(Transcript from World News Radio)
The Federal Government has released its draft legislation on climate policy for public consultation.
The plan outlines how the Government intends to use financial incentives to help businesses reduce their greenhouse-gas emissions.
The draft has drawn widespread criticism from opposing parties and some environmental groups, who say it falls short of a credible alternative to the current carbon laws.
Zara Zaher has more.
The Federal Government's Emissions Reduction Fund bill is designed to replace Labor's carbon-tax and carbon-farming initiative.
Like Labor, the Coalition Government says it is committed to reducing carbon emissions to 5 per cent below 2000 levels by the year 2020.
But Climate Institute chief executive John Connor says there is still no independent public assessment that the proposed programs will make a difference.
"There are a couple of elements in here which are interesting, but there are so many holes in the broader program that no-one can be sure it will reduce carbon pollution, while we know the current laws, which set a limit as well as a price on carbon, will substantially reduce carbon pollution."
The fund will cost $2.5 billion over four years.
The money will be used to pay companies for activities that cut pollution, like planting trees or improving soil carbon.
It is central to the Coalition's Direct Action plan, its alternative to the carbon-pricing scheme introduced under the former Labor government.
At Victoria University, Professor Philip Adams' work includes applying economic models to analyse climate-change policies.
Professor Adams suggests the most effective method of tackling pollution is putting a price on carbon-dioxide emissions, as the previous government's policy did.
He says the new scheme will not make a genuine difference, compared to Labor's legislation.
"The current Government's Direct Action Plan, of which the Emissions Reduction Fund is just part, is not going to -- in our view -- adequately price emissions and, therefore, cause users of the goods such as coal, et cetera, that emit gas to change their plans and reduce their consumption of those fuels."
Professor Adams says Australia has to take action but, ultimately, climate change is a global issue and all countries should be urged to engage more productively.
He says, despite some flaws in the Coalition's legislation, its development is valuable to concentrate further on the issue of climate change.
"If the concern is CO2 emissions, then any legislation that is directed towards reducing those CO2 emissions is a move in the right direction."
That is a message echoed by Hugh Grossman, executive director of RepuTex, a research provider and adviser for the Australian emissions market.
Mr Grossman says financial incentives to help businesses reduce their emissions will encourage them to participate.
"There's money available for companies to reduce emissions, and, in that context, I think we will see industry participate in this scheme. At this point, all we're seeing, though, is the incentive mechanism, which is the Emissions Reduction Fund. We're yet to see the baseline and penalty scheme, and the detail on that will come sort of early next year. Any policy is good policy. I think, ultimately, there's still the risk that the Australian market's left without policy, and I think that would, obviously, be the worst-case scenario. So in that context, you know, the Emissions Reduction Fund is a positive step."
But John Connor, from the Climate Institute, says the Federal Government should be more transparent in releasing full details of the policy.
Mr Connor argues the new legislation is more politically motivated than aimed at resolving the issue of climate change.
He has expressed concern over the cost of the program for taxpayers.
"One of the great tragedies of this initiative is that we're actually turning our back on polluter payments, which is a carbon revenue under the current scheme which would be over 12-and-a-half billion (dollars) itself. So when you add that loss to this expenditure of taxpayer funds, that's over a ($)15 billion hit on the budget that's there for political reasons only, when we actually have a better scheme which is actually going to drive down pollution, drive new jobs and help avoid dangerous climate change."
The Federal Government says the fund will pay industry for activities that reduce carbon emissions and will take into account three key design principles.
Environment Minister Greg Hunt says, first, the fund will identify and purchase emission reductions at a low cost.
He says it will purchase emissions reductions that make a difference to greenhouse-gas emissions.
And he says it will design systems that make it easy for business to participate.
Submissions on the draft bill close on May the 23rd.
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