Coalition to add $1bn to climate fund

The Coalition is planning to add $1 billion to the government’s Emis­sions Reduction Fund as part of its new direct action plan.

Matt Canavan and Angus Taylor seized on new modelling saying Labor’s emissions reduction target would lift power prices. Picture Gary Ramage

The Coalition is returning to Tony Abbott’s climate change playbook, attacking Labor’s 45 per cent emissions reduction target as a “great big new tax” on wages and power prices, as it puts the finishing touches on a new direct action plan to fund tree-planting and soil-carbon improvements by farmers.

It’s understood the plan, being put together by Environment Minister Melissa Price, would ­involve a top-up of more than $1 billion to the government’s Emis­sions Reduction Fund, which has been depleted from an initial $2.5bn to about $226 million.

The funding boost for the key direct action measure will be used to blunt Labor’s claims to be the only party committed to tackling climate change, while offering practical benefits for farmers and regional communities.

It comes as a new climate change alliance between green groups, forestry and farm organisations ramps up pressure for an enhanced carbon-farming initiative under the ERF.

Greening Australia, the Australian Forestry Products Association, the Red Meat Advisory Council and Farmers for Climate Action met Agriculture Minister David Littleproud and senior Labor frontbenchers in Canberra this week urging extra support for farmers to cut carbon emissions.

Energy Minister Angus Taylor and Resources Minister Matt Canavan yesterday seized on new ­independent modelling showing Labor’s 45 per cent emissions-­reduction target would push up power prices by 50 per cent, cost workers $9000 a year in lower wages and wipe $472bn from the economy, saying the findings were “just common sense”.

“What Labor is doing is putting in another great big new tax on your power bills, on your job, to make it harder for businesses to operate in this country,” Senator Canavan said.

The modelling by former head of the Australian Bureau of Agriculture and Resource Economics Brian Fisher found the Coalition’s commitment to a 26-28 per cent emissions reduction would not be without economic pain, causing $70bn in cumulative economic losses by 2030 and a 2 per cent hit to real wage growth.

Mr Taylor said the government did not pretend cutting emissions was free.

“The Emissions Reduction Fund, a very successful program under this government, has costs attached to it. They are low costs,” he said.

The opposition environment spokes­man, Mark Butler, said Dr Fisher’s modelling was based on “pure speculation” of the impact of Labor’s climate change policies.

He said modelling by Reputex on Labor’s 45 per cent emissions-reduction target had shown it would cut wholesale power prices by 25 per cent, while driving job-creating investment in renewables. “Australians … are crying out for real, credible, well-designed ­climate and energy policies, and that is exactly what a Shorten Labor government will deliver,” Mr Butler said.

But Australian National University economist Warwick McKibbin endorsed Dr Fisher as “highly credible”, and said Dr ­Fisher’s numbers lined up with his own findings in a recent Brookings Institute study.

Mr Abbott attacked Labor’s carbon tax as a “great big tax on everything”, winning the 2013 election on a promise to scrap the policy.

Under the Abbott government’s direct action plan, financial incentives were provided through the ERF for businesses to cut carbon emissions. A review of the policy found about two-thirds of emissions reductions were as a ­result of avoided deforestation and changing the timing of indigenous savanna burning.

A State of the Forests Report released yesterday revealed Australia’s forest area was 134 million hectares, up by almost four million hectares over the past five years.