The budget has it backwards on climate Opinion Article

May 14, 2014 - 9:00am

This article first appeared on ABC Environment on 14 May 2014. 

John Connor
CEO, The Climate Institute

If there was any doubt that the election of the Abbott Government might slam the brakes on Australia's climate and clean energy progress, it's now over. With the Government's first budget, it's reversing at full speed.

This is the Backwards Budget - a budget that shifts the burden for pollution reduction from polluters to taxpayers. A budget that slashes renewable energy agencies and funding programs that are helping create the jobs and industries of the 21st century. A budget that rips hundreds of millions of dollars away from climate science, international climate finance and clean technology research programs.

We are back to the dark years of the Howard Government where climate and renewable energy are absent from the Treasurer's speech. 
We are back to the dark years of the Howard Government where climate and renewable energy are absent from the Treasurer's speech. Certainty about the future of Coalitions's 'signature' Emissions Reduction Fund isn't helped by the budget overview saying the $2.55 billion thought to be over the first four years is all we get over 10 years. The Minister's office says this is a misprint. But either way this reinforces concerns that any climate action is set to be hostage to the vagaries of the annual budget ritual. How much confidence can we have in the now four-year-old promise that once the ERF is up and running it will spend an average $1.2 billion a year?

What's most tragic is that Australia was just starting to get on track. Our greenhouse gas emissions, which had been growing steadily for decades, have begun to decline. Emissions from electricity, the single most polluting sector, fell an impressive 8.7 per cent since 2012. Solar and wind energy tripled in the last five years, while solar and wind jobs nearly quadrupled.

We have laws that price and limit carbon emissions from 60 per cent of the economy; laws that require companies to take responsibility for their pollution. We have independent, non-partisan institutions investing in research and development for the next wave of clean energy technologies. All these steps are necessary to ensure low-carbon competitiveness and sustainable economic prosperity. Ironically, on the same day as the budget, all these forward steps were included in the conservative International Energy Agency's recommended toolkit for energy policies to help avoid two degrees of global warming.

Now all these achievements are on the verge of being wound back. The biggest backward step is the intended repeal of the carbon laws. Not only will this will give polluters a free pass on their pollution, but it comes at a great cost: over $12.5 billion in foregone carbon revenue over the forward estimates.

On top of that, taxpayers are to fork out $2.55 billion for the Emissions Reduction Fund (ERF). All this while the Government works out if or how it will ensure reductions from big polluters. Taxpayers are being asked to buy an at best half-formed carbon pollution policy from Government and bin a credible alternative.

The Government is also trying to take down the independent agencies set up expressly to take the short-term partisan politicking out of climate and clean energy decisions. The news that the Australian Renewable Energy Agency (ARENA) is to be dismantled was a surprise, given the Coalition supported ARENA before the election and promised to keep it going.

ARENA now joins the chopping block along with the Climate Change Authority, the nation's climate policy watchdog, and the Clean Energy Finance Corporation, which breaks down the barriers to clean energy investment.

A glimmer of hope remains: while the Government has slated these three agencies for demolition, the Senate may not be minded to agree. This will be seen in July.

The Government's restoration of fuel excise indexation is positive, because it is effectively a price on carbon pollution that will encourage greater efficiency. But it's unfair that motorists pay more while miners' fuel subsidies (worth nearly $3 billion a year) remain. And it's unwise for the government to cut investment in public transport. Just building more roads will only increase costly car dependency and increase transport pollution that we could avoid.

There was plenty of love for solar power before the election, with hundreds of millions of dollars promised for homeowners, schools and towns. This has been watered down with just $2.1 million for seven solar towns over four years.

Understandably many people will be focused on the immediate hip pocket impact of this Budget. But the Government's retreat from climate action and clean energy will also cost us. Australia's prosperity this century depends on the world avoiding dangerous climate change — and that means we have to play our part and be ready for the transition to a low-carbon, ultimately carbon removing economy. With very few exceptions, this budget dodges these issues and urges Australians to gamble on a half formed carbon pollution policy.

Government and business figures have often opposed climate and energy initiatives on the basis that Australia shouldn't "go it alone". This budget shows that if there's anywhere we're at risk of going alone, it's backwards

John Connor

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.

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