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Swan says climate is a key challenge but fails to meet it

Dan Cass

by Dan Cass

12 May 05:30am

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Filed under: Budget, Budget 2010, Climate Change, Environment

34 comments

If this Budget is supposed to get Australia doing its part in solving “the greatest moral challenge of our time”, then it is a failure. While there is $652 million over 4 years in new money for clean energy, this pales into insignificance compared with, for example, $27.7 billion over 6 years for roads.

The Australian's Peter Nicholson

As I said yesterday, this is a very unclear budget, lacking a clear strategy on energy and other resources.

Treasurer Wayne Swan said in his speech that climate change (which he mentioned 4 times)  is one of “three key challenges”  for the Budget, along with the return to full economic capacity after the GFC and and the costs of an ageing population. But the funding announced fell far short of this rhetoric.

What may confuse the media and the public is that the Budget night announcements are a mix of actual Budget measures and media releases that talk about old spending. For example, there was the belated announcement of the shortlist of companies that are bidding for Round One of last years’s $1.5 billion Solar Flagships Program.

This could be interpreted as a cynical attempt to trick people into thinking the clean energy commitment of the Government is bigger than it really is. To make it clear, the $1.5 billion is not even the granting of money promised in the last budget, it is simply the announcement of a shortlist of companies that might get the money.

Another example of old money dressed up as new, again via press releases from Resources and Energy Minister Martin Ferguson, are two ad hoc grants under the Renewable Energy Demonstration Program. These are for demonstration plants, for $31.8mill to add solar steam boost to coal plant at Kogan Creek in Queensland and $60mill for Whyalla Solar Oasis Consortium to install ‘Big Dish’ concentrated solar thermal power generation technology developed at Australian National University in 1994.

The $652 million of new Budget money over 4 years is for a Renewable Energy Future Fund, which spends the money saved because the ETS is not going to happen. When you compare an amount this small with the ETS, which was supposed to be a whole-of-economy reform, the tragedy is clear.

One big question here is that the expenditure spreadsheet suggests the ETS has been delayed another year, but without an explicit announcement by the Government. According to the PM the ETS is delayed until 2013 but the savings from its absence are being accounted up to June 2014. I suggest that the Greens Senators will want to pursue this issue carefully in Senate Budget estimate hearings, on 24 May.

The renewable energy industry will be happy with additional money but disappointed it is so ad hoc and short term. There is no systematic shift in economic priorities to cut Australian emissions to an acceptable level.

The Government has left all the details for the new money spending out of the budget, which gives it a raft of juicy election campaign announcements to make.

One indication of how little faith Resources and Energy Minister Ferguson has in a clean energy economy is his announcement on energy efficiency. His press release says that Australia will apply to become a full member of the International Partnership for Energy Efficiency Cooperation and then explains his understanding of energy efficiency in Australia.

Ferguson claims that Australia’s largest energy users have already committed to energy savings that will reduce Australia’s annual CO2 emissions by 0.7% of 2006-07 levels and that future savings might reach an additional 1%.

Energy efficiency experts in industry talk about savings in the order of 20-50% for the developed economies like Australia. To be aiming for 1.7% savings would put Australia at the bottom of the world in energy efficiency.

McKinsey and Company, for example, has applied its cost curve model to Australia and found that up to 20% of emissions reductions can be acheived, mostly from energy efficiency, at zero net cost! (This is by 2020, against 1990 levels.)

In order to see how bad the resources and energy strategy is, consider that the budget does nothing to claw back subsidies to the fossil fuel and mining industries that result in emissions increases and energy waste. According to various estimates, these include $1.7billion or so in fuel subsidies and onother $2-3 billion in other subsidies such as ports and rail infrastructure.

Some in the green movement are saying that this Budget is a win for anti-greens in the Labor Government, like Ferguson and a serious loss for the light-green, climate-concerned figures like Peter Garrett, Anthony Albanese, Tanya Plibersek, Lindsay Tanner and so on.

