Climate change: out on a limb

Budget Review 2012–13 Index

Anita Talberg

The Government has put all its climate change eggs in one basket: the Clean Energy Future (CEF) package and its Regulator. Perhaps it hopes the establishment of a price on greenhouse gas emissions will obviate the need for other mechanisms to reduce emissions. Or perhaps it has exhausted most of its funding in providing assistance to cushion the impact of the CEF package. Whatever the reason, it could be a risky move, especially against the current political backdrop.

Clean Energy Regulator

Pre-Budget media leaks suggesting that a third of the Department of Climate Change and Energy Efficiency (DCCEE) staff would be axed have proved inaccurate[1]. While DCCEE itself loses 344 staff, its own agencies—the Climate Change Authority, Low Carbon Australia and the Clean Energy Regulator (CER)—pick up a total of 305. This brings the difference to just 39 jobs. The CER, which replaces three existing statutory bodies—the Carbon Credits Administrator, the Greenhouse and Energy Data Officer and the Office of the Renewable Energy Regulator—and is charged with administering the CEF, will employ 355 staff when it reaches its full complement.[2]

Climate change programs cut, delayed or ending

Many existing climate change and renewable energy programs are being discontinued because the Government considers them either redundant under a carbon price or just not value for money. As was anticipated on 28 February 2012 when its sudden closure was announced, funding for the Solar Hot Water Rebate has not been extended.[3] The controversial Green Loans/Green Start and Home Insulation Programs have also come to an end.[4] The popular Solar Cities program, which has seen nine Australian cities trial sustainable energy methods, will end as planned in mid-2013.[5] The National Solar Schools Program (NSSP), which was initially to end in 2015 but was brought forward by two years in the last Budget, will finish in 2013 despite its success.[6] Budget papers in 2010–11 indicated that $49.8 million would be available for NSSP grants until July 2013 yet less than $15 million looks to be disbursed over that time. [7]

The Connecting Renewables to the Grid program has been delayed, with a total of $72 million moved to beyond the forward estimates.[8] This program was designed to help deliver renewable energy from remote and regional areas. Similarly, funding for the Low Emission Technology Demonstration Fund has been delayed until 2013–14 and reduced by 80 per cent.[9]

Two programs that had been under consultation will not eventuate. The first is the Cleaner Future for Power Stations package. It would have imposed stringent emissions performance standards on new coal-fired power plants.[10] Under a carbon price, the Government has decided that an emissions standard is redundant and will not proceed with its implementation.[11] The second is the 2010 election commitment for Tax Breaks for Green Buildings. Despite undertaking extensive and promising consultations with stakeholders, the Government is discarding the scheme. It claims that a comparable role is filled by the Clean Energy Finance Corporation established under the CEF to provide loans for sustainable energy solutions.[12] A diverse suite of programs to deal with greenhouse gas emissions is thus being reduced, and the replacement is the single CEF package.

Programs outside the CEF

Those programs that have survived or have been introduced are sparse and seem arbitrary. The Minister for Climate Change and Energy Efficiency announced three new funding streams: $37.1 million over four years towards harmonising State and Territory laws on the energy efficiency of appliances; $3 million in 2012–13 for climate change adaptation activities in response to the Productivity Commission’s draft report on barriers to such endeavours; and $2.8 million additional funding over four years for energy efficiency in buildings ($2.4 million of which is redirected from the Green Building Fund).[13] The Low Carbon Communities plan, a 2010 election promise to assist local councils in acting on climate change, has survived this Budget; as has the Energy Efficiency Information Grants program that is available to small and medium businesses.[14] The Carbon Capture and Storage (CCS) FlagShip has had some funding pushed out beyond the forward estimates, but monies for the National CO2 Infrastructure Plan and Global CCS Institute are unchanged.[15] For the small offering of programs DCCEE is administering outside the CEF, it is unsurprising that average staffing levels have been reduced by more than 30 per cent.

Advertising the CEF

The Government has a strong interest in seeing that the CEF is understood and accepted. In June 2011, the Minister for Climate Change and Energy Efficiency announced $12 million for a climate change public information campaign.[16] This does not appear in the DCCEE Portfolio Additional Estimates Statement of November 2011. However, there is funding of $30.7 million in 2011–12 for an ‘Advertising Campaign’ under the CEF.[17] It is not clear whether this program is the same as the CEF ‘Public Information Campaign’ which appears in the DCCEE portfolio budget statement this year with $21.6 million earmarked for 2011–12 and $2 million for 2012–13.[18]

There are two additional advertising efforts: a program for household advice on improving energy efficiency costed at $5.8 million over four years announced in the 2011–12 Mid-Year Economic Fiscal Outlook; and a plan to provide information on the CEF Household Assistance Package funded at $36.1 million over two years from 2011 to 2013.[19] The Opposition has criticised these expenses as an ‘outrageous waste of taxpayers’ money’.[20]

Conclusion

The Opposition has vowed to repeal the CEF if it wins the next election.[21] This would leave only a smattering of programs to reduce greenhouse gas emissions. This could play in favour of the Opposition, which intends to disband DCCEE and significantly reduce overall public service staff numbers under its governance.[22] The challenge for a Coalition Government will be unravelling the associated tax reforms and generous welfare increases, or finding a new way to compensate for the loss of CEF revenue.



