A Charles Sturt University (CSU) expert in carbon policy has urged the federal government to retain Australia's current Renewable Energy Target (RET) in the light of yesterday's deal with the Palmer United Party to instigate its Direct Action Policy.

Professor Kevin Parton, senior economist with the University's Institute for Land, Water and Society, is skeptical that the new Direct Action Policy can reduce Australia's overall carbon pollution.

"The new policy has two components; an emissions reduction fund and a safeguard mechanism," Professor Parton said.

"Polluters can bid for the funds to spend on their own carbon-reduction schemes or to buy carbon 'offsets' like planting trees. But this on its own it does not reduce carbon pollution because other firms can simply increase their pollution levels.

"The safeguard mechanism is needed to control carbon pollution by restricting overall carbon emissions. The details of the mechanism have not been explained by the government, nor is it clear how this could be easily managed. It appears it will require a regulating authority to visit the major polluting businesses and monitor their compliance."

Professor Parton believes the Direct Action Policy resembles old-fashioned environmental policies used in Europe in the 1960s to reduce industrial pollution.

"These schemes can be effective, but they are costly," he said. "This seems at odds with the federal government's professed need to contain the  Budget."

One component of the deal with the Palmer United Party is to have an enquiry into a possible future Emissions Trading Scheme (ETS).

"This seems a strange proviso, given that the federal government continues to announce that it will never introduce such a scheme after it removed the Carbon Tax introduced by the former Labor government," Professor Parton said.

"In addition, exhaustive economic analyses of the various schemes have been completed over recent years, and it is unlikely that anything new would turn up.

"This analysis shows that an ETS is the most efficient, least-cost policy, and that to achieve significant emission reductions, Direct Action would be very costly to the taxpayer. More importantly, an ETS may eventually be forced on the Australian Government as part of an international carbon emission reduction agreement."

Professor Parton believes the impact of the existing RET has been to encourage investment in a wide range of non-polluting electricity generation, from solar panels on household roofs to large-scale wind power stations. 

"So far, the government has thankfully failed to abolish the RET, despite political rhetoric that it will do so," he said.