If this theory is right then these Ministers might want to demonstrate that they are prepared to keep the Government focused on “the greatest moral challenge of our time” in future Budgets, for the sake of the environment and their own electoral fortunes.

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34 comments

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    • Against the Man says:

      06:24am | 12/05/10

      Dan if you believed for even a nanosecond that your millionaire PM ever cared about the environment than I have some swamp land in Florida to sell yer smile

      Reply

    • Dan says:

      07:51am | 12/05/10

      Are you saying that millionaires can’t care about the environment? What does his wealth have to do with it?

    • Jack says:

      10:36am | 12/05/10

      Labor is all spin. They have put $30 million in this latest budget for advertising Climate Change.

      What are they advertising?

      The “greatest moral and ethical challenge of our time” Kevin called it, and yet all you wet Latte Luvvies suck it up.

      You all voted for Kevin 07. Suck it up precious.

    • Tom says:

      05:27pm | 12/05/10

      A rich man who only care about himself and has nothing to lose my doing a bad job because he has personal wealth and will not need to look at the private sector for a job makes it relevant! WAKE UP sleepy head! smile

    • WKH says:

      06:28am | 12/05/10

      Maybe, just maybe you are looking at all this wrong Dan. Did you ever stop and think maybe it is this government as well as the opposition who don’t really believe in man made climate change. The figures are there in the budget just as you highlighted them to prove it. The greatest moral challenge of our time? Poppy cock….Go get a real job buddy and give us all a break…Just heard that ocean levels are declining…who would of thunk it..

      Reply

    • eddie says:

      03:47pm | 12/05/10

      I think that there may be a few who dissagree with you on the sea level thing in places like the Maldives.
      No democratic govt in the world will do anything about our cosumption (and consequently the dose of consumption we have given our planet) because if they do they will lose power. The only way to start to rehabilitate our environment - and I am taking about the whole, not just the carbon pollution - is to reduce our consumption and reduce our population, this would lead to shrinking ecconomys, governments dont like the ecconomy shrinking,  if we consume less - the bussiness sector makes less money, they dont want that either and will fight tooth and nail against it.  In short we are buggered unless we accept that the earth cannot support 6 billion of us in the manner to which we in the western world have become accustomed and empower our governments, worldwide, to make the unpallatable decisions needed to preserve both our species and our environment.
      I think we are just buggered though.

    • WKH says:

      04:13pm | 12/05/10

      Never fear eddie, we will do what we have always done…ADAPT!

    • PauL says:

      08:18am | 12/05/10

      I would bet that the climate is bigger than any party and that no matter what, little can be done about it. No one ever said that the climate is static . I am a Mann made global warming sceptic and I think the pollies on all sides (except the greens) are too.

      Reply

    • Saint says:

      08:34am | 12/05/10

      @Against the Man - my sentiments exactly, but I agree the wealth is irrelevant. Dan, did you seriously believe Krudd ever gave a damn about man-made climate change? He rode the bandwagon till the wheels fell off and then moved on, as with every other issue - a true hollow man.

      As for the environment, you can relax, the man-made climate change hoax has been completely exposed for what it is (just in time to save this country from the disastrous ETC) and we’re going to be ok.

      Don’t hold your breath though for this government to do anything sensible about existing and emerging real environmental issues as they’re not sexy and Krudd won’t get any fawning MSM coverage from tackling them.

      Reply

    • Daniel says:

      08:55am | 12/05/10

      If Rudd had spoken to the Greens instead of ignoring them Australia would have had an ETS by now. This budget does nothing for Australias environment.

      Reply

    • Saint says:

      09:26am | 12/05/10

      Neither would an ETS Daniel

    • persephone says:

      10:31am | 12/05/10

      Daniel

      the Greens don’t have the numbers to get anything through the Senate.

      There is absolutely no scenario that anyone can come up with that sees an ETS being passed through the present Senate without Liberal party support.

