PUP pressure forces PM to accept the prospect of putting a price on carbon

THE Government has bought salvation for its big spending carbon reduction plan by bowing to Clive Palmer’s demands for consideration of an emissions trading scheme.

THE Government has bought salvation for its big spending carbon reduction plan by bowing to Clive Palmer’s demands for consideration of an emissions trading scheme.

The Climate Change Authority, which the Government had promised to dump, will survive for at least the life of this Parliament.

It will spend 18 months examining the options for an ETS and the use of trading schemes elsewhere, reporting in June 2016.

The prospect now is for the Government to be told it had to put a price on carbon - what has been called a carbon tax - despite its firm rejection of the policy.

The compromises brokered with a triumphant Clive Palmer is a direct reversal of the Coalition’s election pledges.

Negotiations between the Palmer United Party - which controls four votes in the Senate - and Environment Minister Greg Hunt allowed Clive Palmer to again demonstrate how he likes to ride in at the last minute to force a deal.

“The thing about Australia is we’ve got divisive politics,” said Mr Palmer.

“We’ve brought the country together especially on something as important as the environment.”

And Minister Hunt said: “One of our signature policies is being achieved.”

The Government’s plan for carbon emission reduction was to remove Labor’s carbon price and star a range of projects including planting millions of trees and recruiting a a Green Army to be deployed on environmental projects.

Clive Palmer with Greg Hunt after their major climate policy announcement at Parliament House in Canberra. Picture: Gary Ramage.

The most controversial measure was for a $2.55 billion Emissions Reduction Fund which would be used to pay emitters to reduce their pollution.

That could not get through the Senate until the PUP deal announced tonight.

Mr Hunt said it was a victory for the Government because it was expected the ERF would never get through Parliament.

But there remains the tricky business of the ETS - even a hypothetical one - which the Abbott government had strongly rejected.

“I think we have kept alive an ETS and from our perspective, once our trading partners have an ETS it’s fundamental that Australia have one,” said Mr Palmer.

“Because if we don’t we’ll be saddled with a tariff effectively to the export of products to those markets.

“From an environmental and commercial view we think these things should happen.”

Prime Minister Abbott, asked whether a deal with Mr Palmer was likely, told Parliament Direct Action was an election promise the Government wanted to implement.

“We took a policy to the election, which was to save the Australian people from the pernicious carbon tax but to tackle climate change through a direct action policy that would result in more trees, better soils and smarter technology,” he said.

“And we continue to try to secure the passage of that legislation through the Senate.

“That is our objective. To try to ensure that this Parliament recognises the mandate that this Government sought and this Government got at the election.”

Opposition Leader Bill Shorten accused Mr Abbott of selling his soul to Mr Palmer in a “dirty deal that will send Australia backwards”.

“Direct Action is a stupid and reckless policy that will achieve less but cost Australians more. Malcolm Turnbull got it right when he called Direct Action a farce and a fig leaf,” said Mr Shorten.

“It’s clear that it’s Prime Minister Palmer calling the shots in this government.

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