OPPOSITION Leader Tony Abbott - clearly a man who relishes a sporting challenge - has set himself a mighty task.
Abbott's challenge, self-inflicted, is to deliver the same greenhouse gas cuts adopted by Labor, with no emissions trading scheme, no carbon tax and no harm to the coal sector.
Greg Hunt, the Opposition's new ''climate action'' spokesman, has the unenviable job of devising a plan by February. Hunt is only too aware there are no simple answers, but is confident he can come up with a better solution than Labor's juggernaut emissions trading scheme.
''There are no cost-free options, but there are - and this is the big point of difference … dramatically more efficient and dramatically lower cost options,'' Hunt told The Sunday Age.
Ask economists about tackling climate change and most will tell you that ''market based'' solutions are best. They might explain that carbon taxes are good because they are efficient. Since polluters are charged a fixed rate for each tonne of pollution they pump out, they will always have an incentive to cut their emissions as long as this is a cheaper option than paying the tax.
The argument is that in the pure world of economic theory, emissions trading schemes are even better. First, because they are efficient. As with carbon taxes, abatement happens at ''least cost''. In this case, polluters have an incentive to cut emissions to avoid buying permits in the first place, or to make money by selling those they no longer need.
The bonus is that, unlike carbon taxes, emissions trading schemes produce a guaranteed cut. Want to achieve a 5 per cent cut on emissions? Simply auction 5 per cent fewer permits than the status quo.
The least efficient strategies, the argument goes, are the old-style regulatory ''command and control'' solutions, whereby governments use their muscle and pockets to change behaviour. Governments are bad at ''picking winners''. Who are they to decide that one regulation, for example, forcing vehicle producers to have mandatory efficiency standards, is better than another, such as stipulating that 20 per cent of our electricity must be generated using renewable technology?
Case closed then, right? The Opposition should just get on with it and support the Government's horribly named ''carbon pollution reduction scheme''. Or perhaps not.
The problem with the Rudd Government's scheme is that many economists now argue it has become so watered down by concessions to special interest groups and incumbent polluters with highly paid lobbyists that the market signal has been dulled to the point of meaninglessness.
''The idea that it's a scheme with 'broad coverage' that delivers least cost abatement is just bizarre,'' says the Australia Institute's Richard Denniss. As Denniss points out, there are three main sources of greenhouse gas emissions in Australia: electricity, farming, and transport.
''The [carbon pollution reduction scheme] doesn't apply to agriculture, the transport sector is virtually excluded due to [offsetting] reductions in the fuel excise, and it doesn't actually lead to the shut down of any coal fired power stations,'' says Denniss.
Similar criticisms have been levelled by the Government's former hired climate gun Professor Ross Garnaut, who last year delivered a blueprint for what might be regarded as an economic pure emissions trading scheme. ''I think this whole process of policy making over the ETS has been one of the worst examples of policy making we have seen on major issues in Australia,'' he said recently. Federal Treasury's own economic modelling on the scheme is also instructive. Treasury figures analysed by The Australia Institute show it is clear that Treasury does not believe the scheme will do much to cut domestically produced emissions, which are expected to plateau for the next two decades, any time soon.
The Treasury figures shows big business is instead expected to respond to the scheme by buying cheap permits from foreigners, allowing them to continue producing as normal.
Emissions from black and brown coal are not expected to fall until about 2033 and when they do, Treasury seems to believe it will be because of the sudden commercialisation of as yet unproven clean coal technology.
This brings us back to Tony Abbott, who recently described the science of climate change as ''crap''. Abbott is either being brave or disingenuous to suggest he can make large cuts to greenhouse gas emissions without a carbon tax, without an emissions trading scheme and without any significant cost to taxpayers.
One way or another consumers will pay, either through a ''whopping great big emissions tax'' (to use Abbott's phase), or through higher Government spending. It's just a question of which approach will prove the best. Ironically, it is the Liberal Party - with its ''hands off the economy'' free-market ideology - that wants to take Australian down the ''command and control'' path that is as a general rule least favoured by economists.
Hunt describes this approach as ''direct action'', with a priority on solar, wind and geothermal energy, and greater use of gas rather than coal, as well as the use of trees and soil to capture carbon.
Hunt claims there is scope to cut Australia's annual output of greenhouse gasses, currently equivalent to around 600 million tonnes of carbon dioxide, by about 150 million tonnes using soil and trees to store carbon. Energy efficiency measures could deliver further savings of between 30 million tonnes and 50 million tonnes, before even factoring in savings from renewable energy.
He draws on a recent report by the Wentworth Group of Concerned Scientists. The study, released in October, estimated that tree planting, a halt to land clearing, and soil carbon schemes such as biochar could cut emissions by about 25 per cent by 2020.
But Hunt's hopes suffered a blow recently when the Group wrote to Abbott claiming it was ''absurd'' to think Australia could make the sort of deep emissions cuts needed to solve the climate problem without a market-based mechanism such as a carbon tax or emissions trading scheme.
The Opposition remains a long way short of developing a viable policy. The unanswered question is whether its ''direct approach'' is not only feasible, but cheaper than the Rudd Government's bastardised emissions trading scheme.
Hunt remains adamant that there is plenty of low hanging fruit that could produce dramatic cuts for a relatively low price. Some senior members of the Coalition are also talking about the possibility of nuclear power, a conversation Abbott claims he is prepared to have with the public. Given nuclear power is thought to be up to 50 per cent more expensive than conventional power, it would either require massive public subsidies or a hefty price on carbon, which would in turn require one of the market-based mechanisms dismissed by the Coalition.
Labor's scheme may be flawed. But the reality is that at some point in the near future the public will also start demanding some genuine answers from the Coalition.
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