      They promised it - at the election, and during negotiations - and broke their promises.

      If there’s any moral outrage, that’s where it should be directed; at a party which promised the most significant global action on climate change leading up to the 2007 election and then promised to pass the amended ETS through the Senate.

    • Overflow says:

      11:26am | 12/05/10

      Daniel how does setting a price on carbon and compensating people for that price rise (tax churn) actually reduce carbon emmissions?  Rudd and Swan gave $900 cheques to low income people to stimulate the economy because that group tend to spend the money they have.  If you overcompensate this group they will spend the money and when you spend money, generally energy use is involved ergo more CO2 produced.

      Persephone, if Rudd really believed all his rhetoric he would call a double dissolution election.  The sad fact for you and this nation is that our PM is a hollow man that is only interested in winning elections.  But then who can blame him when Obama even has more important things to worry about than saving the planet and striking a deal at Copenhagen.

    • persephone says:

      11:40am | 12/05/10

      Overflow

      there was no point to a DD.

      To implement something as complex as an ETS, industry needs at least an eighteen month lead in time.

      If you held a DD in August - the earliest one is realistically possible - and Labor won, it would be at least September before Parliament could sit.

      For a joint sitting to occur after a DD, the legislation which was rejected must be represented to Parliament and must be rejected again by the Senate.

      So the scenario would be: Parliament sits in September; ETS introduced and sent to Senate; Senate sends the legislation to committee, delaying it until at least November/December.

      Legislation fails to pass the house in Nov/December.

      It would take until the next year - 2011 - for a joint sitting to be called, probably in March.

      So, on that scenario, we’re looking at an ETS being introduced - at the very earliest - by September 2012.

      So a DD provides no real advantage over a normal election, which should result in a Greens dominated Senate and see even ‘greener’ legislation pass far more quickly.

    • AdamC says:

      12:43pm | 12/05/10

      Hi Pers, I sort of agree with you. Sort of. I agree that a DD would be dumb as it would necessitate a campaign based on an ETS – bad idea. Aside from which, post Cop(out)enhagen, the gov’s current stance that action has to be co-ordinated and international (i.e, be effective, not simply a carbon hair shirt for enviro-penance) looks eminently sensible.

      The problem is the silly rhetoric Dudd, W(r)ong and the rest used in selling the ETS, which now makes them look horribly insincere. Pollies do this too often, talk like something is an unbreakable, article-of-faith commitment when it just isn’t. Labor did it in opposition to the GST too – which also looked pretty absurd when they had suggested one before.

    • Cameron Price-Austin says:

      01:20pm | 12/05/10

      @persephone

      “There is absolutely no scenario that anyone can come up with that sees an ETS being passed through the present Senate without Liberal party support.”

      I’m not sure I understand. There are 76 seats in the senate, so any bill requires 39 votes to pass. Labor has 32 and the Greens have 5, which totals 37. That still leaves Family First (Fielding) and an independent (Xenophon) with which to negotiate.

      Am I missing something? Under those numbers, it would be possible to pass ETS legislation without Coalition support.

    • Overflow says:

      01:34pm | 12/05/10

      Pers, are you serious?? The greatest moral challenge our time, the furture of this planet is reliant on a reduction in CO2 .....but a DD is not worth it??  And you wonder why people have lost faith in the PM, if the problem is real and the CPRS will fix it, surely it is worth it??  Or shock horror as AdamC states perhaps Howard’s position of not proceeding without international agreement the only way it can happen thus strengthening my argument about Rudd being a hollow man.

    • persephone says:

      01:49pm | 12/05/10

      Cameron

      not when one of those Senators is Fielding, who discovered he was a climate change sceptic around about the same time he realised that his best bet of being re elected was a DD.

      He now sees his stance on climate change as being his best differential from others in the Senate and is determinedly going for the loony vote.

