Did the second ERF auction do enough?
The second Emissions Reduction Fund (ERF) auction, conducted by the Clean Energy Regulator last week, awarded contracts for 45.5 million tonnes of emissions reduction at an average price of $12.25 per tonne.
Contracts were awarded to 77 organisations covering 129 projects, ranging from one to 10 years in length, for a total value of almost $557 million. These included 48 projects developed by Climate Friendly, the South Pole Group and their partners Australian Carbon Traders and Natural Carbon, one of which is being led by none other than former cricketer turned farmer Glenn McGrath.
McGrath, who grazes sheep and cattle near Engonnia, NSW, has recently implemented a management regime to control grazing, support native plant regeneration and exclude feral animals. The former Farmer of the Year Ambassador explained, “These regeneration projects are a great opportunity for farmers and landholders to increase the productivity of their land as well as providing a long-term income stream."
In total, regeneration projects developed by Climate Friendly for the second ERF auction cover a total project area of over 1.8 million ha. This represents an area bigger than Kakadu National Park in Australia's tropical north and about half the size of Switzerland.
Minister for the Environment Greg Hunt noted that the second ERF auction delivered a lower average cost per tonne of abatement than the first auction, where 47 million tonnes of emissions reduction were secured at $13.95 a tonne. The government has so far secured 92.8 million tonnes of emissions reduction through the ERF at an average price of $13.12.
But the Australian Greens have been critical of the policy, with Senator Larissa Waters stating, “The government's climate policy is a massive cost shift from the polluters to the public, since they axed the obligation on polluters to pay for their pollution."
Hunt defended the ERF, saying the average carbon abatement price of $13.12 a tonne is 1% of the cost under the carbon price. But Waters has hit back, saying the auction results will achieve pollution reduction of 1% of the expected emissions from the recently approved Adani Carmichael coal mine in Queensland.
“This massive mine is set to become the Southern Hemisphere's largest, producing 4.7 billion tonnes of pollution over its lifetime, while today's ERF auction purchased just 45 million tonnes," Waters said.
“To reduce our emissions in line with what the science is calling for, big polluters, not taxpayers, should pay.
“Many of the projects paid for today were already underway under the carbon price with polluters funding them — now taxpayers are footing the bill for these mostly landfill and land-based abatement projects.
“The taxpayer handout is also undermined by the weak 'safeguard' mechanism which sees companies allowed to pollute more overall, even as they accept hundreds of millions from government," Senator Waters concluded.
Information about the contracts awarded as part of the second ERF auction is available here.
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