Under the Coalition GovernmentDirect Action Plan

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Preferred provider for the NSW Government

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Climate Change and Direct Action under the Coalition

The Coalition has the same commitment as the Labour Party: reduce GHG emissions by at least 5% on 2000 levels by 2020The “Repeal Bill” has to be passed – needs Labour support in the SenateIf Labour does not support the Bill, the Government would have to have a majority in the Senate or go through a double-dissolutionThe longer the carbon price stays in place, the less likely it will be repealed:

China might accelerate its carbon pricing mechanismThe final IPCC reports will be released (with dire predictions)Other countries might move to act

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Direct Action Plan - incentive-based policy

Emissions Reduction Fund

• Purchases lowest cost abatement

• LCAL will purchase projects under the CFI or for projects that reduce the BAU baseline

• Reverse auction – LCAL will purchase the lowest cost abatement

Penalties

• Imposes financial penalties on businesses which exceed their ‘business as usual’ emission baselines

• BAU baseline calculated based on an individual firm’s average emissions over the past 5 years (NGER data)

More details to be developed through a white paper process (start in October 2013)

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The future of the Carbon Farming Initiative (CFI)

The CFI will continue under the new GovernmentEssential for abatement projects under the Direct Action PlanNew Government has proposed to expand the CFI by:

Allowing energy efficiency, waste coal mine gas, transport, composting/recycling and other abatement projects to be part of the CFIMore methodology determinations to be part of CFI and faster approval processes for thoseOption for carbon sequestration projects to be carried out with a shorter permanence period of 25 years (instead of 100 years)

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Direct Action - implications for organisations

If the Carbon Pricing Mechanism (CPM) is repealed half way through the FY13/14 year, the liability under the CPM will be calculated pro-rataIt is unclear whether the same entities that are liable under CPM would be covered by the BAU baselineIf covered by the BAU baseline organisations will

Either sell reductions to the Emissions Reduction Fund (if they emit below their baseline) orPay a financial penalty for emitting above their baseline

Demand for Australian Carbon Credit Units (ACCUs) generated under the CFI might fall awayUnclear what will happen to companies that received funding from the CEFC Unclear whether there would be legal action if the CEFC and ARENA default on specific contracts

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Which Climate Change related organisations will survive?

Was established to provide all Australians with independent and reliable source of information about climate change.

Governs Australia's mitigation policies, undertakes reviews and makes recommendations on:• the CPM emissions caps under the carbon price• emissions reduction targets and carbon budgets• the Renewable Energy Target • the Carbon Farming Initiative, and• the National Greenhouse and Energy Reporting System.

The CEFC is a legislated fund dedicated to investing in clean energy. • commercialisation and deployment of

Australian-based renewable energy• low emissions and energy efficiency

technologies

Administers legislation that will reduce carbon emissions and increase the use of clean energy (NGER, CPM, CFI, RET).

Currently part of the CEFC

Improves the competitiveness of renewable energy technologies and increases the supply of renewable energy in Australia

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Which Climate Change related organisations will survive?

Was established to provide all Australians with independent and reliable source of information about climate change.

Governs Australia's mitigation policies, undertakes reviews and makes recommendations on:• the CPM emissions caps under the carbon price• emissions reduction targets and carbon budgets• the Renewable Energy Target • the Carbon Farming Initiative, and• the National Greenhouse and Energy Reporting System.

The CEFC is a legislated fund dedicated to investing in clean energy. • commercialisation and deployment of

Australian-based renewable energy

Administers legislation that will reduce carbon emissions and increase the use of clean energy (NGER, CPM, CFI, RET).

Currently part of the CEFC

Improves the competitiveness of renewable energy technologies and increases the supply of renewable energy in Australia