      Overflow

      it won’t achieve anything quicker than a ‘real’ election would, which is the point.

      Look, I’m personally in the ‘we’ve already left it too late’ camp, but political reality is political reality.

      If you want to beat up someone for shrinking the moral challenge, have a go at Abbott.

      Rolled Malcolm for supporting the ETS, because ‘climate change is crap’ and then came out with a far more expensive and less effective option than the government’s within a matter of weeks.

      But, gee, he’s a bit of a weathervane on this, isn’t he?

    • James says:

      01:57pm | 12/05/10

      Pers, the ETS was blocked in December. The DD could have happened already. Rudd chickened out pure and simple.

    • Super D says:

      02:01pm | 12/05/10

      Rudd beleieves in re-election, nothing more.  If he really believed in his nonsense ETS he would have had the courage of his convictions to take it to a double dissolution election.  He doesn’t, he’s just used climate change as a political tool and now that the polls show a growing majority of people realise its all nonsense then funnilly enough he blows with the political wind.

      The reason his dumping of the ETS is so damaging as it demonstrates a huge gap bewteen his rhetoric and the truth.

    • Cameron Price-Austin says:

      02:29pm | 12/05/10

      @persephone

      So your original comment was disingenuous. There are scenarios where the ETS can be passed through the present Senate without Coalition support.

      Why direct all your ‘moral outrage’ at the Coalition? Why not demonise the Greens, Xenophon or Fielding?

      While we’re at it, don’t you think it’s a bit hypocritical to condemn the Coalition for changing their mind on the ETS? Isn’t that exactly what Labor did with child care centres?

    • persephone says:

      03:08pm | 12/05/10

      Cameron

      no, it wasn’t; it was a realistic assessment of the options.

      I direct my ire at the Liberals because they went to the last election saying that they would introduce an ETS. They then negotiated with the government and agreed to pass an ETS.

      So they lied to their constituents and they lied to the government.

      Their stated objection to the ETS was that it was too costly, but then they introduced a climate change policy which is even costlier and will impose higher costs on the taxpayer than the one they rejected.

      They are the first party in history to vote against the introduction of a policy which had bipartisan support in an election campaign.

    • Cameron Price-Austin says:

      03:30pm | 12/05/10

      @persephone

      I can understand your frustration. The Coalition did go to the election supporting an ETS.

      But they changed their mind as new information became available. This is a good thing: far better for a party to change their mind than to persist blindly in the face of contrary evidence and support.

      The Labor government has also changed their mind on a key election issue. Building new childcare centres was central to their election, but they abandoned it because new information showed they weren’t required and may damage the industry . You yourself have defended that very decision on this site.

      What I don’t understand is how you can condemn the Coalition for doing the same thing. New information emerged (a drop in public support, a perceived failure at Copenhagen, projected economic damage and an absence of comparable international action), so they changed their policy.

    • Aitch B says:

      07:01pm | 12/05/10

      Well said, Cameron.

      Your response, Pers?

    • persephone says:

      07:09pm | 12/05/10

      Cameron

      they changed their mind after they had agreed in the party room, only days before, to support it.

      They then came up with an alternative that was worse in every respect.

      Now, sorry, that’s different from abandoning a policy because it was realised that action wasn’t necessary.

      The Liberals said that they recognised the need for action. They said that their problem was that the action proposed was more expensive.

      To be consistent, then, they had two options: no action, or cheaper action.

      They chose to act and they chose action which - if implemented - will cost taxpayers more.

      Furthermore, the decision on childcare was evidence based.

      The Liberals have ignored the evidence on climate change and their chosen course of action is both expensive and ineffective.

      The government’s policy thrust - whilst not perfect - was consistent with the evidence, with all major economic studies on the issue recommending an ETS as the most effective and economic course of action.

      And the Liberals - and you - can’t put Copenhagen in there as an excuse. It hadn’t happened yet.

