Budget Not Big on Climate

Last night the Australian Treasurer, Peter Costello, handed down the budget for the nation for the next financial year (2007-08).

There were tax cuts, big increases in spending on higher education, but surprisingly little in response to all the community hysteria over climate change.

There was not a word on a possible carbon tax or emissions trading system – just an $8,000 subsidy for solar panels.

The treasurer reiterated that the government will spend $10 billion over 10 years to conserve and sustain Australia’s water supply – this money will mostly go to the Murray Darling Basin.

You can read more here: http://www.budget.gov.au/2007-08/overview/html/index.htm .

20 Responses to Budget Not Big on Climate

  1. Luke May 9, 2007 at 9:12 am #

    When interviewed on lack of climate change investment apres budget, Costello said he the government was awaiting a carbon trading report. When pressed if keeping their powder dry for the election Costello stonewalled and kept repeeating “we’re awaiting the report”.

    I suspect more to come !

  2. Blair Bartholomew May 9, 2007 at 12:52 pm #

    Dear Luke
    Do you really think a government facing a strong opposition, with polls predicting the opposition to win, will announce anything that will impact in a serious way on voters’ current standard of living?
    Unless I have misread completely the estimates of the magnitude of the costs necessary for the current generation to incur in order to minimize the impact of climate change on future generations, then no government or alternate government is going to win an election promising a reduction in the voters’ current standard of living.
    Sure throw a few millions into feasibility studies, new or expanded climate change institutes but for goodness sake don’t say voters will have to pay substantially more for electricity, fuel etc.

  3. SJT May 9, 2007 at 12:57 pm #


    how about paying substantially more for food, because that is what is going to happen with no water for irrigation.

  4. Anthony May 9, 2007 at 1:20 pm #

    Blair, yes, you have completely misunderstood the economics of mitigating/adapting to climate change. Specifically, reducing emissions doesn’t cost that much and the longer we wait, the more costly it gets…. so in a nutshell you couldn’t be further from the mark.

    The average Australian household spends more on cigarettes and alcohol than on energy… do the maths mate. Few less booze ups, few less smokos… heaven forbid we may pay more for our energy and less for our health care.

    Was anyone else struggling with how they get away with doubling the domestic PV rebate while Turnbull goes on about PV as the most costly way to reduce emissions?

    We’ve know energy efficiency is the cheapest, easiest way to reduce emissions. Did anyone find any meaningful commitment to efficiency?

  5. Luke May 9, 2007 at 1:38 pm #

    Dear Blair,

    In answer to your question. “No!” That wasn’t the point of my comment above. Simply more “announcements” to come.

    Indeed I have often said I am dubious how much “pain” the electorate will take to “address” AGW. Many people think in the current carnival atmosphere that all you need to do is change your light bulbs (yes I’ve done mine !).

    Of course, Rog will groan, but with AGW you can pay now, or your kids and grandkids can pay later. Or keep paying later.

    However, as a nation we don’t want to be left out in the cold with old “dirty carbon” technology, old plant and miss the out on significant opportunities for innovation and efficiency. We don’t want to be discriminated in the international market place for being carbon dullards either.

    California is the grand experiment in getting on with it rapidly.

    Actually Costello just now on TV has reminded us that a carbon tax won’t be cost free, and will cost more the more you cut. He has just mused how fast should you move over what time period.

    And of course what happens depends on who is in power.

    Choose wisely grasshopper.


  6. rog May 9, 2007 at 4:38 pm #

    One of my greenie lamps just died, it is only 3 years old! The other one, in the same lamp, is fine so it aint me. But the electorate will cop CFLs but not a C tax on fuel

  7. Blair Bartholomew May 9, 2007 at 4:47 pm #

    I did not think my comments would elicit such a response.
    Luke I agree with your comments; you are one of the few climatologists who has some grasp of what the impact on the Western world will be if the globe as a whole is to really come to grips with AGW. Are we to tell the Chinese and Indians to curtail their efforts to increase their standard of living so that future generations will be better off? Hardly. While the Treasurer may acknowledge that a carbon tax/cap “won’t be cost free, and will cost more the more you cut. He has just mused how fast should you move over what time period.” there are are no estimates of the impact on Australian voters of any serious effort to combat climate change. Ditto the opposition.

