Abbott’s “Direct Action” policy – costly and ineffective

Banks and big business warn Direct Action will lift costs and deter projects, Short-term incentives offered by the policy ‘will drive up’ the amount Coalition will pay to buy emissions reductions Guardian, Lenore Taylor, political editor. 25 Feb 14, Banks and big business are warning the government the short-term incentives offered by its Direct Action climate policy will deter many projects and drive up the amount the government will have to pay to buy emission reductions.

The government’s new e.missions reduction fund (ERF) is supposed to start buying greenhouse abatement from July through competitive tenders that offer five-year grants to companies and organisations that reduce emissions.

Guardian Australia understands some in the government argued the fund should offer only three-year contracts, as the Coalition has announced specific funding for only the first three years.

A green paper, released late last year, said contracts would be for five years.

But in a submission to government, the Business Council of Australia (BCA) will argue even a five-year period is “of concern” because it could force bids up to cover the cost of projects likely to last more than five years, instead of spreading the costs more evenly over a longer period.

The National Environmental Law Association (Nela) has also warned the government that “a five-year contract term will prove to be a significant inhibitor in terms of ERF participation”.

“In particular, Nela is aware that none of the big four banks are likely to be willing to offer project finance for ERF projects, unless a longer contract term is available,” the association said in its submission on the fund….http://www.theguardian.com/world/2014/feb/24/banks-and-big-business-warn-direct-action-will-lift-costs-and-deter-projects