Do-nothing Malcolm’s Direct Action doing nothing

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From The Guardian:

The federal government’s Direct Action carbon reduction policy appears to be running out of steam, with participation from industry dropping, the cost of the program rising and the budget for emissions reduction nearly exhausted.

The Clean Energy Regulator announced on Thursday it would pay a further $367m to polluting industries, in return for a commitment for them to reduce carbon emissions by 34.4m tonnes.

It is the smallest of four auctions held by the regulator, and leaves about $440m left in the emissions reduction fund for further carbon abatement contracts.

With about 83% of the fund now spent, the federal government’s central climate policy is almost exhausted, with no further funding committed to the program.

At the previous auction in April 2016, the government awarded $516m worth of carbon abatement contracts under the scheme, and achieved a slightly cheaper price per tonne of carbon abatement – $10.23, compared with today’s $10.69.

The reduced amount of money spent in the latest auction, and the higher cost of abatement, appeared to reflect a lack of interest from the industry, with the regulator receiving about half as many bids in this round as it did in April 2016 – 52 bids compared with 103 in the previous auction.

Hugh Grossman, executive director of energy advisory firm RepuTex, said the results showed high emitting companies were losing interest in the scheme.

“Results indicate that interest in the ERF has fallen, with low supply and reduced competition leading to a nominal increase in the average price of abatement, in line with our earlier outlook,” Grossman said.

He said the lack of interest was driven by administrative complexity, a diminishing ERF budget, and the low price being paid for carbon abatement. “This is unlikely to change until compliance obligations are placed on industry to offset their emissions” Grossman said.

The majority of the projects – 24 out of 47 – were for vegetation projects, where farmers are paid to either plant trees, or to not cut them down.

An analysis from earlier this month by the environmental group the Green Institute, found that they would not have cleared the land anyway.

It’s all a part of the Do-nothing plan.

Thank goodness that the Arctic heatwave is a UN conspiracy, from the FT:

Scientists are struggling to understand why a burst of “scary” warming at the North Pole has pushed Arctic temperatures nearly 20C higher than normal for this time of year.

…“We’ve been processing this data since 1958 and we haven’t really seen anything like this at this time of year,” said Rasmus Tonboe, a sea ice expert at the Danish Meteorological Institute. “We are watching the situation and trying to analyse what is going on but it’s very surprising.”

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This had reduced the temperature difference between the Arctic and more southerly regions, causing a “wavier” jet stream — a great river of fast-moving air about 10km above the earth that acts as a barrier separating the North Pole from warmer latitudes.

…“That is scary because it is showing us how rapidly the climate system is changing … We expected for a long time to see the ice disappear and the Arctic warm up and perhaps the jet stream doing bizarre things, but it’s happening much faster than I think anyone expected.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.