Ministerial Foreword
Tackling the challenge of climate change is one of the Australian Government's highest priorities. The Government has committed to ambitious emissions reduction targets and is implementing a comprehensive nationwide response to climate change: reducing emissions; adapting to unavoidable climate change; and helping to shape a global response. These actions will safeguard our environment, sustain our society, and support our economy for the years ahead.
The world is currently confronting a global recession, but this does not mean we can ignore the threat that climate change poses to our environment, our society and our economy. On the contrary, it is more important than ever to secure Australia's long‑term prosperity by driving investment in new technologies and creating significant job opportunities for Australians, while building a low pollution economy that protects our environment. Inaction on climate change will have greater costs and employment impacts than beginning responsible action now. We also know that Australia can make deep cuts in its carbon pollution emissions while achieving strong trend growth in incomes and employment. Action on climate change will provide certainty for new investment, which is critically needed in challenging economic conditions.
The Government is taking action to underpin Australia's future prosperity by supporting existing jobs and industries, and helping develop the jobs and industries of the future. The Government has developed a comprehensive and integrated suite of climate change policies and programs to guarantee that emissions come down, that provide incentives for action as we meet our ambitious 2020 pollution reduction targets, and which will transform our economy. This involves:
- a legislated cap on carbon pollution, through the Carbon Pollution Reduction Scheme ,which will place an explicit price on carbon;
- measures to improve energy efficiency in our homes, shops, offices and workplaces;
- measures to deploy existing low emissions technologies;
- support for the creation of new low emissions technologies and products;
- opportunities for households to engage in individual action; and
- measures to help business and community groups prepare for a low carbon future.
The Government's substantial investments in developing low carbon energy technologies, ambitious action on energy efficiency, and well‑designed, limited transitional support for our emissions intensive industries will provide the long term framework and confidence required to create the new jobs and businesses of the future.
Scientific knowledge about climate change is fundamental to protecting our environment. The Australian Government is continuing its investment in the Australian Climate Change Science Program, and developing a new Australian Climate Change Science Framework to identify future research priorities and the capabilities needed to deliver on those priorities.
In this Budget, the Government will make significant and targeted investments to prepare the economy for the introduction of a carbon price and support the transition to a low pollution future. We will play our full part in global efforts to reduce emissions, and continue support for climate change science and adaptation initiatives.
Reducing Australia's Emissions
The Government is strongly committed to reducing Australia's carbon pollution. The Carbon Pollution Reduction Scheme (CPRS) is the main driver to achieve this important environmental goal. When it commences on 1 July 2011, it will guarantee that Australia meets its expanded emissions reductions of as much as 25 per-cent of 2000 levels by 2020.
For the first time, the Government is putting a price on carbon. The sale and allocation of carbon pollution permits valued at around $4.5 billion in 2011‑12 and $13 billion in 2012‑13 will directly stimulate investment and jobs in the low‑carbon economy of the future, and the Government has committed that every cent will be used to transition Australian households and business to a low pollution future.
If we take no action, by 2020 Australia's carbon pollution will be 20 per cent higher than in 2000, not as much as 25 per cent lower, as the Government intends. The Government's targets will require a reduction in every Australian's carbon footprint of nearly one third to one half.
Clean Energy Initiative
The stationary energy sector produces approximately 50 per cent of Australia's greenhouse gas emissions, so renewable energy will have a key role in moving Australia to the clean economy of the future. The Government is expanding the Renewable Energy Target Scheme by over four times, to increase the use of renewable energy to 20 per cent of the electricity supply by 2020.
As part of the $4.5 billion Clean Energy Initiative, the Government is investing $1.5 billion in the Solar Flagships Program to make Australia a world leader in solar power generation. This program will support four solar power generation projects of capacity equal to or greater than current coal fired power stations, creating an additional 1000 megawatts of solar power generation capacity — more than three times the size of the largest solar energy project operating anywhere in the world.
The Government is also establishing Renewables Australia as part of the initiative, with an overall investment of $465 million, to support leading-edge technology research, development and demonstration projects.
Carbon capture and storage (CCS) will also play an important role in the global fight against climate change. The Government will invest $2 billion through the Clean Energy Initiative in industrial-scale CCS projects, which may include a carbon dioxide storage hub, to ensure that Australia continues to be a world leader in the development of this technology.
Energy Efficiency
Through the Nation Building - Economic Stimulus Plan, the Government is also introducing the largest single energy efficiency measure in Australia's history — the recently announced Energy Efficient Homes Program. From 2009‑10, the Government will provide new funding of almost $4 billion for the Energy Efficient Homes Program.
The Government will also provide up to $100 million in 2009‑10 for the National Energy Efficiency Initiative to develop an innovative smart-grid energy network, which will combine broadband with intelligent grid technology and smart meters in homes to enable greater energy efficiency and better integration of renewable energy sources, such as solar and wind power.
To further support emissions reductions, the Government has introduced a range of interconnected and mutually supportive measures targeted at Australian households and the business sector, including $75.8 million to establish the Australian Carbon Trust, and $64.6 million for a suite of streamlined energy efficiency programs that are efficient, effective and complementary to the CPRS. This approach will reduce the burden on business while helping drive sustainable emissions reductions; increase the efficiency of program delivery; and help Australian households and firms save money and adjust to the effects of a carbon price.
Adapting to Climate Change
The Government is committed to preparing Australia to deal with the climate change impacts that are already 'locked in' due to the greenhouse gases already in the atmosphere. It is developing a comprehensive adaptation policy to help Australia manage the serious social, economic and environmental risks from these impacts and investing in the research, tools and information needed by communities, industry and governments for effective adaptation planning.
Playing Our Part in the Global Effort
These initiatives will transform Australia to a low‑carbon economy. But they are also central to our contribution to global efforts to avert dangerous climate change. In this, Australia is not acting alone. This year, we are engaged in intensive negotiations under the United Nations Framework Convention on Climate Change (UNFCCC), which will conclude in Copenhagen in December 2009. Australia is working to settle a framework for global action on climate change to take effect once the first commitment period under the Kyoto Protocol expires in 2012.
Australian leadership in becoming a low carbon nation can show other countries what can be done. While Australia must act, we can only succeed in providing a safe future for our children if the whole world acts together to reduce carbon pollution. To maximise Australia's contribution to an ambitious outcome in international negotiations at Copenhagen this December the Government has announced that Australia will cut carbon pollution to 25 per cent below 2000 levels by 2020 if the world agrees to an ambitious global deal to stabilise levels of greenhouse gases in the atmosphere at 450 parts per million of carbon dioxide-equivalent (ppm CO2e) or lower.
The Government's efforts will be supported through additional funding for the Shaping an International Solution to Climate Change measure, which will help build Australia's standing in the UNFCCC negotiations, for example through supporting developing country participation in the negotiations. The measure also supports the building of significant partnerships on climate change, with countries such as China, South Africa, the United States, the European Union and New Zealand.
As a further contribution to the global effort, Australia has put forward a proposal on how emissions reductions from the forest sector in developing countries could be included in a future international climate change agreement. Deforestation accounts for approximately 18 per cent of global greenhouse gas emissions. The Government's ongoing investment of $197.2 million for the International Forest Carbon Initiative is a core part of our contribution to building capacity in our region in this area.
Only measured sensible actions that begin now to lower our carbon pollution will guarantee Australia's future prosperity and create the high-value jobs of the future. The Government remains committed to reducing Australia's greenhouse gas emissions in an economically responsible manner, creating a prosperous low carbon economy in which Australia's environment is protected and Australian society continues to flourish.
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