Prosperity, Planet, Climate Change

Australia launches $2.5 billion climate fund

Responsible Business | Mar 04, 2019

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The Australian government has announced a AUD3.5 billion (US$2.5 billion) investment package intended to help the country meet its emissions reduction targets and adapt to climate change. The package includes a AUD2 billion ‘Climate Solutions Fund’, support for renewable energy and a new electric vehicle strategy.

Prime minister Scott Morrison’s government has been criticised by environmental experts for its continued support for coal power, and for failing to take meaningful action to reduce the country’s carbon emissions. Australia’s emissions have grown in each of the last four years, and both the UN and OECD have warned that at its current rate of action, it is unlikely to meet its Paris Agreement target of a 26 per cent reduction by 2030.

Earlier this month, the government called emergency meetings to address extreme weather that has hit the country in recent weeks, including an unprecedented heatwave, droughts in New South Wales, floods in Queensland and devastating forest fires in Tasmania.

“Tackling climate change requires practical policies. We will continue to play our part but will do so without taking a sledgehammer to our economy. It requires cool heads, not just impassioned hearts,” Morrison said on Twitter.

The plan has already attracted criticism for failing to go far enough, and for rehashing and rebadging old projects and strategies.

Much of the new financing will go into extending an existing mechanism, the Emissions Reduction Fund, which hands public money to companies and landowners in exchange for commitments to lower their carbon emissions. Under the extended Climate Solutions Fund, small businesses will be given support for energy efficiency initiatives, remote indigenous communities will be given funding to manage wildfires, and farmers will be assisted in restoring degraded land and drought-proofing their farms.

The success of the ERF, which was created by Morrison’s predecessor, Tony Abbott, has been questioned by economists and environmentalists. Critics point out that the fund’s efforts have not been backed up by stricter regulations on large emitters, and that there is little proof that the projects that the ERF supports would not have gone ahead without the availability of public funding.

Companies have accessed the fund to invest in fossil fuels. Earlier this week, the Guardian reported that mining multinational Rio Tinto had received AUD2 million from the ERF to build a diesel-powered generator at a bauxite mine.

Writing on the Conversation, senior lecturer in economics at the University of Queensland Ian MacKenzie said that “The government has put a new name on an existing scheme, while steadfastly refusing to learn from mistakes made along the way. In cruder terms, it’s slapped a gleaming coat of lipstick onto a pig of a policy.”

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