[1].       M Franklin, ‘Labor takes axe to green bureaucrats to bolster surplus’, Australian, 4 April 2012, p. 1, viewed 10 May 2012.

[2].       G Combet, ‘Clean Energy (Consequential Amendments) Bill 2011’, Second Reading Speech, House of Representatives, Debates, 13 September 2011, viewed 10 May 2012; Australian Government, Budget strategy and outlook: budget paper no. 1: 2012–13, Commonwealth of Australia, Canberra, 2012, p. 6–72, viewed 10 May 2012.

[3].       A Talberg, ‘The sun sets on solar hot water rebates’, FlagPost, 29 February 2012, viewed 10 May 2012; and Australian Government, Portfolio budget statements 2012–13: budget related paper no. 1.4: climate change and energy efficiency portfolio, Commonwealth of Australia, 2012, p. 26, viewed 10 May 2012.

[4].       Portfolio budget statements 2012–13, climate change and energy efficiency portfolio, op. cit., p 26.

[5].       Ibid.

[6].       A Talberg, Budget 2011–12: Renewable energy, Budget Review 2011–12, Parliamentary Library, Canberra, 2011, viewed 10 May 2012; and Portfolio budget statements 2012–13, climate change and energy efficiency portfolio, op. cit., p 26.

[7].       Australian Government, Budget measures: budget paper no. 2: 2011–12, Commonwealth of Australia, Canberra, 2011, p. 123, viewed 10 May 2012; and Portfolio budget statements 2012–13, climate change and energy efficiency portfolio, op. cit., p. 26.

[8].       Australian Government, Portfolio budget statements 2012–13: budget related paper no. 1.17: resources, energy and tourism portfolio, Commonwealth of Australia, Canberra, 2012, p. 58, viewed 10 May 2012.

[9].       Portfolio budget statements 2012–13: budget related paper no. 1.17: resources, energy and tourism portfolio, op. cit., pp. 35, 38.

[10].     Department of resources, energy and tourism (DRET), ‘A Cleaner Future for Power Stations package’ DRET website, viewed 10 May 2012.

[11].     Australian Government, Draft Energy White Paper – Chapter 6B, Commonwealth of Australia, Canberra, 2011, p. 162, viewed 10 May 2012.

[12].     G Combet (Minister for Climate Change and Energy Efficiency), Carbon price to cut pollution, support jobs and assist households, media release, 8 May 2012, viewed 10 May 2012.

[13].     Ibid; and Australian Government, Budget measures: budget paper no. 2: 2012–13, Commonwealth of Australia, Canberra, 2012, pp. 99, 100, 227, viewed 10 May 2012.

[14].     Portfolio budget statements 2012–13, climate change and energy efficiency portfolio, op. cit., p. 26.

[15].     Portfolio budget statements 2012–13: budget related paper no. 1.17: resources, energy and tourism portfolio, op. cit., p. 25; and Australian Government, Portfolio budget statements 2011–12: budget related paper no. 1.16: resources, energy and tourism portfolio, Commonwealth of Australia, Canberra, 2011, p. 31, viewed 10 May 2012.

[16].     G Combet (Minister for Climate Change and Energy Efficiency), Climate change public information campaign, media release, 16 June 2011, viewed 10 May 2012.

[17].     Australian Government, Portfolio budget statements 2011–12: budget related paper no. 1.4: climate change and energy efficiency portfolio, Commonwealth of Australia, 2011, p. 23, viewed 10 May 2012.

[18].     Portfolio budget statements 2012–13, climate change and energy efficiency portfolio, op. cit., p. 23.

[19].     Australian Government, Mid-Year Economic Fiscal Outlook 2011–12, Commonwealth of Australia, Canberra, 2011, p. 212; and Budget measures: budget paper no. 2: 2012–13, op. cit., p. 140.

[20].     D Wroe, $36m ad blitz under attack, WA Today, 10 May 2012, viewed 10 May 2012.

[21].     M Grattan and M Wroe, ‘Abbott's blood oath to repeal carbon tax, The Age, 13 October 2011, viewed 10 May 2012.

[22].     S Maher, ‘Department of Climate Change for chop: Hockey, Australian, 4 August 2011, p. 5, viewed 10 May 2012; and ‘Cut public service before welfare: Hockey, AAP, 4 May 2012, viewed 10 May 2012.

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