The Climate Change Authority has released the final report on its triennial review of the Federal Government's Emissions Reduction Fund (ERF), finding that the ERF is “ generally performing well” and has “successfully incentivised new domestic abatement at low cost that will help contribute to Australia meeting its international target commitments”.
The ERF is an emissions reduction offsets scheme combined with Government purchasing of abatement, which has been accomplished to date through competitive auctions. As of 16 November 2017, the ERF had contracted 189 million tonnes of emissions reductions at a cost of $2.23 billion and around $300 million remained.
The CCA's review focused on the operational aspects of the ERF, in particular whether the scheme is well administered and delivering low cost and genuine emissions reductions.
The review concluded that the ERF has effective compliance architecture that supports both the crediting and purchasing arms of the measure.
However, it maintains the view that that ERF purchasing will need to perform less of Australia’s emissions reduction task over time and that other policies will need to take up the challenge of decarbonising Australia’s economy and deliver structural change.
“That said, the investment by both Government and the private sector in offsets through the Carbon Farming Initiative and now the ERF should be built on as part of the policy tool kit Australia needs to meet its Paris Agreement goals.”
The full report and list of recommendations are available here.