. . . if the coal industry likes it.

Honestly, look at the facts. There is no realistic plan for addressing climate change that involves verifiable CO2 reductions that will benefit the coal industry. NONE. We must reduce the use of the magic dirt significantly to meet any targets set, and all the other direct action proposed by Tony Abbot is window dressing compared to moving to large-scale electricity production that doesn’t use coal as the fuel.

That’s the short summary of what I think of the Coalition policy that took a year to develop, after they had had a very good look at the proposed CPRS, negotiated in good faith to complete it, then reneged on that agreement.

Here is the link to the Coalition Policy I read.

And here is my more detailed analysis for the not faint of heart:

1. It’s too small, but they are only shooting for the 5% the government will. They say it will do 140 million tons of emissions reduction, and I call the amount required 143 in my previous analysis, but let’s not quibble.

2. The main focus of the policy is a thing called the Emissions Reduction Fund (ERF), which comprises 80% of the $3.2 billion to be spent over 4 years. Companies (with restrictions in the Policy steering finance to the largest projects at the largest companies) will bid for money out of the ERF for their abatement or emissions reduction projects to be funded. It will focus a significant amount of money on the least efficient old power plants, which smacks to me of rewarding these companies for holding out with the crappiest old technology the longest. Hardly my idea of incentivising the positive. The ERF will allow companies to trade in reductions of their emissions voluntarily, so it still has an ETS built into it, and is based on the already functioning NGERS compliance program. So, the claims of less bureaucracy and no ETS are complete distortions of reality.

3. The coalition has earmarked 61% of the emissions reduction under the ERF to abatement projects in the soil carbon area. Remember, this is the bio-char technology that they were hyping early on for sequestration of lots of carbon. It is an untested technology with uncertain success and unknown other consequences. So, for the folks who want to question the science of climate change in the first place, it seems a bit too much blind faith for my taste, but what the hell, lets put some research money into ramping it up I say.

4. It has some fantastic populist stuff in it that no one can be against, but that will have little effect or shows no stretch-target goal setting. Plant 20 million tees in the cities – who could disagree. A million homes with solar panels – great idea, but why so few? Clean energy hubs – wow, now that sounds futuristic, it’s got to be a great idea. Research on algal fuels – since I mentioned that two days ago (item 7), you know you have my vote!

5. it is entirely funded with federal tax revenue. No sources of new funding are proposed, and no elimination of current projects to free up funding are identified. So, it is an entirely unfunded program that will require drawing on federal support, and we know where they get their cash, don’t we?

6. It saves the Greenhouse Friendly™ (GF) Program that was to be killed off by Labor! This is a fantastic bit of grandstanding that is a complete distortion of fact. The fact is the GF program has already been included in the National Carbon Offset Standard (NCOS) that will be administered by the Australian Carbon Trust, a private company set up to do just that, and the details of the NCOS are pretty much exactly the same as the GF program, and the government has made transition from GF to NCOS hassle free and low cost. Hold on, I thought the Coalition were the folks who were supposed to be into privatising government programs? Are they planning on abandoning this work that has already been done?

7. The paper complains heavily (honestly, over half of the 30 pages is just a write up of the opposition to the CPRS we have already heard) about how an emissions trading system (ETS) results in unnecessary “churn” of money that is bad. But how exactly Tony, as I thought all the capitalists were onboard with growing GDP? As I see it, isn’t that what an economic instrument to cause emissions reductions is all about? I trade emissions reductions at my clean operating plant to you operating your dirty plant so that neither of us has to shut down tomorrow, we get an emissions reduction overall, and we delay the capital cost of implementation of other newer technology? Who gives a rats whether the GDP goes up with a bunch of these trades? Maybe Glenn Stevens, but then I reckon Glenn is a pretty cluey bloke who will probably factor in the introduction of a mew commodity market into his thinking when setting fiscal policy for the country in the year that it is introduced. He will probably let inflation go to 3.4% that year instead of the regular 2.5% before he starts ratcheting up interest rates to address the “inflation” caused by the trading of carbon credits on the countries GDP.

8. It’s a policy that allows business as usual, then trade if you decide to sign up and get free money to fix your old plant. Then if your efficiency goes down later after you got the free money, you will get penalised. But the penalties will be negotiated out with business later, and new entrants to the market will have to meet “best practice” which is not defined.

The analogy I draw is pirates in Somalia. Who here thinks the best approach is to go to the pirates and say, “Hey fellas, all this pirating you are doing is really harshing my buzz. So how about I pay you to learn a new trade and if you do that you don’t have to pay me back, and if you do go back to pirating, we will negotiate a financial penalty together. Plus, any new kids of yours that want to get a job when they grow up can’t get into piracy, but they can go into drug running or something else that meets a definition of best practice employment that we will also work out later.” Anyone?

Therefore, from the observations above, I do not think this proposal from the Coalition contains sufficient quantity of the simple kind of direct action that I think that governments alone exist to do.

I can propose an alternative approach that exceeds the test of simplicity proposed by the Coalition, is honest, and contains direct action to begin addressing energy efficiency, energy efficiency, energy efficiency, and then climate change.

How about instead of bribing people to do the right thing, we do a straight carbon input tax, and we take $3.2 billion dollars of the money raised to go the old crappy coal power plants and convert as many of them as possible to natural gas. The companies can either pay us in stock for our capital injection, which we can sell on the open market later when our investment of public dollars proves to be good business, or they can take the money as a loan on favourable terms (say 50 basis points lower than the average of the rate the 4 major banks would charge a small business).

Then, we spend an equivalent amount on upgrade of the power distribution systems throughout Australia on a priority basis.

Then we pass some simple regulations to be overseen by the consumer watchdog (ACCC) that prevents any consumer product that uses electricity which doesn’t meet a basic energy efficiency test from being sold in Australia.

Then, lets do all the ice cream and puppies direct action in the Coalition plan, but lets have good stretch targets, like a solar hot water, solar electric or a fuel cell system on half of Australia’s 8 million homes by 2015. We can use some of the money from the carbon input tax to subsidies this, before we send the rest of the money back to families to pay their higher power bills.

If we do the above, we will significantly exceed the 5% target in truly simple (not even a whiff of an ETS in my plan) and honest way. All of what I want to do costs some money up front, but pays off significantly over time in a compound manner.