The Morrison government prefers a gas-fired recovery to a green one and has offered no new support for renewable energy or electric vehicles
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Scott Morrison visits an oil refinery in Gladstone in
January. The 2021 federal budget pledged $279.9m to help big
emitters reduce energy consumption and emissions.
Photograph: Lukas Coch/AAP
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But once you dig into the detail there is plenty to know. Here are some key points.
Will there be a green recovery?
Not based on this. There has been a global push for a climate-focused move to kickstart economic growth from the pandemic, pushed by the International Monetary Fund, the United Nations and several national leaders.
The response has been mixed, but countries that Australia likes to compare itself with have embraced the idea.
The US president, Joe Biden, has proposed a US$2tn infrastructure plan to drive “transformational progress” in tackling climate change, including US$174bn for electric vehicles and support to make the electricity grid emissions-free by 2035.
Germany has dedicated US$47bn to green recovery measures, including $9bn to “green hydrogen”.
Even fossil fuel-rich Canada has committed more than US$36bn to clean energy.
In contrast, the UN environment program found Australia had done the least among the world’s 50 largest economies to drive a green recovery. There is nothing to change that in the budget.
The government remains averse to even using the word “climate”. It appears in just two items in the 197 pages of budget paper number two, which lays out proposed spending measures for the next four years.
Elsewhere, a table dedicated to “climate spending” confirms just 0.3% – 30c in every $100 – of budget spending is dedicated to addressing the climate crisis. The government expects that to fall to 0.2% in 2022-23.
Does the budget support a gas-fired recovery, as the government has promised?
Yes, to some extent. It includes $58.6m in new funding for the industry over four years, including for expanding pipelines, a new gas import terminal, gas storage facilities and a gas supply hub at Wallumbilla in Queensland.
There is also $30m for a company owned by the iron ore magnate Andrew Forrest to help its early works on a new gas-fired power station. Why Forrest, a billionaire, needs public money has not been explained.
The Coalition is backing a gas plant that also runs on hydrogen. Is this the future or a folly? Read more There is a further $24.9m for new gas-fired power plants to become “hydrogen-ready” – a contentious approach given experts say hydrogen is more likely to be used to reduce emissions in other sectors, such as steel production, than to compete with existing cheap and clean alternatives in electricity generation.
But there is no money for a new $600m publicly owned gas plant in the Hunter Valley, which the government threatened to build if the private sector did not commit to building new gas generators to replace the Liddell coal plant when it closes in 2023.
It is unclear if the government has been satisfied by commitments by EnergyAustralia and Forrest, or if that decision is yet to be made. The head of the government’s Energy Security Board, Kerry Schott, has said the economic case for new gas power in New South Wales when Liddell closes “doesn’t stack up”.
A reminder: Gas is sometimes described as emitting about half as much as coal when burned, but studies have suggested its impact is much higher once methane leaks during extraction and piping are counted.
What about renewable energy?
Not much to see here. The government has made clear it thinks solar and wind no longer need public funding to be competitive, and it does not see its role as hastening their expansion as part of a clean transition.
Instead, the budget includes previously announced support for “low emissions” technology development – $263.7m for long-promised but little-delivered fossil fuel carbon capture projects and $275.5m for four “clean hydrogen” export hubs that could run on renewable energy or fossil fuels with carbon capture and storage.
The former Liberal prime minister Malcolm Turnbull has described producing hydrogen with coal or gas as a “delaying tactic” pushed by the fossil fuel industry.
There is also $30m for a big battery and microgrids in Northern Territory Indigenous communities and $19.3m for a renewable energy microgrid in the Daintree.
The single biggest bit of spending on emissions reduction was announced in April before Biden’s climate summit – $639m for “low emissions international technology partnerships”, which the government now says include developing a carbon offset scheme in the Indo-Pacific.
Any more funding for fossil fuel operations?
Yes. One of the most significant climate announcements in the budget is $279.9m over a decade to establish a “below baseline crediting mechanism” to help big emitters reduce energy consumption and emissions.
This refers to what is known as the “safeguard mechanism”, which was supposed to prevent national industrial emissions increasing above historical levels. In practice, as Guardian Australia has reported, industrial businesses have been allowed to lift their emissions limits – known as baselines – without penalty.
