Climate Spectator's Tristan Edis (27/8/13) reports on estimates by the ALP's Mark Butler of the penalties that some larger companies might pay under the Liberals' Direct Action plan, based on emissions figures from the last four years:

Labor’s Climate Change Minister Mark Butler has released data illustrating how a large number of companies are likely to be paying penalties under the Coalition’s Direct Action scheme.  These companies include Origin Energy, Rio Tinto, BHP, OneSteel, Qantas, Virgin, Alcoa, Xstrata, Woodside Petroleum and Santos.

The Coalition’s Climate Spokesman, Greg Hunt, says they aren’t budgeting for any revenue from the application of penalties.  Nonetheless the policy as currently articulated in their 2010 election platform (an update for 2013 has strangely not been issued), and which Hunt’s office maintains as an accurate reflection of their platform, states:

“Businesses that undertake activity with an emissions level above their ‘business as usual’ levels will incur a financial penalty.”

Hunt has since clarified that the business as usual emissions levels or baselines would be set based on the average of a company’s emissions in the previous five years using data reported via the National Greenhouse and Energy Reporting scheme (NGERs).  However he has refused to provide even a general indicator of the level of penalty the Coalition might impose for companies exceeding their baselines...

The value of [the penalties estimated by Mark Butler, ALP] are not huge. For a number of companies these would be well below what they would pay under the Government’s emissions trading scheme even taking into account free permits.

But it serves to illustrate that based on what scant detail we have available on the Coalition’s policy, penalties are likely to come into play.

Indeed if penalties didn’t come into play then there would be real question marks about the effectiveness of the Coalition’s policy.  If it turned out that firms were given emission baselines that they never exceeded, then taxpayers would be shelling out money to polluters for doing nothing to reduce their emissions. That’s because polluters are able to sell any excess baseline entitlement to the government as abatement (even if it would have happened without a taxpayer inducement).

If Hunt is genuinely serious that he plans on implementing a scheme where penalties for exceeding emission baselines never apply, then it poses a real problem for taxpayers. 

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