Australian Government Cuts Inquiry Deal With Clive Palmer To Get Its Climate Policy Through Senate

PUP leader Clive Palmer (Photo: Bloomberg)

Former Reserve Bank governor and Climate Change Authority chairman Bernie Fraser will head an inquiry into emissions trading schemes around the world in the wake of the federal Government cutting a deal with Clive Palmer’s party to get its direct action plan through the Senate.

“It’s fundamental that Australia has an ETS,” Palmer said at a media conference with environment minister Greg Hunt yesterday.

But the move has provoked widespread scepticism and may simply be a delaying tactic, given the Abbott Government’s repeated rejection of an ETS and the plethora of existing studies into carbon trading schemes.

The deal is a major boost for the Coalition who, with crossbench support, now has the numbers for its $2.55 billion emissions reduction fund to pass in the Senate.

It also throws Bernie Fraser a lifetime, since the Government changed its mind on abolishing the Climate Change Authority and will keep it until at least the end of this parliament as its chairman undertakes his review.

Palmer’s support is a major win for the environment minister after 12 months of the Senate holding up a cornerstone of the Coalition’s election platform. Hunt said the Coalition’s opposition to an ETS hadn’t changed, but the inquiry was “as an important part of the negotiations and… a show of good faith”.

Direct Action features $2.55 billion in grants over four years, offered in reverse auctions to companies that volunteer to reduce emissions. The target is a 5% reduction in emissions by 2020.

The environment minister said he was confident of meeting the target, saying “We are likely to receive more abatement than we expected and the gap we have to fill is lower than when we started out”.

“We are committed to achieving our targets without a carbon tax,” Hunt said.

Over the past year, Palmer’s views have vascillated on the government’s policy, but yesterday he was back in favour of the plan.

“Direct Action will go a long way to dealing with these issues in the short term,” Palmer said today. He previously described it as “a token gesture”, “dead in the water” and “hopeless”.

Hunt described the deal with Palmer United as “a gesture of virtue”.

Palmer claimed he’d “kept alive” an emissions trading scheme, having previously insisted on a “dormant” scheme as a condition of abolishing the carbon tax.

Bernie Fraser’s 18-month, three-stage inquiry will explore global schemes, despite Government opposition to the idea. The initial report is due in June 2015, followed by a further report in November, prior to the UN’s 2016 climate change conference in Paris, with a final report due in June 2016.

Having supported the Government in abolishing Labor’s carbon tax, the Palmer United Party leader said “you don’t want to be on the wrong side of history” on climate change, warning that Australia was in danger of being disadvantaged in trade with other nations with emissions trading schemes.

“This is a much bigger issue than anything else in this generation,” Palmer said.

Opposition leader Bill Shorten claimed prime minister Tony Abbott had “sold his soul” to Clive Palmer.

“This is a dirty deal that will send our country backwards. Direct Action is a stupid and reckless policy that will achieve less but cost Australians more.

“This isn’t a policy to tackle climate change. It’s a policy to get Clive Palmer’s vote.”

Greens leader Christine Milne described it as “a sham of a policy”.

“I wonder what the G20 is going to make of what is essentially a grants scheme,” she said.

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