International carbon permits could be fast tracked in Australia
The newly elected Turnbull Government is considering fast tracking a scheme that would allow large carbon emitters to purchase international permits, that offset their emissions. Former Prime Minister, Tony Abbott, did not back international carbon permits, however the Abbott Government left the door open for the Turnbull Government to review the purchasing of permits in 2017 to 2018, as part of Australia's Direct Action Scheme to combat climate change. If fast tracked, purchasing of international permits could start as early as mid-2016, protected by a Government safeguard mechanism, which regulates the country's ﻿top 140 largest carbon emitters. 

There has been no direct discussion about the international permits being moved forward, but it is strong possibility given the support for the scheme, including from Mr Hunt and senior Nationals MPs.

Under the Coalition's safeguard mechanism policy – which is supposed to stop rogue emitters from negating reductions in other parts of the economy – companies will be penalised for exceeding emissions baselines. The purchase of international permits would allow them to offset any potential rise in their emissions.

Mr Hunt said there had been no decision on changes to international permits, but he backed a closer integration of the Coalition's climate policies. "There has been no discussion, let alone any decision on permits," he said in an interview.

Sustainable climate policy goal

"For me the goal is to leave us with a fully sustainable climate policy and bring all the levers – including the Emissions Reduction Fund and the safeguard mechanism – working together."

Some have criticised the federal government's carbon rules as "all gums, no teeth", which would allow big polluters to increase their emissions without penalty. They said the emissions baselines should be lowered to force companies to change their behaviour and cut emissions.

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A study by Melbourne-based carbon consultancy RepuTex in August found that only 30 of the largest 150 polluters will be required to reduce their carbon emissions under the existing safeguard mechanism rules.

Grattan Institute's energy program director Tony Wood said an international permit scheme made environmental and economic sense, provided they weren't "gamed" by companies.

"My view is, provided they have integrity I can't see why you wouldn't use international permits as part of any mitigation strategy. It would be a logical thing to do," he said.

"The only problem is if there is gaming by a company that could use international permits instead of meeting their domestic contract."

Mr Hunt said the safeguard mechanism – which applies to 330 facilities owned by 140 companies whose emissions top 100,000 tonnes of carbon each year – was always designed to be flexible.

The second round of auctions from the Emissions Reduction Fund – which pays polluters to reduce reductions – is next month. In the first auction in April, 43 companies were paid $660 million to eliminate 47 million tonnes of carbon from projects including forestation, soil carbon, savanna burning and methane from piggeries.

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The new government has beefed-up Mr Hunt's responsibilities ahead of crucial international climate talks in Paris later this year.

Although Mr Hunt, a Victorian, backed Mr Abbott in last week's leadership ballot, he has emerged from the cabinet reshuffle with greater powers, including overall responsibility for the new Cities and Built Environment portfolios being taken on by junior minister Jamie Briggs.

The yet-to-be-finalised cities agenda is expected to focus on long-term planning for cities up to 2050, transport – including a greater focus on public transport and road design to deal with congestion – and the "greening" of cities.

The new role is expected to involve close cooperation with state and local governments on long-term planning for capital cities and bigger regional centres.

Mr Turnbull, who has long been an advocate of sustainable city development, will also be keeping a close eye on the plans. It is yet to be decided whether federal funding would be tied to particular planning outcomes.

Mr Hunt said the cities agenda would be developed quickly. "The mechanisms will be developed over coming months. We don't want to sit on our hands and we will look at models from across the world and then come back with a plan of action," he said.

"We start from the base that our cities are [among] the world's most liveable but that's a relative, not an absolute concept. With population growth the goal is to keep them in relative terms on top of the world but in absolute terms to continue to improve them."