Australian Government, 2009‑10 Budget
Budget

Part 2: Expense Measures

Climate Change

Australian Carbon Trust — establishment

Expense ($m)
2008‑09 2009‑10 2010‑11 2011‑12 2012‑13
Department of Climate Change - 28.8 37.5 6.9 1.8

The Government will provide $75.8 million over five years (including $0.8 million in 2013‑14) to support the establishment of the Australian Carbon Trust, comprising the Energy Efficiency Trust and the Energy Efficiency Savings Pledge Fund. The Australian Carbon Trust will be established with a corporation as a trustee.

Seed funding of $50.0 million over two years will be provided for the Energy Efficiency Trust to promote private sector engagement in energy efficiency activities. The Energy Efficiency Trust will fund improvements such as more efficient lighting, ventilation, heating and air conditioning, and computer systems, which can be showcased with a view to mainstreaming this activity across the private sector. Upfront investment will be repaid when energy cost savings are realised, creating a revolving fund for further investment.

Funding of $25.8 million over five years (including $2.0 million as a contribution to the Australian Carbon Trust) will be provided to the Department of Climate Change for the Energy Efficiency Savings Pledge Fund initiative. The Australian Carbon Trust will administer this mechanism for households and small businesses to contribute voluntarily to reductions in Australia's greenhouse gas emissions in the context of the Carbon Pollution Reduction Scheme. Households and small businesses will be able to calculate the potential dollar savings from their energy efficiency actions and make tax deductible donations to the Energy Efficiency Savings Pledge Fund. The Australian Carbon Trust will use these donations to purchase and retire Australian emissions units or purchase carbon offsets.

The Energy Efficiency Savings Pledge Fund initiative includes funding for the development of a web‑based calculator to estimate savings resulting from energy efficiency activities, and for a public awareness campaign to increase community awareness of the role of voluntary action in the Government's climate change mitigation strategy.

Further information can be found in the press release of 4 May 2009 issued by the Prime Minister, the Treasurer and the Minister for Climate Change and Water.

Australian Climate Change Science Program — continuation of funding

Expense ($m)
2008‑09 2009‑10 2010‑11 2011‑12 2012‑13
Department of Climate Change - - - - -

The Government will provide $31.2 million over four years from 2009‑10 to continue support for Australia's climate change research effort. This funding will be directed towards investment in Australia's climate modelling capability, building the understanding of key drivers of Australia's climate, and improving Australian climate projections. The funding is in addition to that provided for existing climate change research activities undertaken by the CSIRO, Bureau of Meteorology, universities and other agencies, and funding provided by the Australian Research Council.

Provision for this funding has already been included in the forward estimates.

Carbon Pollution Reduction Scheme — Climate Change Action Fund — additional funding and rephasing

Expense ($m)
2008‑09 2009‑10 2010‑11 2011‑12 2012‑13
Department of the Environment, Water, Heritage and the Arts 1.5 - - - -
Department of Climate Change 1.0 -100.0 -400.0 - 100.0
Total 2.5 -100.0 -400.0 - 100.0

The Government will provide an additional $300.0 million over two years from 2013‑14 to the Climate Change Action Fund under the Carbon Pollution Reduction Scheme. This will provide additional support for businesses, community sector organisations, workers, regions and communities to smooth the transition to a carbon constrained economy.

In addition, the Government will defer funding of $100.0 million from 2009‑10 and $400.0 million from 2010‑11 to 2012‑13 and subsequent years, in recognition of the delay to the start date of the Carbon Pollution Reduction Scheme.

The remaining funding, previously incorporated in the budget estimates at the February 2009 Updated Economic and Fiscal Outlook, of up to $200.0 million in 2009‑10 will support businesses and community organisations that have significant energy costs, but do not receive emissions‑intensive trade‑exposed assistance, to take action to reduce carbon pollution through energy efficiency before the scheme commences. This funding will include:

  • $20.0 million for a business information package to provide advice to businesses on how the scheme will work and the impacts and opportunities that may arise;
  • up to $100.0 million for Early Action Energy Efficiency Strategies for Business, including energy audits and capital investment; and
  • $80.0 million for capital investment grants for businesses and community organisations.

The funding in 2009‑10 will be provided to the Department of Climate Change, with some funding to subsequently be allocated between the Department of the Environment, Water, Heritage and the Arts, the Department of Innovation, Industry, Science and Research, and the Department of Resources, Energy and Tourism, after program governance and delivery arrangements have been settled.

A provision for the measure in 2010‑11 and subsequent years has been made in the Contingency Reserve.

Funding of $2.5 million in 2008‑09 will support program design activities in the Department of Climate Change and the Department of the Environment, Water, Heritage and the Arts.

Further information can be found in the press release of 4 May 2009 issued by the Prime Minister, the Treasurer and the Minister for Climate Change and Water.

