The Hon. Greg Hunt MP

Minister for the Environment

The Hon. Greg Hunt MP

Minister for the Environment

Green paper: Taking strong action to cut emissions without a carbon tax

Media release
20 December 2013

The Government has today released the Emissions Reduction Fund Green Paper, setting out a cost-effective, practical and simple approach to reduce our national emissions without a multi-billion dollar carbon tax.

The Emissions Reduction Fund is the centre piece of the Australian Government’s Direct Action Plan to cut emissions to five per cent below 2000 levels by 2020. This will be achieved while at the same time protecting jobs and Australia’s international competiveness.

The Green Paper reflects the Government’s detailed and widespread consultation with business and the community, incorporating views from across the economy, including mining, manufacturing, transport, power and agricultural businesses, local councils and environment groups.

Almost 300 submissions were received on the Terms of Reference for the Emissions Reduction Fund and these have been important in shaping the Government’s Green Paper.

The Emissions Reduction Fund will commence on 1 July 2014 to coincide with the scrapping of the carbon tax.

Through the Emissions Reduction Fund the Government wants to encourage low-cost, effective emissions reduction opportunities – unlike the carbon tax which is a high-cost, ineffective approach that does not cut emissions over the long-term.

The sources of low-cost emissions reductions can come from a wide range of projects and measures. It might be projects to clean up power stations or capture landfill gas. It could be energy efficiency improvements in commercial buildings or improvements in agricultural soils.

The Clean Energy Regulator will issue credits for emissions reductions that are measured and verified using approved methods. The Government will purchase the lowest cost abatement through a reverse auction, secured by a forward contract.

Businesses can propose the quantity and price of emissions reductions they are willing to offer. The Clean Energy Regulator will rank offers and select the lowest-cost bids.

The Emissions Reduction Fund will help drive private sector investment to achieve emissions reductions.

The important thing is that emissions reductions are real, measurable and additional to business as usual. Funding will not be provided for activities that are already occurring as part of normal business practice.

We have listened to industry and taken care to develop a streamlined approach to achieving emissions reductions that will help Australia meet its 2020 emissions target.

Achieving Australia’s domestic emissions reduction target through the Emissions Reduction Fund will cost $300m, $500m and $750m over the forward estimates, with funding out to 2020.

The Government has established an Expert Reference Group to provide advice on the design of the Emissions Reduction Fund. The Group consists of leading industry and academic experts.

The Government invites comment on the Green Paper until 21 February 2014. Submissions will inform the development of a White Paper, to be released shortly after submissions have been assessed.

The Green Paper and details on how to make a submission are available on the Department of the Environment’s website at

Greg Hunt



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