More than half a billion dollars has been spent in the latest auction under the Turnbull government's Direct Action climate change plan, with the vast majority of the money committed to tree projects.
The results mean that about two-thirds of the $2.55 billion set aside under the government's climate change policy to pay farmers and business to cut greenhouse gas emissions has now been handed out.
In the third auction of the emissions reduction fund – a central plank of the Direct Action scheme – about 50 million tonnes of carbon dioxide savings were bought from 73 projects at an average price of $10.23 a tonne.
Almost all of the emissions savings bought (47 million tonnes) will come from protecting and restoring plants and trees. Much more modest amounts will come from plans to cut emissions from rubbish dumps, savanna burning, saving energy and agriculture.
Environment Minister Greg Hunt was quick to declare the auction a success. In a statement he said it showed the government's climate programs were working and the focus of the land sector countered claims it was paying big polluters.
"We are supporting practical projects that will significantly cut emissions and improve our environment," Mr Hunt said.
But critics were also quick to say that relaxed state land clearing laws in Queensland and NSW would wipe out the emissions savings from vegetation that has been bought through the fund.
Wilderness Society national director Lyndon Schneiders said at current rates it would take just two years to wipe out the gains from the total $1.2 billion spent under the three emissions reduction fund auctions on tree projects.
"The Turnbull government's climate policy is completely illogical," Mr Schneiders said.
"It has done nothing as Queensland and now NSW have gutted nature laws and allowed millions of trees to be ripped up and burnt, and then spends $1.2 billion of taxpayers money to keep trees in the ground and plant new ones.
"It would be easier and far cheaper to just reduce tree clearing."
Questions have also been raised about the government's long-term commitment to the emissions reduction fund. A top-up of money was not included in this year's federal budget and analysts suggesting the $816 million remaining will be depleted in just one or two more auctions over the next year.
Mr Hunt told a climate change conference in Melbourne this week that a "replenishment" of the fund could be expected in future budgets, though he would not explicitly say whether it would be the $200 million a year that he had flagged under former prime minister Tony Abbott.
Under Direct Action, the fund sits next to "safeguards" the government has established, which are supposed to limit emissions from big polluting companies. But analysts say these safeguards will not deliver emissions cuts as they are currently designed.
The government's climate change policy is due to be reviewed in 2017.
In response to the auction, carbon and energy market consultants RepuTex said that whereas in isolation the fund had been successful in contracting with projects, it had not curbed Australia's emissions.
"Notably, the rate of annual emissions growth continues to outpace credits contracted by the [fund]," the firm said.
"This growth is driven by Australia's largest emitting companies, which have to date not participated in the [fund] due to the voluntary nature of the scheme, and the large up-front costs."
The government's most recent greenhouse data found that Australia's emissions grew 0.2 per cent in the year up to September 2015, and was up 1 per cent compared to the previous quarter.
All up across the three auctions under the emissions reduction fund, $1.7 billion has been spent to buy 143 million tonnes of emissions savings from 348 projects at an average price of $12.10 per tonne.
The auctions, which see companies and farmers bid in projects, competing on price, are carried out by the government's Clean Energy Regulator.
At Senate estimates hearings on Thursday the Regulator's chief executive Chloe Munro said that about 45 per cent of the 143 million tonnes of CO₂ abatement would be delivered by 2020.
