Previous: 12. It may allow offsets after all
Several analyses have found the Fund would need to spend up to $35 billion more than budgeted to meet even just the 5% target (let alone a more ambitious target). Under optimistic assumptions, the Climate Institute projects emissions would rise 10% by 2020. Even the Government’s own (pre-election) estimates of total tonnes avoided, total cost, and cost per tonne avoided do not add up. Also, it is incongruous that the timeframe of funding has not been accelerated since the 2010 election despite the fact that the target date is three years closer.
The Government’s confidence that it has budgeted enough money seems to be based solely on assurances from polluting companies eligible for support from the Fund. Such assurances are not reliable, particularly since the price of carbon credits from the Fund will be set by the market so companies may be able to game the price. Thus a strict budget cap will make it extremely unlikely that much emissions reduction will take place.