Australian Senate Inquiry on Direct Action Plan on Climate Change

The Environment and Communications Committee of the  Australian Senate is holding an Inquiry into the Government's Direct Action  Plan on Climate Change. I have been revising the notes for my on-line graduate course on ICT Sustainability, which starts in mid February at the Australian National University. The notes are published as "ICT Sustainability: Assessment and Strategies for a Low Carbon Future". In these I mentioned the ALP government's plan for a fixed carbon price, to be followed by carbon trading. The new coalition government had proposed a "Direct Action Plan", but what exactly is it and how much did I need to change my course to cover this? It turned out that at a technical level there was not that much difference between the old and new approaches. The new government's approach could be characterised as a "Carbon Tax" as the cost of abatement measures by industry will be subsidised by government.

In December 2013 the new Australian Government released a Green Paper on a new "Emissions Reduction Fund" (ERF). This envisaged replacing the previous government's carbon trading scheme with a reverse auction. The reverse auction itself will be technically simpler to implement than the trading mechanism proposed by the previous government, as it will involve far fewer transactions. However, the same environmental auditing standards will be used to verify the amount of emissions traded. Also extensive measures will need to be put in place to protect the auction system from manipulation.

The then Australian Department of Climate Change and Energy released a National Carbon Offset Standard in 2010. This set minimum standards for calculating and auditing the carbon footprint of an organisation. The standard covers calculating the greenhouse gas emissions associated with an organisation's activities, product or service. It also includes the general principles of acquisition and retirement of carbon offsets. These were to be used for the former government's Clean Energy Future 2011) fixed carbon price and trading scheme and is envisaged being used for the new scheme.

While the new ERF will have a relatively small number of transactions compared to the previously proposed treading scheme, each will be of a high value. This will require measures to combat likely attempts to defraud the system. The European Union Emissions Trading System (EU ETS), has been subject to hacking to steal emissions allowances and fraud. The cost of measures to deter, detect and investigate fraud in the Australian system is likely to be a significant part of the cost of the overall system.