ALP's CO2 emissions policy draws fire

Less than a fortnight out from the federal election, Angus Taylor, the federal minister for energy, has dismissed a key plank in Labor's automotive industry policy as 'reckless'.

In a press release issued this morning, the minister described this initiative – the 105g/km CO2 emissions cap to be introduced by 2025 – as a "$3 billion tax on our top 10 car retailers," based on modelling undertaken by the Australian Automobile Association (AAA) in 2017.

The press release was critical of the ALP for imposing legislation that would bump up the price of a new car by $5000, a figure determined by the Centre of International Economics. Non-compliant vehicles failing to meet the required standard would incur a fine ranging between $1770 and $4000.

Either way, the press release argues, the Labor CO2 cap would cost the importers and that cost would be passed on to the consumer – the new-car buyer.

"Once again, Bill Shorten and Labor are not being straight with Australians when it comes to telling them what his reckless emission policies mean for families and our economy," the minister's press release reads.

The press release cites multiple reports published by the Daily Telegraph to back its case against the ALP for policies to mandate vehicle recharging facilities for every new home, driving 'iconic' vehicles out of the market and raising the price of a new car by $5000.

"Bill Shorten has run out of excuses on why he's dodging answering questions about the cost of his reckless emissions target."

The AAA, the body that published the modelling data in August 2017, has issued its own press release today, taking an opposing position to the ALP's platform, but with the added wrinkle that Labor's policy was shared with the Coalition at the time the modelling data was published.

In the AAA's statement, the Association confirmed that fines for non-compliance would total $3 billion and the target "would fail to deliver either the promised emissions reductions or fuel savings."

The AAA argues that the vehicle importers would continue to sell non-compliant vehicles if they remained popular in the local market, with buyers subsidising the fine.

"Two years after commissioning the report, the AAA is concerned that neither the Government nor the Opposition is offering voters clarity on their respective vehicle emission reduction timelines and the associated costs," the AAA stated in the press release.

"Australia's peak motoring body encourages both sides of politics to ensure that, before election day, voters understand the costs and benefits associated with their respective policy positions.

"Despite the unavoidable costs involved, the AAA is a strong supporter of technology-neutral policies that can support the development of a cleaner fleet – via the introduction of a CO2 standard, stronger noxious emissions standards, and improved Fuel Quality standards.

"These policy issues – as well as the need to sustainably integrate cleaner vehicles into the tax system – are interrelated. Therefore, they must be addressed in a considered and comprehensive manner.

"The AAA calls on all parties to commit to a balanced policy – with full details made public – that meaningfully curbs emissions without dramatically reducing vehicle choice or imposing significant cost burdens on consumers."

However, the ALP is not without friends on its side of the argument. The Electric Vehicle Council has reacted strongly to the Daily Telegraph's story concerning the cost of the automotive emissions cap for CO2. In its own press release the Council mounted an argument contradicting that of the AAA.

"Labor's proposed efficiency standards are relatively conservative when viewed in the global context," Electric Vehicle Council CEO Behyad Jafari was quoted as saying in the press release.

"The extremist position would be to retain the emission free-for-all that currently exists. Australia is one of the only developed nations without a fuel efficiency standard in place.

"What this means is that Australia becomes a magnet for fuel-guzzling, high-emission vehicles. So without emissions standards you know who bears the cost? Australian drivers when they fill up.

"Labor's policy on efficiency standards would only bring Australia into the global pack. The US and the EU have had efficiency standards for a generation now.

"Debating the introduction of well-established standards that are proven to bring down costs for drivers makes Australia an international laughing stock.

"Like most things in life, there is a cost to action and a cost to inaction. In this case it's abundantly clear to any impartial observer that the cost of inaction is much greater."

Jafari also recounted the federal treasurer's previous support for fuel efficiency standards.

"Treasurer Josh Frydenberg knows the real equation here. That's why he said in 2017 that if Australia had fuel efficiency standards in line with comparable nations, ‘estimates of the fuel saving per passenger vehicle could be above $500 per year, or nearly $28bn in total by 2040'."