If you were looking to the 2009-10 Budget for measures that would restore the climate credibility of the Rudd Government you’ll be disappointed. What is on offer is underwhelming and predictably tilted toward polluting interests.

The “wow” factor — to borrow a phase from The Hollowmen — is provided by the $4.5 billion Clean Energy Initiative, which includes $3.5 billion of new money. Naturally, this funding is spread out over the term of his natural life, lowering the ‘wow’ and raising doubts about whether it will materialise (remember the Howard Government’s underspend on the Safeguarding the Future and Measures for a Better Environment packages?).

The bulk of the new money under the initiative is directed toward two big programs: an additional $2 billion for large-scale carbon capture and storage (CCS) projects and $1.4 billion for a solar flagships program. The Government is also establishing Renewables Australia to promote RD&D in the sector, with $100 million in new money to support its efforts.

The downside of the initiative — and the Rudd Government’s climate policy more generally — is the weighting given to coal interests. The group of technologies that fall under the ‘clean coal’ banner might one day play a significant role in helping to cut greenhouse gas emissions and there is no justification for discriminating against them when distributing government assistance. However, the Government’s climate policy is hopelessly skewed toward coal.

The $2 billion for CCS in this budget comes on the back of a 2008-09 budget that contained a generous package of clean coal assistance. Before that we had a decade of coal-friendly budgets under the Howard Government. It is about time some balance was injected into the Federal Government’s energy research assistance measures.

Outside of the Clean Energy Initiative, it is slim pickings on climate change. There is $164 million in new money for energy efficiency, the bulk of which goes to the National Energy Efficiency Initiative — a $100 million program “to develop an innovative smart-grid energy network.” There are also relatively small amounts of money for CPRS policy development and improvements in carbon accounting. And the Department of Climate Change’s offices are getting renovated at a cost of $13.4 million!

If you wade through the budget papers, the remainder of the measures are mostly old programs either rebadged or simply re-spun. The Australian Carbon Trust, which was announced with the recent changes to the CPRS, gets a mention, as do a raft of other measures outlined in previous budgets or the White Paper.

All in all, this budget contains little to get excited about on the climate front. When placed against the amounts pledged for road, rail, port and telecommunications infrastructure, the climate programs are trivial.

So much for climate change being the “great moral challenge of our generation”, as the Prime Minister described it. The path charted by the Government consists of a weak, inefficient and inequitable emissions trading scheme, an investment strategy that is skewed toward polluters and an approach to international negotiation where Australia stays tucked in at the tail-end of the peloton. The Government needs to do a lot more if it wants to live up to the climate change hype it generated before the 2007 federal election.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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