See also the related revenue measure titled Carbon Pollution Reduction Scheme — revised implementation in the Climate Change portfolio.

Carbon Pollution Reduction Scheme — Global Recession Buffer

Expense ($m)
2008‑09 2009‑10 2010‑11 2011‑12 2012‑13
Department of Climate Change - - - 70.0 210.0

The Government will establish a Global Recession Buffer to provide additional assistance to emissions‑intensive trade‑exposed (EITE) industries at an estimated cost of $1.1 billion over five years from 2011‑12 (including $235.0 million in 2013‑14, $260.0 million in 2014‑15 and $290.0 million in 2015‑16). The buffer will operate for the first five years of the Carbon Pollution Reduction Scheme and provide:

  • an additional 5 per cent of free Australian Emissions Units for EITE activities eligible for 90 per cent assistance, giving an effective rate of assistance of 94.5 per cent to these highly emissions‑intensive trade‑exposed activities in the first year of the scheme; and
  • an additional 10 per cent of free Australian Emissions Units for EITE activities eligible for 60 per cent assistance, giving an effective rate of assistance of 66 per cent to these moderately emissions‑intensive trade‑exposed activities in the first year of the scheme.

Rates of assistance will decline at a rate of 1.3 per cent per year, in line with the Carbon Productivity Contribution set out in the Carbon Pollution Reduction Scheme White Paper.

A provision for this measure has been made in the Contingency Reserve.

Further information can be found in the press release of 4 May 2009 issued by the Prime Minister, the Treasurer and the Minister for Climate Change and Water.

See also the related revenue measure titled Carbon Pollution Reduction Scheme — revised implementation in the Climate Change portfolio.

Carbon Pollution Reduction Scheme — National Carbon Accounting Toolbox

Expense ($m)
2008‑09 2009‑10 2010‑11 2011‑12 2012‑13
Department of Climate Change - 4.0 4.0 4.0 4.0

The Government will provide $16.1 million over four years to develop emissions estimation tools, including capacity‑building and user support systems, for the forestry and agriculture sectors. This will facilitate emissions estimation and reporting under the Carbon Pollution Reduction Scheme and help inform Government decisions in 2013 on coverage of the agriculture sector under the scheme. The emissions estimates will be consistent with the National Carbon Accounting System used for Australia's national emissions accounting and reporting.

This measure is in addition to funding provided for the National Carbon Accounting System as part of the measure titled Department of Climate Change — base departmental funding.

See also the related expense measure titled Department of Climate Change — base departmental funding.

Department of Climate Change — base departmental funding

Expense ($m)
2008‑09 2009‑10 2010‑11 2011‑12 2012‑13
Department of Climate Change - -1.7 -0.7 -0.3 4.7
Department of Climate Change - 0.2 - - -

The Government will establish base departmental funding for the Department of Climate Change at $55.5 million per annum, indexed. This will enable the department to coordinate the Government's response to climate change, including through: the detailed design and implementation of the Carbon Pollution Reduction Scheme; participation in international climate change negotiations; support for climate change science and adaptation initiatives; and the preparation of national emissions accounts, projections and reporting.

Provision for most of this funding has already been included in the forward estimates. Savings over the years 2009‑10 to 2011‑12 are due to the rationalisation of climate change programs that are not complementary to the Carbon Pollution Reduction Scheme. Departmental funding for three lapsing programs, Greenhouse Action in Regional Australia, National Climate Change Adaptation and Greenhouse Challenge Plus — Industry Partnerships, will be reallocated to other priority activities under this measure. The Strategic Review of Australian Government Climate Change Programs recommended these programs be terminated as they are not complementary to the scheme.

Greenhouse Action in Regional Australia — termination

Expense ($m)
2008‑09 2009‑10 2010‑11 2011‑12 2012‑13
Department of Climate Change - -3.9 -3.9 -3.9 -3.9

The Government will terminate the lapsing Greenhouse Action in Regional Australia program on 30 June 2009. The program aimed to build the capacity of the agriculture and land management sectors to reduce greenhouse gas emissions. The Strategic Review of Australian Government Climate Change Programs recommended that the program be terminated as it is not complementary to the Carbon Pollution Reduction Scheme and has been partly superseded by other climate change adaptation measures.

This measure will provide savings of $15.4 million over four years.

International negotiations on climate change — continuation of funding

Expense ($m)
2008‑09 2009‑10 2010‑11 2011‑12 2012‑13
Department of Climate Change - - - - -

The Government will provide $12.0 million over four years from 2009‑10 to support Australia's engagement in international climate change activities. This funding will be directed towards meeting Australia's financial obligations as a party to the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol to the UNFCCC, and enhancing strategic relationships and garnering support for Australia's objectives through engaging in cooperative activities with key countries.

Provision for this funding has already been included in the forward estimates.

This measure is in addition to funding provided to support international climate change functions as part of the measure titled Department of Climate Change — base departmental funding.

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