Rudd slashes climate programs to pay for carbon politics | RenewEconomy

Rudd slashes climate programs to pay for carbon politics

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Rudd protects main renewables programs, but scacrifices CCS program, and funds to support bidoversity initiatives and savings for manufacturers and farmers to pay for the accelerated ETS. He says coal has a future, but he was in Queensland, so he had to say that didn’t he?

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On Monday, Prime Minister Kevin Rudd made us wince as he confirmed plans to take the thought bubble away from Tony Abbott and transition to an emissions trading scheme a year early. Today, he made many cry as he identified the victims who would have to make way for his populist ploy.

The Rudd government has taken an axe to a series of climate change programs to make up the budget shortfall caused by the proposed accelerated transition to a traded emissions scheme to July 1, 2014. The axe has not touched the main renewable energy programs, but also will leave in place compensation for trade exposed and energy intensive industries.

The popular, and much praised, Clean Technology Investment Program is one of the major victims – with impacts on solar and energy efficient lighting – along with carbon capture and storage programs, and the biodervisity fund and the farming support fund.

The Energy Security Fund, which shielded mostly brown coal generators from the carbon price, will end one year early as the price falls from more than $25/tonne to a current estimate of around $6/tonne.

Funding to the Clean Energy Finance Corporation and the Australian Renewable Energy Agency remained untouched. Rudd and his key minister, Treasurer Chris Bowen and Climate Change Minister Mark Butler, sang the praises of the renewable energy target, talking of 24,000 jobs created and “tens of thousands in the future”.

However, the government did not engage in any discussion about lifting the ambition of emission reduction target, saying it would await the findings of a report by the Climate Change Authority.

Other cuts were delivered to fringe benefits for cars ($1.8 billion) as part of the effort to claw back $3.8 billion lost from ending the fixed price on carbon a year early.

Rudd attempted to pitch the deal to consumers, saying that the package would deliver savings to households of $380 a year, as a result of reduced electricity prices and because they would retain their support packages. He said the Coalition’s Direct Action package would result in an increased cost of $1200 to households.

But some of the programs cut or shortened will be lamented – particularly the CTIP, the farming support scheme and the biodiversity fund. Environmental groups wondered why diesel rebates for miners were not targeted (Rudd could probably explain that, harking back to his proposed mining tax)

The $800 million CTIP was only recently accelerated by the Gillard government because of its success in reducing emissions and delivering energy savings to manufacturers.

It encouraged a range of initiatives, from solar PV installations, more efficient lighting, upgraded and more efficient equipment, and even wind and biogas installations. Some 25 per cent of projects had achieved reductions in emissions intensity of more than 50 per cent. Some in the solar industry described it as the most effective means of breaking down barriers for commercial scale solar.

The loss of $213 million from the biodiversity fund was lamented by environmental groups. “Our natural environment, including the Great Barrier Reef, our forests and tropical savannahs, are being impacted by climate change now – it’s important we invest more in protecting, managing and restoring these landscapes so they can naturally store carbon more effectively,” ACF’s Don Henry said.

A further $143 million has been cut from the $429 million Farming Futures Fund, which was focusing on technologies and techniques for emissions reductions, including carbon farming initiatives – ironically the main set piece of the Opposition’s Direct Action plan.

The decision to defer $200 million of funding from the CCS program, and return $24 million to budget, reflects the growing reality that the technology – if it ever is competitive – will not be in a position to deliver any time soon.

Rudd said that it was clear that nominated CCS projects would not be ready “on time” to meet the funding profiles. He insisted that the coal industry has a “real future”, although it was entirely clear if he was talking about thermal coal for power stations or metallurgical coal used for steel. He was in Queensland, near the heart of the Bowen coal basin, at the time. “We have to be sensible about how long they (CCS projects) will come on stream,” he said.

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  1. Damien 7 years ago

    Giles, we now have a more popular Government advocating an ETS, with the CEFC, ARENA and the CCA. This is good!. We can’t commend the introduction of the CCA and then argue that the Government should move before they update our reduction targets. The timing isn’t perfect, but let it be independent. The funding changes while disappointing in some areas, help Labor retake the middle ground, assisting a Government stay in power which supports climate action. This same pragmatism was missing in 2010. Now four years later we have an ETS, with a $10B CEFC and the start away from FBT’s for cars. We should be optimistic. Rudd could have caved in again on climate action to appease certain voters, but he hasn’t, and in the process has moved the LNP into the camp of the Tea Party.

    • wideEyedPupil 7 years ago

      Yeah because the people of Australia are entitled to action on climate change (the greatest moral, social, economic,…blah blah) without it actually impacting on them in any way. It’s pathetic for people to call out for action on CC and then think anything short of a radical departure from business as usual will have any useful effect. But in Canberra it all boils down to talking points and polls. So we end up with Rudd squibbing on meaningful action. Will he be reversing the over-compensation in tax-cuts for the less well of as well?

  2. Keith 7 years ago

    Why does virtually all analysis of this accept that the price under the ETS will stay around $6? The Europeans know they have to increase the price to make the ETS effective and, while there are various roadblocks, it is pretty clear they intend to do so. It will be ironic if the price under the ETS ends up substantially above the tax.

    • Ronald Brakels 7 years ago

      It has been demonstrated that cutting emissions is cheap so a $6 to $9 a tonne carbon price is all that is required to meet the inadequate 5% target for emission reductions for 2020. Given the danger global warming presents the world and particularly Australia, we should be raising the target for emission cuts rather than cutting the carbon price.

