The Coalition government will replace the Labor government’s Carbon Pricing Mechanism with a direct action carbon policy. According to Dr Rohan Nelson, Associate Professor of Agricultural Economics and Policy at UTAS, the direct action policy will operate through an Emissions Reduction Fund (ERF).
Under the new arrangements, the government will make offers to buy avoided emissions or sequestration abatement through the ERF. According to Nelson, the government has yet to clarify how accurately the new direct action policy will account for and measure carbon abatement.
The government has also yet to outline whether the policy will play a part in meeting Australia’s international obligations with respect to carbon emissions.
However, Nelson says that it has been made clear that the government will buy the permits. The lingering question is about how stringent the regulation will be and how the government will administer or enforce it. There is also the question of costs and benefits for farmers. At the moment, it looks as though the direct action carbon policy may end up like a grants program, adds Nelson.
The Coalition government has said that the Labor government’s Carbon Farming Initiative was too stringent. Nelson says that the public can expect to find out more about the direct action carbon policy as the new government releases further details in the coming months.
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