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Full election coverageElection Live with Stephanie PeatlingFull list of Fact CheckersAll the dirt on carbonClimate of uncertainty The claim Can "direct action" cut Australia's carbon emissions for the price Tony Abbott says it can? Climate change minister Mark Butler says not. Last week he welcomed “new independent modelling”, which he said showed the Coalition's policy would "cost billions of dollars more than Tony Abbott claims and has no chance of meeting Australia's emissions reduction target". He highlighted this finding: “To achieve the emissions reductions required to deliver the Coalition's commitment to the 5-25 per cent targets would require additional expenditure of $4-$15 billion to 2020." Advertisement Is he right? Can Labor claim that the Coalition has a new hole in its costings? Supporting evidence The Climate Institute based its report "in large part" on modelling undertaken by the energy consultancy company SKM-MMA and Monash University's Centre for Policy Studies. Deputy chief executive Erwin Jackson told PolitiFact the assumptions were generous to the Coalition's policy of funding “direct action”. "One of those assumptions was that every project the Coalition funds would be delivered, and would achieve reductions in emissions that wouldn't have otherwise taken place.” Jackson says the lesson from similar schemes overseas is that only 75 per cent of projects will deliver what they say they will. Here's how direct action works. The principle mechanism is the Emissions Reduction Fund, which pays polluters to cut emissions. It hands out grants after polluters place bids. It also hits companies that pollute above an agreed baseline with penalties. The baseline penalises companies that pollute above a "business as usual" level. There's no detail yet on that part of the policy. Hunt says that Direct Action assumes no revenue, which suggests this part of the policy might not be enacted at all, or might be so effective that no one pays a penalty. For the most part, Butler has summarised the modelling correctly. It says the Coalition's spending outlay ($3.2 billion over four years) would not be sufficient to hit the reduction target of 5 per cent. That spending, announced before the 2010 election,[url=http://www.ugg-boots-sale.org]ugg outlet[/url], consisted of $2.55 billion for the ERF over the first four years and then $1.2 billion each year to 2020. Three years later, we don't yet know if the Coalition would increase that to make up for lost time. The report finds a further $4 billion would be required to hit the 5 per cent emission reduction target - that's if the Coalition sticks to its plan to only target emissions reduction in Australia. If it attempted to hit the target using international offsets, as the government's carbon-price mechanism does, then it might require only $190 million, but the Coalition says it will only cut emissions in Australia. The report predicts that the Coalition's policy, left unchanged at the advised amount of funding, will lead to a 9 per cent rise in emissions by 2020, and 20 per cent by 2030. Does it stack up? There are reasons to think the Climate Institute has been generous. Treasury has said around one-third of the cuts the government will subsidise under Direct Action would have been done anyway, which means the cost of "genuine" abatement increases. Jackson says it also fears "information will leak out into the public domain" about how much companies are being paid for abatement projects. This might push up the price polluters would ask for. Although the Coalition says the findings are "the most far-fetched", the study come up with a lower cost of abatement per tonne than any other studies. It says the marginal cost would be $30 a tonne by 2020. The Department of Climate Change estimates $50 a tonne. Treasury's modelling predicts $80 a tonne under direct action. That's just to get to the agreed 5 per cent reduction. In February the Climate Authority is expected to recommend a higher target (the speculation centres on 15 per cent). But Abbott has promised to abolish the Climate Authority, meaning this might not present a problem. Politifact asked the Coalition for alternative modelling that supports its claim that its direct action program can meet its target. Wendy Black, from opposition climate change spokesman Greg Hunt's office, said a range of reports indicated direct action could achieve significant abatement, but did not specify any. The official statement from Hunt has wiggle room. The Coalition is "confident" its policy can meet the 5 per cent emission reduction target. She said the organisation Climateworks – a joint venture between the Myer Foundation and Monash University - points to the opportunities offered by energy efficiency, which indeed it does. Its 2013 report "Tracking Progress Towards a Low Carbon Economy" says that if current trends continue, Australia will be 40 per cent of the way to meeting its target by 2020. But it doesn't mention direct action. Black also referred us to a Frontier Economics report that the Coalition says is a "devastating analysis" of the carbon tax, but its managing director,[url=http://www.ugg-boots-sale.org]cheap ugg[/url], Danny Price, has publicly distanced himself from the Coalition's policy, telling Fairfax Media: "All I'd said was that their numbers added up, I didn't say I supported it." Finding Mark Butler says Direct Action will cost at least $4 billion more than the Coalition reckons, and has no chance of meeting its target. The report he cites helps back this up. But it is not quite fair to say Direct Action would go over budget and miss the emissions target. It would do either one or the other. The spending would either remain capped, most likely leaving the target missed, or more would be spent and the target met. It is not enough for politicians to claim a policy is costed because they've announced how much they will spend. Costing also involves measuring whether the amount you've budgeted is enough to achieve the target you have set. It is very difficult to ascribe absolute truth to a prediction. At this point, Butler has much more data on his side than Hunt. A Politifact rating of "mostly true" applies where a statement is accurate but needs clarification or additional information. We rate Butler's claim that “new independent modelling has shown the Coalition's alternative climate change policy will cost billions of dollars more than Tony Abbott claims and has no chance of meeting Australia's emissions reduction target” mostly true. Details at www.politifact.com.au Fairfax is partnering with the Pulitzer-prize winning service PolitiFact during the election campaign. Its Australian arm politifact.com.au uses the same rigorous methodology as its US parent to rate the accuracy of claims by elected officials and other influential people in the Australian political debate. Twitter: @1petermartin @PolitiFactOz
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