May 13, 2015 - 12:27pm
This article first appeared in ABC Environment on 13 May 2015 and republished in Climate Spectator on 14 May 2015.
CEO, The Climate Institute
As the Treasurer was finalising his Budget speech yesterday, the World Bank released a report on
Decarbonising Development: Three Steps to a Zero Carbon Future
(pdf) and our Bureau of Meteorology announced that
El Nino is back
— a big problem for Australia as global warming puts our already extreme weather on steroids.
These are hardly 'radical' organisations. Yet the Treasurer's speech made no mention of policies to modernise and decarbonise our economy. There was no mention of climate costs and the physical impacts of climate change that CSIRO has now repeatedly warned are happening now, and will only grow. The Treasurer did laud the truly awesome power of our fossil fuel exports — sufficient to power Mumbai, Tokyo and Singapore apparently.
Last night's budget highlights a number of problems with the government's approach to climate and economic policy. The budget continued the assault on the institutions and policies that form the infrastructure necessary for decarbonisation and, in a new twist, for increasing climate resilience. It entrenched concerns about the ability of Australia to achieve even its minimum 2020 pollution reduction targets. It maintained the perversity of taxpayers rather than polluters taking responsibility for emissions reduction.
On the last point, Economist Frank Jotzo from ANU contrasts the around $400 million a year of taxpayers money being spent under the government's Emissions Reduction Fund (ERF) with an estimated $2 billion of revenue per year from polluters under emissions trading. That's twice the recent foreign aid cut. Worth repeating — the budget could be $2.4 billion a year better off.
Perhaps more importantly, just the default declining pollution cap under the previous carbon laws would, with a high degree of certainty, have achieved pollution reduction of 15 per cent below 2000 levels by 2020 (pdf
Now it is highly unlikely that the government can meet the insufficient emissions reduction target it's aiming for — 5 per cent of 2000 levels by 2020.
As UNFCCC head Christiana Figueres reminded Lateline
on Friday night, this is the minimum of the 5 to 25 per cent reduction range both parties have supported in the past. Stronger reductions were supposed to follow if the world was acting, which by all accounts it more than is. And let's not forget that the independent Climate Change Authority recommended at least 15 per cent reductions as our fair contribution to global action underway.
Another problem with the budget is its funding shortfall for the government's inefficient policies.
The first auction under the ERF just weeks ago priced carbon at $13.95 per tonne of emissions. If the around $1.6 billion forecast to be spent in the ERF's first five years ($75 million was to be spent this year) is spent at the $13.96 average carbon price, then 115 million tonnes of pollution reductions is achieved. The government recently estimated that it would require an extra 236 million tonnes reduction by 2020 to achieve the minimum reduction target of 5 per cent below 2000.
In other words, the government will need to buy as much reductions in the final year before its 2020 target as it achieved in the combined five years before it.
And that depends on broader pollution remaining in check, which is questionable with the sustained assault on renewable energy and the loophole ridden pollution safeguard mechanism that is supposed to stop pollution from rising.
The programs and institutions that track our emissions and are there to facilitate the required economic transition are under continued assault. While the Climate Change Authority
is given a welcome lifeline of an extra year till end 2016, it remains on the chopping block longer term, along with the Clean Energy Finance Corporation
and the Australian Renewable Energy Agency
All of these agencies provide significant value for taxpayers, credible independent advice and support for economic innovations crucial for a modern, smart and clean economy.
It is welcome that the budget makes some allowances for drought and disaster funding, especially in Australia's regional areas. But at the same time the National Climate Change Adaptation Research Facility
was added to the list of climate and clean energy agencies to be wound up in 2017 — an organisation that highlights best practice in building greater resilience to climate impacts.
The gutting of agencies like these occurs just as leading global and domestic scientists, and the CSIRO, are telling us that we're experiencing rising climate impacts here and in our Asia-Pacific region. The unconscionable slashing of the overseas aid budget, and its threat to a viable foundation for financing greater resilience and cleaner development in our region, was yet another problematic aspect of last night's budget.
The risks to our future prosperity in a world focusing on a zero carbon global economy are not going away. Yesterday's World Bank report is part of a growing realisation not only that we must decarbonise the economies if we are to avoid the goal of avoiding two degree warming that was highlighted in the recent Intergenerational Report. It is part of a growing realisation that the benefits of action far outweigh the costs.
The benefits of our fossil fuel past are fast turning into the liabilities of the zero carbon future.
John Connor was CEO of The Climate Institute from 2007 to March 2017. Whilst qualified as a lawyer, John has spent over twenty years working in a variety of policy and advocacy roles with organisations including World Vision, Make Poverty History, the Australian Conservation Foundation and the NSW Nature Conservation Council. Since joining The Climate Institute in 2007 John has been a leading analyst and commentator on the rollercoaster that has been Australia’s domestic and international carbon policy and overseen the Institute’s additional focus on institutional investors and climate risk. John has also worked on numerous government and business advisory panels.