Clive Palmer and government strike deal on Direct Action

A DEAL with Clive Palmer has secured the Abbott government's $2.5 billion emission reduction fund and "direct action plan", in return for keeping the Climate Change Authority.

But the deal, announced in Canberra on Wednesday, will not include an emissions trading scheme, as Mr Palmer promised with Al Gore earlier this year, and avoids the Renewable Energy Target altogether.

Mr Palmer joined Environment Minister Greg Hunt and Climate Change Authority chief executive Bernie Fraser to announce the deal.

Mr Hunt said the details would see the Federal Government retain the authority - an advisory body the government had previously wanted to abolish - until the next election.

In return, Mr Palmer said he had given the go-ahead for PUP senators to support the emissions reduction fund - an incentive-based voluntary scheme designed to help some carbon emitters reduce their emissions in return for government payments.

The scheme, Mr Hunt said, would centre on a new carbon farming initiative bill, focused on helping land owners use soil carbon methods as carbon sinks.

The wider fund will also fund landfill operators and coal mine owners to reduce their fugitive emissions, which Mr Hunt emphasised would raise "zero revenue" for the Commonwealth.

Mr Palmer said the deal had "kept alive" the Climate Change Authority.

Mr Hunt said the deal was the result of a "very fruitful negotiation" with Mr Palmer.

But the government also secured the backing of crossbenchers Senator Nick Xenophon and Senator John Madigan to guarantee passage of the fund and direct action plan, with concessions to Sen Xenophon.

Mr Hunt said he had backed four out of five of Sen Xenophon's demands, but was not backing Sen Xenophon's call to link an Australian fund to international carbon credits.

Under the deal, the Climate Change Authority will also be tasked with investigating the potential for an Australian ETS, based on overseas experience, and to file several reports between now and June 2016, with the first report due in June next year.

Mr Fraser said he had accepted the extension of the authority's future, but said the authority had to be suitably resourced and staffed.

After cutting the authority's entire budget in May, Mr Hunt said he had allocated some funds, but would not go into detail.


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