Government's emissions reduction fund off to a shaky start

The Government's flagship Emissions Reduction fund which seeks to pay polluters who reduce their emissions was launched this morning as an auction.

Industry polluters made bids on the $2.5 billion fund by committing how much they will reduce emissions by and then setting a price per tonne of carbon. The Government awarded contracts to bidders who offer to reduce carbon at the cheapest price.

However analysts who established the model have admitted they cannot see the scheme working.

The Direct Action auctions are part of Australia’s efforts to reduce Australia’s emissions by 5% of the year 2000 levels.

Environment Minister Greg Hunt is on leave for the for the launch of the Emissions Reduction effort.