    Anthony it does not matter if the average Australian voter spends more on cigarettes and booze than on energy ( you could have added restaurant meals/overseas travel/ 3 bathroom houses etc)you still have to convince the Australian voter or rather the ALP/ coalition parties that imposing costs on the electorate will not result in them not being elected or at least the outcome will be politically neutral.
    And Anthony how can you say “reducing emissions doesn’t cost that much”? Is this wishful thinking or do you think that people who booze/smoke etc don’t count? And finally where did I disagrere with the statement “the longer we wait, the more costly it gets….”

  8. cinders May 9, 2007 at 5:10 pm #

    The budget did include a key investment in GHG emission removals. One that mirrors the recommendation of the recent IPCC mitigation report, and that is to invest in trees as carbon sinks.

    During the Treasurer’s budget speech, he announced that investors in forestry carbon sinks will be able to utilise the horticulture taxation arrangements as of 1 July 2007, with immediate deductibility for the first five years, as an incentive to invest in carbon credits.

    As trees grow they naturally store carbon from the atmosphere.

    Australia’s tree plantations are sequestering 20 million tonnes of carbon annually, helping Australia reach its Kyoto emissions target of 108% of 1990 levels
    This is on top of the Governments investment in addressing deforestation within the region that will see a $200 million investment that will support new forest planting, limit destruction of the world’s remaining forests, promote sustainable forest management, encourage contributions from other countries. [ A priority identified in the Stern review]
    The PM has also promised to honor the RFA and the Tasmanian Community Forest Agreement that will ensure that the Nations managed native forests and plantations will continue produce timber products that currently store over 230 tonnes of carbon.

  9. Hasbeen May 9, 2007 at 5:27 pm #

    I just heard that fool Rudd saying that “We are going to make the big polluters pay” in that typically viscous voice used to talk about “BOSSES”. Doesn’t he realise that, if I believed in AGW, he is talking about power stations, & consumers, & therefore, me.

    The fool is even talking about Kyoto, now, when we all know what a pile of bull it is. He is prepared to damage us just to buy a few radical ratbag greenie votes. All we can hope is that enough people wake up, & see him for the ball of slime he is.

  10. Luke May 9, 2007 at 5:32 pm #

    Blair – I think it’s important though for us not to dig ourselves in too deep in the old ways. We need to keep the agenda moving somehow lest the rest of the world out-techs us in this area or all the carbon solutions become expensive import items. But yes – how to do a “soft” landing with this issue is not simple.

    But where I defend is that it’s not rational to mindlessly attack the science just because one doesn’t like the implied policy and political response. P.S. Never said I was a climatologist – just a slightly informed punter.

    To Cinders point I think trees (forests, woodlands and scrub) are a valuable national sequestration asset. Before the Qld & NSW tree clearing bans I was hopeful that grazing industry might be able to value its carbon stocks. This would provide an important asset to improve a declining terms of trade, institute flows of capital from cities to the bush, and provide funds for land degradation remediation and biodiversity conservation (which all costs). But alas political expediency at the state and federal level has left the graziers high and dry. Needs a re-visit IMO. And Motty is right (shhh don’t tell him this) but we should be valuing carbon in the landscape (above and below ground) and post-harvest (timber products) much more rigorously.

  11. chrisl May 9, 2007 at 6:13 pm #

    Anthony. Please explain how reducing co2 emissions by 60 % (Labor Party policy) “doesn’t cost all that much”
    How much has it cost you so far?

  12. Aaron Edmonds May 9, 2007 at 8:00 pm #

    I commend the government’s announcement on taxation benefits for those creating carbon sinks. This is just the announcement to fuel further investment in more sustainable agricultural systems and in particular the sandalwood nut industry. However predictions of unabated growth in sandalwood plantings for 2008 will likely see shortages in some Acacia seed supplies, potentially sandalwood nut supplies and nursery space. The old capacity constraints story. Of course this is good for those who were able to see the future before it arrived. I’d say Acacia seed and sandalwood nuts suppliers may well have a couple of windfall years ahead …

  13. SJT May 10, 2007 at 9:13 am #


    What is it going to cost us to do nothing?


