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May 10 2012

Climate ignored in Australian federal budget

“Global warming poses a clear and present danger to civilization.”

US paleoclimatologist Lonnie Thompson

“Madam Deputy Speaker, in coming years no first?world, first?rate economy will succeed without cleaner sources of energy. So part of the broader transformation of our economy involves moving to a clean energy future, and helping Australian businesses and households make the change. The price on carbon pollution that begins this year will only be paid by Australia’s biggest emitters. It will not be levied on families. But to help with any price increases, we’re cutting income tax and increasing payments to pensioners, families and recipients of allowances beginning this month.”

Australian Treasurer Wayne Swan’s only significant mention of climate change in Tuesday’s budget speech

I don’t agree with the focus of the budget unveiled on Tuesday by the Gillard Labor Government. So instead of dissecting the headline decisions, I’ll compare it to my advice to the Government a month ago, much of which could have been achieved through the budget:

  1. Stop obsessing over the mirage of a budget surplus. If the Government continues to insist on spending cuts, it can start by cutting the billions of dollars it spends annually on perverse fossil fuel subsidies, which are many times greater than the amount it spends on renewable energy. If Labor stops dreaming of a surplus, that money could be spent on climate change.
  2. Stop playing a destructive role in international negotiations. At the very least, agree to be legally bound and stop trying to distort the accounting rules. Or to be positively constructive: raise Australia’s emissions target, cough up climate funding for developing countries, and support a global goal of reducing atmospheric CO2 to 350 ppm.
  3. Rewrite the Energy White Paper to plan for a 100% renewable energy future, and to phase out fossil fuel exports. Establish a federal feed-in tariff. Prioritize the CEFC and fund the construction of a solar power plant.
  4. Stop cutting climate policies.
  5. Acknowledge the climate crisis is serious, urgent, and necessitates radical change.

The Government chose to go ahead with its dash to surplus. Although journalists portray the budget as anti-business because it didn’t give businesses a $5 billion tax cut (!), it contains no cuts to fossil fuel subsidies or tax breaks, which total around $11 billion annually. This is despite the Government having previously hinted some subsidies such as the diesel fuel rebate could be cut, after which the mining industry ran ads in newspapers telling the Government not to do so. Businesses want to reduce the size of government, but only when it suits them.

The budget contains no climate funding for poor countries, even though it is desperately needed for adaptation to impacts in the present and near future, for mitigation of future emissions, and to advance UN negotiations. Perhaps this issue was ignored because the would-be recipients do not have the means to buy ads in Australian newspapers.

The budget contains no significant new measures to deal with climate change other than those agreed by the Multi-Party Climate Change Committee a year ago: the measly $23 per tonne carbon price, riddled with flaws and diluted with loads of compensation; $300 million per year for an Australian Renewable Energy Agency (ARENA); smaller amounts for the Carbon Farming Initative (CFI) and Biodiversity Fund. But a major element, the Clean Energy Finance Corporation (CEFC), gets no funding in this budget: supposedly it will receive $2 billion per year from 2013-14; however, it still remains unlegislated. Why is the Government not prioritizing CEFC, especially as the Liberals have pledged to repeal it (along with the carbon price) if they win next year’s election?

As noted above, Australia spends $11 billion per year subsidizing fossil fuels, including fuel tax rebates ($5 billion), non-indexing of fuel excise ($3 billion), aviation concessions ($2 billion), and depreciation concessions for fossil fuel assets ($1 billion). And that’s not counting polluter compensation for the carbon price, which could also be considered a fossil fuel subsidy. Of the $8 billion per year raised by the carbon tax, the Government will hand back $3 billion per year to trade-exposed industries for “jobs and competiveness”, and $1 billion per year to coal power plants for “energy security”. Together, fossil fuel subsidies and carbon price compensation total $15 billion per year, dwarfing renewable energy spending of $300 million in 2012-13 rising to $2.3 billion per year from 2013-14.

