Budget 2007-08 - Climate change measures

By Emma Covacevich and Kate List.

Key Points:
The Budget allocated funds for measures by industry and Government.

The Federal Government has invested $741 million in climate change measures in the 2007-08 Budget. The key industry measures supporting actions by governments, industry and individual households to reduce greenhouse emission are:

• $197.2 million towards the new Global Initiative on Forests and Climate to reduce global emissions from deforestation, which accounts for 20 percent, or 6 billion tonnes, of total emission annually
• $170 million for measures to help Australia adapt to the impacts of climate change
• $150 million for the Government's popular solar rebate programme
• $59.6 million to accelerate the production of greenhouse friendly transport fuels
• $18.5 million to reduce greenhouse gas emissions from underground coal mine activities
• $18.2 million to support offshore carbon capture and storage; and
• $7.9 million to phase out inefficient light bulbs.

Key industry measures

The key industry measures supported by the Government are:

• coal mine methane reduction; and
• carbon capture and storage.

Coal mine methane reduction

The Government is providing $18.5 million, over five years, to reduce methane emissions from underground coal mines, located mainly in New South Wales and Queensland. This amount is partly funded from the existing Greenhouse Gas Abatement programme and will conclude in 2011-2012.

The funding will support the capture of methane, which will then be used to generate electricity or converted to less harmful gas. Where the methane cannot be captured, the funding will support flaring or possible use at the operating mine. Some companies are already using coal mine methane for power generation or flaring to help reduce the greenhouse impact. Those companies which are venting coal mine methane into the atmosphere are encouraged to apply for the funding.

Carbon capture and storage

The Government is providing $18.2 million, over four years, to the Department of Industry, Tourism and Resources and Geoscience Australia for carbon capture and storage. The funding will be used to implement the legislation and underpinning regulatory regime for offshore carbon capture and storage. It will provide industry with the access and property rights in Commonwealth waters they need before carbon dioxide can be stored in offshore geological structures, the release of areas for exploration, and the regulation of activities.

The Offshore Petroleum Amendment Bill, which deals with carbon capture and storage, was scheduled for the winter session of Parliament, but because of a backlog and lack of resources, it might not be tabled until after the federal election. The legislation will need to balance the rights of the existing operators of the oil and gas fields with those companies wanting to advance carbon storage efforts. The Minister for Industry, Tourism and Resource, Mr Macfarlane, has indicated that the legislation may give the existing operators' rights priority as "sovereign risk has been one of the great things for Australia in attracting oil and gas exploration".

Criticisms

The Budget has been criticised by various groups on the grounds that it offers limited support for renewable energy and that it lacks a commitment to significantly reduce greenhouse emission by 2020 or include a trading emissions scheme.

Carbon Emissions Trading Scheme

The Budget did not make provision for the introduction of a national carbon emissions trading scheme.

We have discussed the Prime Minister's Task Group on Emissions Trading report here and here.

For further information, please contact Emma Covacevich.