In Crikey yesterday, Catherine Wilson reported on the challenges facing the Solomon Islands and other Pacific neighbours to adapt to the adverse effects of climate change. But in Australia, there’s been little publicity about the sweeping changes the Abbott government has made to our international climate financing obligations. They’re not just stopping the boats, they’re stopping the cheques.

At the 2009 global climate summit in Copenhagen, Organisation for Economic Co-operation and Development countries pledged commitments towards a target of US$100 billion a year by 2020 to assist developing countries to cope with the climate emergency. This climate financing is a central pillar of the global climate negotiations, and Australia’s fair share of that target amounts to more than $2 billion a year, funded from public and private sources.

Under the Rudd and Gillard governments, Australia provided about $200 million a year in so-called “fast start” finance, drawn from the expanding Australian aid budget. It’s clear Australia will need a ten-fold increase in international climate financing from public and private sources in less than a decade if we are to meet our international obligations.

But now there is bipartisan commitment to abandon projected growth in the aid budget. The Abbott government has moved to reduce the financial commitments that provide crucial resources for our Pacific neighbours — resources that can protect infrastructure, support water and food security, and assist people’s health and livelihoods in the face of extreme weather events.

At the November 2013 Commonwealth Heads of Government Meeting in Sri Lanka, the Abbott government ditched Australia’s pledge to contribute to the Green Climate Fund, an innovative new funding mechanism for dealing with the effects of climate change. In their final communique, CHOGM leaders “recognised the importance attached to both the operationalisation and the capitalisation of the Green Climate Fund”. But a footnote recorded that:

“Australia and Canada had reservations about the language of paragraphs 18, 19, 20 and 21 and indicated that they could not support a Green Capital [sic] Fund at this time.”

This decision has astounded international observers, as Australia had played a central role in the creation of the fund. AusAID’s former deputy director-general Ewen McDonald served as co-chair of the fund’s board for its first year of operations, and Australian officials have played a crucial role in determining the fund’s mandate, structure and policies.

A spokesperson for the Department of Foreign Affairs and Trade would not confirm whether Australia would continue the same level of involvement with the Green Climate Fund and other multilateral climate financing mechanisms, like the Kyoto Adaptation Protocol Fund. The spokesperson would only say: “Australia’s co-chair term ended on 10 October 2013, and Australia will consider its future engagement with the board in due course.”

This decision comes at the same time as other sweeping changes to Australia’s aid program, with the abolition of AusAID as an independent statutory body and the abandonment of pledges to increase aid levels. The Abbott government has merged AusAID’s functions into the Department of Foreign Affairs and Trade, which takes over responsibility for day-to-day management of the $5 billion aid program. As a budget measure, the Abbott government has pledged a reduction of 12,000 staff in the public service, so the merging of DFAT and AusAID will involve significant cuts to the number of experienced personnel charged with implementing the aid program.

The decision to abolish AusAID as an independent agency follows similar actions by conservative governments in Canada and New Zealand. Australia is also following the Key government in New Zealand to reorient aid towards economic growth, infrastructure and trade, with a greater focus on “the national interest”.

While Foreign Minister Julie Bishop has been distracted by disruption to relations with Indonesia due to spying allegations and asylum seeker policy, Environment Minister Greg Hunt has systematically been alienating our Pacific neighbours. Even as Hunt refused to travel to the 2013 Warsaw climate summit, Australian negotiators disrupted talks on the “loss and damage” agenda (the devastation to land, water supply, agriculture and infrastructure caused by delays in reducing greenhouse gas emissions).

Loss and damage has been a central focus for Pacific Island negotiators, and Australia’s tactics led to a short walkout by the “G77 plus China” delegates, the 132-member bloc chaired by Fiji during 2013. The final decision on this agenda was a disappointment to negotiators for the Alliance of Small Island States, as loss and damage will now be listed as part of adaptation rather than as a separate mechanism.

In December, Hunt also gave the go-ahead for the expansion of coal export facilities at Abbott’s Point in Queensland, opening the way for increased coal exports from the Galilee Basin. At a time when the small island state alliance is arguing that coal exports should be reduced to limit greenhouse gas emissions, this new policy direction will be an ongoing tension within the Pacific Islands Forum when regional leaders meet in Palau next July.

Although Australia remains the major provider of aid, trade and military co-operation in the Pacific islands region, there are a number of other new players that are expanding diplomatic and economic relations with forum island countries. In the same month as the Abbott government overturned Australia’s policy on climate finance, China announced US$1 billion in concessional loans for the Pacific islands, with another $1 billion credit line from the China Development Bank.

*Nic Maclellan’s full feature will appear in the next edition of Islands Business

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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