Environment Victoria's Submission on the Government’s Direct Action Plan

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17 January 2014 The Australian Senate Standing Committee on Environment and Communications Parliament House Canberra ACT 2600 Dear Ms McDonald, Re: Inquiry into the Government’s Direct Action Plan Environment Victoria welcomes the opportunity to make a submission on the Federal Government’s proposed Direct Action Plan (DAP) and other policy and legislative matters relating to climate change. About Environment Victoria Environment Victoria is one of Australia’s leading independent environment groups. With over 80 member groups and tens of thousands of individual supporters, we’ve been representing Victorian communities on environmental matters for over 40 years. We have been working on climate change for over 15 years, with specific focus on addressing the contribution of our electricity generation to greenhouse gas emissions. Below, we set out a range of concerns on the issues covered by the inquiry’s Terms of Reference. Effectiveness of Direct Action Plan DAP unlikely to achieve sufficient emissions reductions A number of reputable analyses have suggested that DAP, and more specifically the Emissions Reduction Fund (ERF), will not be able to achieve the 5% cut to emissions that the Government has agreed to. In fact, modelling by SKM MMA and Monash University’s Centre of Policy Studies found a likely increase in emissions by 8‐10% by 2020.1 In a study by Reputex, emissions growth of 16% by 2020 was projected under DAP.2 In its “Blue Book” prepared for the incoming Coalition Government in 2013, Treasury said that “in the absence of a carbon price, the 5 per cent reduction target is unlikely to be met without significant budgetary or economic costs.”3 (p24) Treasury went on to say that: A market‐based mechanism can achieve the necessary abatement at a cost per tonne of emissions, far lower than other alternative direct 1

The Climate Institute (2013), Coalition Climate Policy and the National Climate Interest. http://www.reputex.com/publications/behind‐the‐numbers‐adding‐up‐to‐the‐direct‐action‐plan/ 3 http://www.scribd.com/doc/38100930/Redacted‐Blue‐Book‐Pt2 p24 2


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