    • Bill says:

      09:53am | 12/05/10

      Time to find a new scare and a new band wagon. But I am impressed how Rudd can walk away from a key policey and point his finger at the other kid and say “he made me do it”

      Reply

    • OldGirl says:

      01:57pm | 12/05/10

      On Foxtel news yesterday was a statement from some scientists from the university of N.S.W I think. I had a big day yesterday with catscans ect so I may be sketchy on the details. sorry. But anyway they said the earth will be uninhabital in less than 300 years.. I was kinda stunned on that, I thought it would heagt up and be hotter but still liveable. Apparently not according to them. look it up on the net its bound to be there if Fox had it. Seriously, your very precious and I know some are non believers but do you really think we should risk doing nothing?

      Reply

    • PatC says:

      02:07pm | 12/05/10

      All you people who think the an Australian CPRS would fix anthropologic climate change need to take a seriously long hard look at yourselves and maybe seek treatment for delusions of grandeur.

      Let’s assume for a moment that anthropologic climate change is a proven fact - and it’s not- and atmospheric carbon dioxide is the culprit.

      If Australia reduced is carbon (dioxide) footprint to zero it would have a very small effect on the amount of carbon dioxide being emitted world wide and not enough of an effect to “Save the Planet” or solve “The Greatest Moral Challenge Of Out Time”. In fact even if we became a Carbon Sink and reduced atmospheric carbon worldwide by the amount we now produce IT STILL WOULD MAKE A SCRAP OF DIFFERENCE.

      We are a very small fish in a very big pond. All a CPRS would manage to do would be to send a lot of industries off shore to countries that have much lower wages and don’t have a CPRS.

      Reply

    • persephone says:

      03:10pm | 12/05/10

      Which is why Rudd is not acting until he has seen the outcome of the next round of talks and thus can work out what the rest of the world is doing.

    • Terry of Brisbane says:

      02:49pm | 12/05/10

      Apart from everything else, I am particularly interested in comments about Kevin Rudds wealth and reference to him being a “millionaire” PM. Let’s just set the record straight. Rudd is NOT a millionaire - his wife Therese Rein is and coincidentally, she made the bulk of her fortune when the Howard Government created the Job Network. To my knowledge, apart from a couple of cleaning and hospital wardsmen jobs early in his life, Rudd has essentially been a bureaucrat all his working life. Not too many public service millionaires that I know of.

      Reply

    • Jim says:

      03:14pm | 12/05/10

      I agree with PatC, however, I am in the process of having multiple solar panels installed on my roof.
      Even though the Australian Productivity Commission’s own figures quote the cost of generating 1 megawat of power at: coal $30-35, wind $55-80, and slolar $200-400, given the handouts and the power buy back, its a better investment than bank interest - in fact given Rudd’s definition, it heads into the super profit territory.
      I don’t know if it adds much to the experience but one is receivng kind smiles and thumbs up from many bearded strangers.
      .

      Reply

    • OldGirl says:

      03:45pm | 12/05/10

      I have come back here again with some news for the disabled. I was so upset about some of the posts I read I rang centerlink. I am not disabled just concerned. They told me this will not effect those on a disabilty pension now. It will be for new people applying. The girl was lovely to me and I know if you ring and ask they will tell you that it won’t affect you. I am sorry to meddle but I feel like I am getting to know people on here and I hate to think of you being upset. Its Tony Abbott who wants to send people back to work Once again this is easy to clarrfiy just give them a bell.

      Reply

    • Julie Coker-Godson says:

      04:40pm | 12/05/10

      Dear OldGirl:  You are not meddling, in fact I think it was very thoughtful of you to take the trouble to investigate the actual proposal with Centrelink.  As a DSP-er, I would like to extend my grateful thanks.  I do get disturbed myself at some of the posts on this subject as some people are truly unpleasant about it and this can cause more sensitive people genuine distress and it makes me very angry.  Have a nice strong sweet cup of tea - fixes everything I reckon!

 
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