Wednesday, November 04, 2015

Libs Secret "Direct Auction" Scam

Direct Action: Concerns over secrecy surrounding carbon auction process

Experts say they are concerned over a lack of transparency about the use of billions of taxpayer dollars in the Government's Direct Action climate policy.

Key points

  • Second Emissions Reduction Fund auction starts today
  • Concerns about secrecy over how billions of dollars will be allocated
  • Claims taxpayers will foot bill for schemes that would happen anyway
  • Regulator defends use of closed bids
  • The second round of funding available under the centrepiece of Direct Action, the Emissions Reduction Fund, goes under the hammer today.

The online auction will see companies competing to place the lowest bid for payment to do projects that will reduce Australia's greenhouse gas emissions.

Hugh Grossman, executive director of Energy and Carbon Markets for market analyst firm Reputex, said this round could see as much as a billion dollars allocated. But he has concerns that the process of handing out taxpayers' money is not transparent.

"The way the ERF has been structured is very much to create an opaque sort of market setting where it's sort of a secret tender process. There is no transparent market price," he said.

He said a more open auction system would give companies more certainty, and deliver better value for money for taxpayers.

"I think the one thing that transparency does is that it fosters confidence in the market, so if you're a company, particularly a high-emitting company, you're looking at creating abatement over the long term — and that's not just next year, that's over the next 10 or 15 years.

"So I think transparency over a market price and the ability to predict what that price will be in five or 10 years is certainly healthy."

Iain MacGill, a director of the University of New South Wales' centre for energy and environmental markets, shares Mr Grossman's concerns.

"It's very problematic with the Emissions Reduction Fund is that its transparency is very low," he said.

"That means that if it's working or not, it's hard to say. And that's a real problem."

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