A deal between the Palmer United Party and the federal government means the government's $2.55-billion Direct Action climate laws appear set to become law.
Under the agreement, the government won't scrap the Climate Change Authority - the independent body set up to provide advice to the federal government on carbon emissions.
The Coalition has also agreed to an inquiry, to be chaired by former Reserve Bank head Bernie Fraser, to look into a possible Emissions Trading Scheme which will report back to parliament in 2015.
The government has secured its Direct Action climate change plan by promising the PUP to fund an investigation into an emissions trading policy it is unlikely to adopt.
It has also agreed to renege on its election commitment to scrap the Climate Change Authority.
Instead, it has promised to ask the Authority to conduct an 18-month review of the PUP plan to legislate an Emissions Trading Scheme that will come into effect at a zero rate when Australia's key trading partners implement their schemes.
PUP leader Clive Palmer - who has said in the past he wouldn't support direct action unless an international ETS comes into effect - claims it is a win and keeps the hope of an ETS alive.
"This is a much bigger issue than anything else in our generation. As US President Obama said, this is a situation where you don't want to be on the wrong side of history. I welcome the courage the Prime Minister has shown today and the Environment Minister has shown in allowing the debate on this issue in providing the resources for the Climate Change Authority to keep hope alive and to look at the Emissions Trading Scheme."
Despite the review, the government is holding firm on its opposition to the policy and Climate Minister Greg Hunt reaffirmed there are no plans to implement an ETS in the future.
Greg Hunt says the deal is a win for the government but has reiterated the coalition's opposition to an ETS.
"Our position was to abolish the carbon tax. Our position hasn't changed, but as an important part of the negotiations and as a show of good faith, we have accepted and agreed on the terms of reference provided, but our position hasn't changed."
The federal Government's Emission Reduction Fund would pay more than $2.5-billion over four years, with $1.5-billion being spent in the first three years to polluters who reduce their emissions.
The clean-energy regulator will manage the fund through a reverse-auction process, with payments made only when companies can demonstrate a genuine emissions reduction.
Auctions for business to win carbon-abatement funding are to begin late this year and be conducted every three months.
The Government says the fund will focus on practical action, like cleaning up waste coalmine gas, wasteland-fill gas and methane gas and focusing on energy efficiency on a significant scale.
The fund will also have what the Government calls a safeguard mechanism to discourage businesses from emitting higher than historical levels.
Mr Hunt says the government will achieve its emission reduction target of five per cent by 2020.
But Labor believes the government's climate policy deal with Mr Palmer will cost Australians and have little effect on emissions.
Labor's climate change spokesman, Mark Butler, says he believes the deal is also an embarrassment for Australia on the global stage.
"What it means is that there is no meaningful way to reduce Australia's carbon pollution level. It means that the government will be paying billions of taxpayer dollars over to Australia's biggest polluters and it will leave Australia utterly isolated at important international forums like the G20 when countries like the United States, China and so many more present their serious plans for tackling climate change."
Greens Leader Senator Christine Milne says she believes the deal does not go far enough to combating climate change.
"What we have here is no contribution to bringing down emissions, no modelling to back up the claims, a government and Clive Palmer which tore down an Emissions Trading Scheme which was bringing down emissions."
The government also has the support of independent senators Nick Xenophon and John Madigan, whose votes when added to the four PUP-aligned votes will ensure the laws pass the Senate.
Share
