 2020, or put another way, $1,300 per household per year. This is far in excess of what the Coalition has budgeted for.
  • As part of its Direct Action Plan the Coalition proposes to offset 15 million tonnes of emissions from planting trees. To achieve this would require an area of 25,000 square kilometres and about 9,100 gigalitres of water, two and a half times the amount of water proposed to be bought back by the draft Murray Darling Basin Plan.
  • The Coalition’s Emissions Reduction Fund would also require a large number of public servants to administer the tendering process. If we make the generous assumption that the average reduction in emissions per project is 25,000 tonnes then there would need to be about 28,500 successful projects to meet the target. If we assume four unsuccessful projects for every successful one then the number of projects assessed would be close to 150,000.
  • What’s most ironic is that the Coalition’s policy is a caricature of big government programs. It is not surprising then that the Coalition has been unable to find any economist that supports its direct action policy. It has also had great difficulty finding any business leaders to support it either.

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