Cutting through the budget spin: breaking down the Coalition’s cash splash Read more A program to award carbon credits to polluters that reduce their emissions below their baseline level could be a significant step – but only if baselines are reduced over time to help cut national CO2 emissions, and companies that emit above their baselines are required to buy credits.
Under this design, the errant polluters would buy credits from the companies that cut emissions, creating a form of carbon market, and there would be an incentive for everyone to clean up their act.
If the amount industrial polluters were allowed to emit was meaningfully reduced year-on-year it would eventually effectively make it uneconomic to emit CO2 in many cases.
But the government has said it will not introduce anything that looks like carbon pricing. It suggests it may commit hundreds of millions of taxpayer dollars to just help profitable industrial facilities cut emissions. The design of this mechanism will be key.
What about other technologies – clean cars, for example?
There is nothing in the budget for electric vehicles, continuing the government’s position of resisting a global push to offer incentives to rapidly expand the use of clean cars.
But the government will pay an undisclosed sum to attempt to shore up petrol production in Australia, and has kicked in another $50.7m to build oil stocks after the announcement that two of the country’s remaining four refineries would close.
There is also some money to improve understanding of how much carbon is stored in soil, including more than $100m over the next two years to help farmers improve measurement.
This is in line with the government last year announcing soil carbon as one of five priorities in its low-emissions technology statement.
What about nature?
It loses out, again. The Coalition has significantly cut funding for environment programs since coming to power and there is little change here.
An analysis by the Australian Conservation Foundation this week calculated funding for biodiversity protection – threatened species and ecosystems – had fallen 28% since the Coalition was elected in 2013.
This budget includes another $29.1m to protect native species from feral and invasive pests, but spending on biodiversity is then forecast to fall over the next three years until it is less than half what it was in 2013.
There is $29.3m dedicated to changes to the national environment laws, the Environment Protection and Biodiversity Conservation Act, but the bulk will go to increasing the speed at which development proposals are assessed and approved.
Reminder: Graeme Samuel, the former competition watchdog head, found in an official review that the EPBC Act was failing, and the government would be accepting the decline of environmental landmarks and the extinction of threatened animals, plants and ecosystems unless it embraced fundamental reform.
The government has a better story to tell on ocean protection, where it has confirmed a previous announcement of $100.1m to restore “blue carbon” ecosystems.
It includes $40m for marine parks, including plans to expand protection into the Indian Ocean off northern Western Australia. This has been applauded by scientists and local fishers.
Anything else?
The government has increased support for its promise to improve recycling, including $67m to divert organic food waste away from landfill.
There is also $209.7m over four years for a previously announced Australian Climate Service that will “transform the Commonwealth’s capacity to anticipate and prepare for more extreme weather events”.
This has been welcomed by the science community and some in industry, which is increasingly aware it will need this information as extreme weather is exacerbated by global heating.
Where to from here?
Big decisions on climate lie ahead. The government is due to release a long-term emissions reduction strategy before the climate summit in Glasgow in November and before then will come under renewed pressure to do more when Scott Morrison is a guest at the G7 leaders’ summit in England next month.
All G7 member countries have shifted their focus to climate commitments over the next decade, announcing more ambitious goals for 2030.
The British hosts have invited four democracies who are yet to take that step – Australia, India, South Korea and South Africa – for a reason.
On nature protection, the government is still trying to change the EPBC Act to shed some of its responsibilities and hand greater approval powers for development to the states.
It is yet to formally respond to the Samuel review, but has effectively rejected a recommendation that it introduce stronger national environmental standards to improve wildlife protection.
Despite warnings the country faces an extinction crisis, there is no suggestion that will change.
Links
- (AU Canberra Times) Mixed Bag On Climate In The Federal Budget
- (AU RenewEconomy) Cash For Gas And Big Emitters In Another Miserly Budget For Clean Energy And EVs
- Budget throws loose change at environment and climate
- Coalition hands gas subsidy to billionaire as UN calls for rapid methane cuts
- Morrison dodges net zero, throws cash at blue hydrogen and CCS instead
- The Government’s Lacklustre Climate Budget Is Under Fire, Just Like The Planet One Day
- Budget 2021-22: Renewables Pretty Much Ignored
- Federal Budget 2021: Australia’s green recovery failure costs jobs
