White Paper to Draft Legislation – ERF

In case you have not heard: The Clean Energy Regulator survives – it was an error the government has corrected on 7 May 2014. What was intended was to say the Clean Energy Fund is gone. Thank you Greg Hunt for your courage in having that clarified.

It is also hoped you heard late Friday 9th May 2014 the Federal Government released its exposure draft legislation for the Emissions Reduction Fund. They want you to be quick in responding -Two weeks have been given for the review, with submissions due EST 12 noon, Friday 23 May 2014.

The key matter is the draft legislation rebadges the Carbon Credits (Carbon Farming Initiative) Act. And:

  • A broader range of activities can create “carbon abatement” and include avoidance activities
  • A broader definition of additionality is given
  • A broadening of the authority of the Clean Energy Regulator
  • Establishing the Emissions Reduction Assurance Committee
  • Establishing that a yet to be (re)named CFI audit legislation will carry through the audit and assurance through the existing CFI audit legislation.

Why hoped you heard – well we did not want you going to sleep on us because we are boring!

Those that see opportunity are, for instance:

Currently celebrating their 30th year – Energetics consult and offer fee for service activities, and they say:

  • Immediately assess the abatement opportunities you have to create emission reductions to sell into the ERF
  • Understand your risk profile for future capital investments – has this shifted?
  • Assume you need a shadow carbon price
  • Comment on the draft legislation.

Of course the issue for their advise is for you to work out – www.energetics.com.au.

Those that see tragedy are, for instance:

The Climate Spectator www.businessspectator.com.au say,

“Half-baked outline

The half-baked nature of this scheme is revealed on the very first page of descriptive text within the Explanatory Memorandum, where it states:

The Emissions Reduction Fund … will allow businesses, local governments, community organisations and individuals to undertake approved emissions reduction projects and to seek funding from the government for those projects through a reverse auction or other purchasing process.

Government ignores its own red tape cutting advice

I was shocked to find no regulatory impact statement accompanying the ERF legislation, comparing this scheme against alternatives and why it represented a superior cost-benefit case.

Amidst a bonfire of red tape, the government had assured us that they were going to force public servants to see regulation in a ‘new light’ by following a seven-step guide to evaluating new regulations.”

Then finish off saying “I wonder when we’ll see the detailed cost-benefit analysis for the ERF relative to other regulatory alternatives, such as a simple price on carbon emissions.”

For CO2Land org the ‘scary spice’ is the mechanisms can change at any time at the whim of government – regardless of the pain you the business offered or suffered. Again the need for consistent policy is far greater than the words spoken to date. We also tend to agree with one aspect of Energetics spiel – prepare your alternatives. Just in case. And, you don’t have long to comment.

 

 

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