RepuTex today released its Carbon Market Update for February, titled “Underestimating Direct Action: The ERF’s Silver Lining”, analysing the domestic emissions reduction potential of the Coalition’s Direct Action Plan, accounting for new design elements presented in the government’s ERF Green Paper, notably:
- The potential application of absolute emissions baselines
- The potential application of a ‘secondary market’ for companies to ‘make- good’ emissions over their baselines by sourcing Australian Carbon Credit Units (ACCUs) as offsets.
Findings indicate that under ‘emissions intensity’ baselines, Direct Action is likely to lead to similar domestic abatement than the Carbon Price Mechanism, while should ‘absolute’ baselines be introduced in conjunction with a secondary offset market, Direct Action may achieve 56 per cent more domestic abatement than the CPM.
Notably, enabling industries to balance emissions increases above business as usual levels via the use offsets – even if calibrated to match historical maximum emissions levels – would result in around 120 Mt more domestic abatement being delivered to the government via a secondary market, with the LNG and Coal industries carrying much of the load.
