US President Barack Obama's new restrictions on pollution from power plants show up Australia's as weak and ineffective.

Obama's Clean Power Plan, unveiled yesterday in the US, sets tough regulations on America's heaviest polluters and provides a strong boost to renewable energy.

The new plan is designed to dramatically cut greenhouse gas pollution from US power plants. It sets strict, customised carbon dioxide limits on states and leaves each to determine the best way of achieving them.

Overall, the rule requires a 32 per cent cut in carbon pollution by 2030 based on 2005 levels. That means coal, which accounted for 39 per cent of US electricity generation last year, will be driven down to 27 per cent by 2030.

Speculation was that Obama's plan would consider natural gas a "bridge fuel" to help the transition from coal, but even this thinking has shifted in the final version. In the plan released by the President, natural gas remains unchanged, nuclear is constrained and renewable energy is the big winner.

The plan has been designed to give states flexibility and its design encourages them to adopt cap-and-trade (emissions trading) programs. Like similar plans discussed in Australia, a cap-and-trade program puts a legal cap on pollution and creates a market for buying permits or credits to pollute. It is an efficient and cost-effective way to reduce pollution.

Obama's plan will need to face down legal challenges by climate change deniers and big polluters but, if successful, it could lead to closure of hundreds of coal-fired power plants, stop future coal plants from being built and support a huge expansion in wind and solar energy.

Here in Australia our government isn't showing anything like the same foresight or wisdom.

A report released by the Australian Conservation Foundation in March this year,Australia’s Top 10 Climate Polluters, examined the 10 companies responsible for nearly one-third of Australia's greenhouse pollution.

It showed that some of Australia's coal-fired power plants are highly polluting, inefficient old rust buckets that are well past their use-by dates.

But instead of preparing for the phased closure of coal-fired power plants and helping workers and communities with the transition, our government keeps its head firmly in the sand. Australia continues to give its biggest polluters a completely free ride.

Just this week analysis by RepuTex showed Tony Abbott's Direct Action, the policy that is supposed to be protecting Australia from increased pollution, is letting the nation's biggest polluters off the hook.

RepuTex noted that "out of Australia's top 20 emitting facilities, none are expected to incur any liability despite all being forecast to increase their emissions over the next 10 years".

Direct Action's proposed safeguard mechanism has an entirely arbitrary baseline of 100,000 tonnes of climate pollution a year before companies are affected.

The baseline is set up so that each facility can continue polluting at the highest level it reached in the past five years.

Overall emissions can continue to increase from their present level and in many cases no change will be needed to avoid penalty.

It also allows an additional increase for mining, oil and gas operations and significant expansions in high emission facilities and new large polluting facilities. An increase in emissions is permitted, so long as it is a result of a large capital investment.

The so-called "safeguard mechanism" effectively protects the dirtiest polluters in Australia.

What a contrast to the Clean Power Plan unveiled in the US.

One takes charge of carbon pollution and modernising the economy by driving out heavy polluters and stimulating renewable energy investment. The other – unfortunately, the plan proposed for Australia – gives a free kick to the biggest polluters.

The Direct Action plan is not set up to do the job it should be doing and in the process is costing $2.55 billion.

Also this week former National Australia Bank boss Cameron Clyne said the "wilful ignorance and blindness" of political leaders and some sections of the business community were making climate change policy in Australia so difficult. What do we expect when the Prime Minister's key business adviser, Maurice Newman, is a notorious climate denier?

It is time for Australia to get serious about transforming our energy system.

It is time for Australia to get serious about transforming our energy system. We need to prepare for the staged, systematic closure of coal-fired power plants, help workers and communities make the transition and fully rehabilitate closed plant sites.

Australia often follows the US – not always to our benefit. On this occasion Washington's positioning is good for the planet, including Australia.

There are enormous benefits – for health, jobs and Australia's international reputation – in switching our economy to be powered by clean renewable energy.


Geoffrey Cousins

Geoff Cousins is a past president of the Australian Conservation Foundation; ACF Life Member