The Government should not limit itself to abatement that is apparently least-cost. Maximizing the scale, pace, and effectiveness of climate action is far more important than limiting the costs of action. Effective climate policies that mitigate enormous costs from climate change are preferable to climate policies that are cheap and ineffective.
A Fund designed to select the cheapest available abatement risks treating non-equivalent types of emissions and abatement as equivalent, and is unlikely to deem the most important places to cut emissions as the cheapest. In many cases an apparently cheap source of emissions intensity reductions can be less credible or less significant than one with a higher upfront cost. It is most important and urgent to phase out fossil fuel CO2 emissions, the largest and longest-lived cause of global warming.
Many of the Government’s expected sources of emissions cuts are of highly dubious merit in the context of the urgent need to get to zero emissions. Investment in new gas-fired electricity generation would be a terrible mistake, because it would lock in new fossil fuel infrastructure with a lifetime of decades. The same goes for cogeneration and trigeneration. Waste coal mine gas and native forest biomass are waste products of coal mining and deforestation respectively, so their use as energy sources arguably incentivizes those activities. There is no time to wait for new energy technologies such as thorium or carbon capture and storage (CCS), which will not be deployed for decades. Even if CCS works, it shouldn’t be used as an offset for ongoing emissions but for net removal of CO2 from the atmosphere.
Other examples are positive but must be kept in perspective. Phasing out short-lived greenhouse gases such as HFCs should not be considered equivalent to reductions in long-lived fossil fuel CO2 emissions; the former are more powerful at trapping heat but do not linger in the atmosphere for as long as the latter. And energy efficiency can be cancelled out by growth in production and does not address the fundamental problem that most of Australia’s energy currently comes from fossil fuels.
Most problematic of all is soil carbon – see point 11.