Business and the community now have an opportunity to shape the Emissions Reduction Fund, the centrepiece of the Federal Government's Direct Action Plan to combat climate change.
The Emissions Reduction Fund is intended to purchase low cost abatement through reverse auctions and work with the Carbon Farming Initiative. Terms of reference for its design were released today, asking for comments on:
- the likely sources of low cost, large scale abatement to come forward under the Emissions Reduction Fund;
- how the Emissions Reduction Fund can facilitate the development of abatement projects, including through expanding the Carbon Farming Initiative and drawing on the National Greenhouse and Energy Reporting Scheme;
- the details of auction arrangements to deliver cost effective outcomes;
- the governance arrangements that will support the Emissions Reduction Fund, including the role of key institutions such as the Clean Energy Regulator;
- the details of the monitoring, verification, compliance and payments arrangements for
- successful bidders at auction;
- transitional issues relating to the existing Carbon Farming Initiative; and
- the design and operation of a mechanism applying to emissions above the business as usual baseline.
The Terms of Reference come one day after the draft bills to repeal the carbon tax were released for comment. The last piece of the puzzle, Australia’s Renewable Energy Target, will be reviewed next year in a separate consultative process.
When will the Emissions Reduction Fund begin operations?
The Emissions Reduction Fund is intended to go live on 1 July 2014, after three rounds of consultation:
- 5pm (AEDT) Monday 18 November 2013: comments on these Terms of Reference are due.
- December 2013: an Emissions Reduction Fund Green Paper will be released; and
- early 2014: the Green Paper will be followed by a White Paper and Exposure Draft legislation for further public consultation.