In this On Point Analysis, we examine the proposed structure of the Coalition’s Direct Action Plan and analyse the operation of key policy settings, such as absolute versus emissions intensity baselines, penalty prices and the use of offsets.
The upcoming federal election looms as a key event in shaping Australia’s policy to achieve its long term emissions reduction objectives. While the Labor Party and the Coalition agree on Australia’s emissions reduction target of 5 per cent on 2000 levels by 2020, the parties are split on the best approach to regulate emissions, with the government favouring a ‘cap and trade’ carbon price mechanism, while the Coalition supports an incentive based ‘reverse auction’ scheme, where companies bid for government grants to reduce emissions.