  3. Michel Syna Rahme 7 years ago

    Maybe I’m missing something but I fail to understand why the word ‘populist’ is so oftenly used in debate. Is it really such a strong word and argument? It’s like food – it is essential!

    5 positives from Labor’s decision to bring forward the ETS:

    1. The people get to witness first hand how bipolar the media and journalists in Australia have become, and how unrealistic, fragmented and partisan the green lobby is acting on our behalf. Hopefully the disenfranchised public will demand more from our environmental leaders, including a unified front!

    2. The majority of ordinary Australians who do not have much interest in the details of carbon pricing will be less influenced by seedy Coalition propaganda around the Carbon ‘Tax’ therefore reducing the Coalitions chances of winning.

    3. Green voters such as people like you and me, should all realise that it’s basically impossible for the Australian Green Party to secure more than 50% of the vote at the next election to become the governing party. Hopefully this realisation will bring Green voters and leaders back down to Earth to find a way to work with the actual power we do have, in a progressive, positive and pragmatic way.

    4. Abbott now has much less chance of becoming the Prime Minister of this land and winning with a landslide and taking over the senate which we are all aware would be a catastrophe.

    5. The Greens will likely have one more chance to redeem themselves and their past mistakes from 08/09 and have one last chance to work with Kevin and the Labour Party in establishing an ETS, with the condition that the target be decided, revised, reviewed and recommended by an independent authority every few years in return for their support to Labor.

    • BroSheffieldBrotherton 7 years ago

      I would have thought that these words “bring Green voters and leaders back down to Earth to find a way to work with the actual power we do have, in a progressive, positive and pragmatic way” is an excellent description of the process led by Christine Milne and well-supported by the Independents that led to Clean Energy package that is clearly superior to the CPRS. Can you kindly point out Michel any measure by which this is not the case.
      References to “redeem themselves”, “past mistakes” etc appear to relate to sheer politicking and “Kevin” spruiking. Many would love to work seriously with “Kevin” to truly optimise action on “the greatest moral issue of our times” but he now seems to view it as one of the great wedging issues of our times.
      Julia Gillard deserves praise for negotiating with the Greens and Independents to produce a much better package than the CPRS, even if it is much less than what we really need. On the other hand, Rudd absolutely refused to negotiate with the supposedly mistake-prone Greens in 08/09, choosing instead to negotiate with Turnbull to water down the CPRS. Well that worked a treat all round didn’t it?
      Really makes me wonder though whether “we” are actually the Greens and not the ALP in green livery. If “we” are, I confess to some embarrassment 🙂

      • Michel Syna Rahme 7 years ago

        I think the point is, whatever the Greens and Julia had come up with, irrespective of how much more effective either policy is over the other, is that it failed to resonate with the majority, and therefore if Rudd had not returned, the chances of Abbott winning were even greater, or as journalists have described it, including those in this website, as a ‘sure thing’! Therefore Abbott would have repealed and reversed the lot! Therefore the Greens made a mistake! A failed policy! The word ‘tax’ was a mistake, ink back to the environment of the time, including the tea party movement in US gathering steam before its inevitable demise. To think as a Green, that we will change Australia without or way ahead of the majority, is a dream and not pragmatic but counterproductive. You want an example – look back at the footage of Abbott and the liberals attacking Rudd from one side and The Greens from the other for totally different reasons – to the average Australian, disengaged and disinteresed in politics, they would not have rationalised the difference in both their arguments but probably instead have concluded that there was nowhere in the middle to find resolution, which led to, with the assistance of the fossil fuel lobby dollars, for the policy to be dropped and then to oust him. I just believe that the best way to go forward from here is for the Greens to support a move to an ETS, with Green support for the Labor Party be on condition that the target be decided, revised, reviewed and recommended by an independent authority every few years in return for their support to Labor. (we all know the majority will eventually wake up to the Science and give a mandate for the target to be tightened so lets work towards making that happen).

        An ETS or the CPRS is not the silver bullet, but it’s definitely a strong market based foundation to build upon. Nor is the price at $6 set there nor likely to stay there.

        • Michel Syna Rahme 7 years ago

          REPEALED AND REVERSED THE LOT WITH A SENATE MAJORITY!!!!!!! So it was a failed policy!!!!!!!

          • BroSheffieldBrotherton 7 years ago


        • BroSheffieldBrotherton 7 years ago

          Well the argument has become beyond circular and repetitious already. I have said enough about what I think and believe, and will leave it to others to issue instruction on how “to think as a Green” and tell us what “we all know”, given that I appear to guilty of poor thinking and have an inadequate knowledge base.

          • Michel Syna Rahme 7 years ago

            You have your opinion, I have mine…. Don’t beat yourself up because of it….. You are entitled to your opinion, but that doesn’t mean I have to agree….. I simply disagree. Have a good day!

          • BroSheffieldBrotherton 7 years ago

            Indeed. As the old saying goes: we are entitled to our own opinions but not our own facts…..

          • wideEyedPupil 7 years ago

            For someone who doesn’t even understand the meaning of the word popularist and why it’s often used in a pejorative way against politicians like Howard and Rudd you’re pretty dismissive of criticism, Michel.

          • Michel Rahme 7 years ago

            I did check the definition, but perhaps you could better explain?

            I eagerly await your input to help me understand better what the word ‘popularist’ means exactly in that context, and why it is used within such an argument.

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