    The drought is may affect power generation now.

  14. cinders May 10, 2007 at 9:46 am #

    As mentioned the Australian governemnt’s $200 million regional policy addressing deforestation has the potential to reduce greenhouse gas emissions and to create carbon sinks.
    It also has the potential to create wealth, alleviate poverty and provide a sustainable future to developing societies.
    Former Australian Ambasador to GATT Alan Oxley had an interesting piece in the Australian recently http://www.theaustralian.news.com.au/story/0,20867,21470809-7583,00.html, he made the following thought provoking observation:
    “The initiative also puts Australia in a position to get global policy on deforestation right. Until now, the global politics on forestry in industrialised countries has been dictated largely by Greenpeace and WWF which give priority to fixing the environment over the eradication of poverty. As a result of their influence, forest policy in development institutions such as the World Bank and European development agencies, which take a lead from it, has become skewed against the development goals of poor countries. ”

    It is becoming even more apparent that trees are the answer to social economic and environmnetal issues!

  15. anthony May 10, 2007 at 9:49 am #

    Sorry Blair, bit of a knee jerk reaction by me. The way I read the tone of your post was that reducing emission (in Australia – my assumption) is all a bit too hard and the lifestyle impacts will be too great. You didn’t say the costs don’t increase with time, but your tone certainly implied the costs make taking action all a bit too hard.

    I agree, once you factor in global considerations, the task complexity blows out (alot). Nevertheless, I beleive if we set ambitious targets in Australia, the flow on benefit of developing technologies and systems which we can deploy around the world will far outweigh any costs incurred.

    There is obviously political risk with taking action on climate change but the polls seem to show far more in favour of action than against so I would argue so long as the politicians do it well, there is no political barrier. Perhaps I am oversimplifying the power of marginal seats…

    The only logic against taking action on climate change in this country is getting carbon intensive industries offside. But we have seen even these industries publicly calling for action on climate change (who knows what goes on behnid the scenes…). Either way, if our politicians can’t stand up to them our economy will be so dated in a decade it is not worth contemplating.

    My point about the booze and cigarettes is that it highlights out relative values. Tackling climate change is not just about giving carbon a price. It’s about tackling fundamental social issues that mean the vast majority of the population is locked in to habitual behaviour that imposes huge costs on our economy and doesn’t do those individuals any favours.

    If, as a nation, we tackled energy efficiency like we drank beer, smoked cigarettes etc we’d get 30% reductions without blinking.

    Chrisl – I live in an apartment with my partner. We don’t have a car, we use under 1.5 kWh electricity, the only red meat we eat is kangaroo, we manage our food miles etc. My emissions are easily under the 60% reduction relative to the average australia. This has cost me nothing in terms of lifestyle or dollars – in fact, I save buckets of cash because of it.

    Meanwhile my taxes fund huge subsidies to build roads I will never need, clean coal research for coal plants that are running dry (latest price at $75MWh in parts of the country – wind getting viable anyone?), network infrastructure I don’t need (look up costs of peak power), an army for wars I despise ($2B on recruitment on retention!!!) and it goes on.

    Chrisl – 60% reduction costs me nothing. Spending revenue as we do makes me shake my head and wonder what planet the treasurer has come from.

  16. Anthony May 10, 2007 at 10:02 am #


    Looks like the message is sinking in. Hang on for the ride

  17. SJT May 10, 2007 at 11:31 am #

    Wonder how his national fish wrapper, The OZ, is going to cope with that?

  18. SJT May 10, 2007 at 11:33 am #

    In terms of the actual topic, though, Howard and his government have really blown their credibility on the topic. He really is just indulging in gesture politics while Australia burns. That will be the last nail in his political coffin.

  19. Anthony May 10, 2007 at 12:46 pm #

    SJT – I agree, but not convinced he will be punished by the voters – hope I am wrong.

    How do they get away with rubbishing solar panels all year, Turnbull in particular, and then double the rebate?1?! Surely by their own admission their policies are inefficient and ineffective

  20. rog May 10, 2007 at 1:36 pm #

    Anybody wanting to back their opinions with money can do so; the gap is closing daily


Website by 46digital