$37 million of new spending to standardize energy efficiency regulation is cancelled out ten times by a decision to cut the $405 million Tax Breaks for Green Buildings Program. Other cuts which had already been announced include the Solar Hot Water Initiative, Home Insulation Scheme, emissions standards for coal-fired power plants, and a third of staff from the Department of Climate Change and Energy Efficiency which administrates climate policies. Predictably, the justification for these cuts is the Government considers such policies redundant in the face of a carbon price. Of course, many of these programs were far from perfect, but if they are to be cut they should be replaced with something more effective at doing the same job, not just with a carbon price which is assumed to solve everything despite being extremely weak.

The Government has also deferred funding for a litany of climate change programs, including the Low Emissions Technology Demonstration Fund (LETDF, $101 million), Carbon Capture and Storage (CCS) Flagships ($75 million), and Connecting Renewables ($72 million). The case of Connecting Renewables is particularly egregious: when announced as an election promise in 2010 it was originally supposed to be a $1 billion initiative, but only $100 million was to be spent in the first four years, and now the funding has been delayed to 2018-19. LETDF has been serially deferred since it was announced by the Howard Government in 2004. While CCS is dubious, considering Labor is relying on it to keep the fossil fuel industry alive you’d think they might give it greater priority. Meanwhile the amount of funding allocated for programs subsumed by ARENA, including Solar Flagships, is opaque because no breakdown is provided.

I also noticed some Murray-Darling Basin programs have been cut. Does the Government seriously believe the recent La Niña means the long-term drying trend has stopped?

There was no mention of climate change in Treasurer Wayne Swan’s budget speech, except tangential references to clean energy and household compensation for the carbon price. The words “climate”, “warming”, “greenhouse”, “fossil fuel”, and “renewable” appeared zero times, “carbon” merely once, and “clean energy” only four times. The Queensland floods were mentioned, but only that they cost money – no acknowledgement that climate change is increasing the risk of flooding. The budget includes a $36 million advertising campaign to sell the carbon tax, but reportedly it will not focus on climate change, or pollution, or even clean energy. Instead the ads will be run by the Department of Families and Community Services and will be about household compensation, as if people wouldn’t notice it otherwise. They will not even mention the word “carbon” because focus groups concluded the word turned off voters (but how do you know it’s the word turning people off, and not the way you’re using it?).

As former Labor leader Mark Latham wrote today in the Australian Financial Review: “Climate change has become the issue that dare not speak its name in Labor circles, even in the Treasurer’s biggest speech of the year.” Latham says Climate Change Minister Greg Combet “has become the invisible man”, pointing out he has done only 12 interviews this year, and none on free commercial TV or radio.

A recent overseas study concluded “media coverage of climate change and élite cues from politicians and advocacy groups are among the most prominent drivers of the [US] public perception of the threat associated with climate change”. As climate competes with other issues including economic crisis and wars, those who fail to talk about the scientific basis for drastic action on climate change are implicitly telling the public it is not a serious problem. The Government is also shooting itself in the foot: how can you sell a policy without mentioning its fundamental reason for being? Voters reasonably suspect compensation will counteract the very purpose of the policy.

In the ABC’s post-speech interviews, the only mention of climate was when journalist Chris Uhlmann asked Wayne Swan whether the carbon price should be lowered because of low international prices (it shouldn’t). Swan, thankfully, replied no – the one thing for which I’ll give the Government credit is standing up to the relentless campaign to weaken or abolish the carbon price. I noticed in his line of questioning, Uhlmann contradicted himself by saying the price “will rise to $29” when it becomes an emissions trading scheme in 2015. The price in an emissions trading scheme is determined by the market, so it will only be $29 if international prices are at a similar level. Why is the ABC parroting nonsensical business lobby arguments?

All in all, the Government’s score on my checklist is a grand total of zero. It seems whenever I say they should do something, they do the exact opposite. How does this Government expect anyone to believe it is serious about climate change?

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