The climate and environment Budget for 2010-11 is a dull affair marked by program cuts, clean-ups and a marked lack of policy direction. The major news is the additional clarity the government has given on the future of the Carbon Pollution Reduction Scheme (CPRS). The Budget papers state:

The Government will not introduce the CPRS until after the end of the current commitment period of the Kyoto Protocol and only when there is greater clarity on the actions of major economies including the US, China and India. This means the Government will not move to legislate the CPRS before the end of 2012, and will only do so after this time if there is sufficient international action.

Over the past few years, the government told us that delay is the strategy of the political coward; now it’s official government policy.

In place of the CPRS, the government is offering more “bucket-of-money” renewable energy and energy efficiency programs, with $652 million in left-overs from the CPRS is being transferred into the grandiosely named Renewable Energy Future Fund, which will be applied over four years to support large — and small-scale renewable energy projects and additional energy efficiency initiatives for business and households.

The lessons about the inefficiency and ineffectiveness of these types of programs have seemingly been forgotten. And despite the hold ups and underspends that have plagued existing renewables programs, the government wants us to believe it will spend $394 million of this money in two years between July 2010 and June 2012. The other curious aspect of this program is how it will fit in with the Renewable Energy Target, which already provides an incentive for the uptake of renewable energy and is now divided into two parts; one for small-scale renewables, the other for large-scale projects. No doubt the industry will be looking closely at how the government plans to differentiate this program from those that already exist.

Positively, the government is providing $340 million for international climate initiatives; $178.2 million over two years for international adaptation, an additional $56 million over two years for the International Forest Carbon Initiative, and $106 million over four years for multilateral climate change finance. However, this appears to be less than Australia’s fair share of the $US10 billion a year for the period 2010-12 pledged by developed countries under the Copenhagen Accord. It is also interesting that the government is rolling its international climate funding into its aid funding target of 0.5% of GDP by 2015.

Beyond the Renewable Energy Future Fund and international measures, there is little of note in new climate initiatives. There is $30 million over two years to run a national climate change education program — something the sceptics will no doubt appreciate. The remainder of the money from the failed home insulation program is being redirected into the Renewable Energy Bonus Scheme and then redirected back again to pay for the clean-up of the pink bats mess via the Home Insulation Safety Program, Foil Insulation Safety Program and Insulation Industry Assistance Program. The Green Loans Scheme is also being redesigned for the second year in a row with $109 million being provided for 600,000 home assessments.

The environment, water and heritage Budget is best described as frugal. Caring for our country has lost $80 million over four years, $180 million has been cut from the National Rainwater and Greywater Initiative over five years, and the National Urban Water and Desalination Plan has lost $70 million over two years. Given the limited evidence on the effectiveness of these measures, the cuts are probably justified in the current financial environment.

On the spending side of the ledger, there are only two new initiatives of note. The first is that the government is taking up the recommendation of the Hawke Review and establishing a National Plan for Environmental Information, worth $18 million over four years.

The idea of establishing a comprehensive national environmental database and robust set of national environmental indicators has been around for some time (the Howard Government even had a go at it before letting it slide off the agenda). However, this is the first time a government has made a meaningful commitment to getting it off the ground. Many might see this as a small measure — and in many ways it is — but it has the potential to provide significant benefits in research and policy development in the years to come.

The second big environment measure is $23 million over five years for the implementation of the National Waste Policy. This is hardly the type of thing that will set the world alight. Yet it is progress on a long-promised initiative.

Other things of note are that the government has brought forward $100 million in funding for water buybacks in the Murray-Darling Basin and reappropriated more than  $100 million to the Department of the Environment for the laudable Working on Country program (it provides employment opportunities for indigenous Australians in environmental management).

All in all, the 2010-11 climate and environment Budget is one to forget.

Peter Fray

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