The “Subsidies for Polluters” policy was released by the Opposition on 2 February 2010.

At its core was the Emissions Reduction Fund – a fund that would use taxpayers’ money to pay polluters.

The policy also reaffirmed the Coalition’s commitment to the bipartisan target of reducing Australia’s carbon pollution by 5 per cent on 2000 levels by 2020.

Around the time of the release the Government asked the Department of Climate Change and Energy Efficiency to analyse the policy.

That analysis found the Emissions Reduction Fund component of the scheme could not reach the required level of abatement to achieve the bipartisan pollution reduction targets.

The analysis states that Australia would need to buy international carbon permits to meet the 5 per cent reduction target under the Coalition’s policy.

A Departmental brief explaining this was released in February 2010. Further detail was tabled on 25 May 2010.

Following the release of the Opposition policy the Shadow Minister for Climate Action said the Coalition would source abatement at the cheapest cost:

“We have unashamedly tried to source the cheapest abatement because once verified, a tonne of carbon is a tonne of carbon. And that is all the planet knows.” (Greg Hunt, National Press Club, February 2010)

Subsequent analysis estimated the cost of purchasing international permits to ensure the Coalition could meet the 5 per cent target in the context of the increase in Australia’s abatement challenge.

This showed the cost to taxpayers would be $30 billion – meaning the average family would be $720 a year worse off under the subsidies for polluters policy.

Then, on 12 July 2011, the Opposition Leader ruled out the use of international permits:

Our 5 per cent target is to be achieved entirely within Australia, no taxpayers’ funds would be spent overseas under the policy we announced. (Tony Abbott 12 July 2011)

In the light of this, further analysis was conducted on the cost of achieving the 5 per cent pollution reduction target under the Coalition’s policy with no international linking.

This analysis revealed the far higher cost of $1,300 per household – which is the number I referred to yesterday in Parliament and which was reported in the media on 23 July 2011.

By ruling out the use of international permits, the Coalition has increased the already-substantial cost to the Budget of its policy.

The Coalition has not provided any satisfactory explanation of how they will achieve the bipartisan 5 per cent target without international linking and what the cost to the taxpayer will be.