Prime Minister Tony Abbott's Direct Action policy may be more expensive than buying carbon permits. Australia's Climate Change Authority has advised the Abbott government that it would be "cheaper" to achieve the country's carbon emissions reduction target by purchasing permits overseas as part of climate change policy.
According to reports, business groups continue to pressure the Abbott government to consider the use of international carbon permits to improve Australia's chances of meeting its reductions target of 5 per cent on 2000 levels by 2020.
In what could be the Climate Change Authority's final report since Mr Abbott wants it scrapped, the organisation said meeting Australia's international target using only domestic means, as proposed in the Direct Action policy, is deemed more experienced.
The report also advised the Abbott government to reduce the tax burden and become more competitive by implementing domestic emissions reduction polices and buying of international permits. According to its evaluation, the Climate Change Authority said the government can spend a fifth of its proposed $2.5 billion budget for the Direct Action plan and buy enough international permits to achieve its emissions reduction target of 19 per cent by 2020.
Reputex, a major carbon market analysis firm in Australia, said the Abbott government's proposed Emissions Reduction Fund is not enough to meet the country's target of cutting emissions to 5 per cent below 2000 levels by 2020. When Australia misses its mark, it will also fail to meet its commitment under the Kyoto Protocol.
The report also revealed that Mr Abbott's Emissions Reduction Fund (ERF) will fall short when it begins in July with the government already facing a shortage of more than 300 million tonnes.
In a statement by Climate Institute CEO Joe Connor, he said that Mr Abbott's carbon tax repeal will amount to a subsidy of $15 billion to major carbon emitters. He said the repeal of carbon laws will be a "shattering and historic loss" that will not hold companies accountable for their own pollution. He said Mr Abbott's proposed Emissions Reduction Fund does not amount to a "credible, sustainable or effective climate policy."