2020 Budget: a missed opportunity to prepare the economy for climate change

Oct 13, 2020

It is clear from this week’s budget that the Federal government will continue to delay the decarbonisation of our economy and appears determined to extend the life of declining fossil fuel industries.

The Budget is a brave attempt to revive the Australian economy following the pandemic crisis. It may even succeed. But it wastes a big opportunity to prepare the economy for the larger and more serious challenge of climate change. It is clearly designed to stimulate the economy back to how it was before the pandemic with very little structural change. This will only increase climate risk and biodiversity loss and make our economy more vulnerable in years to come.

The Treasurer’s budget speech only mentions climate change once and emissions reduction twice. On the same day, the British Conservative Prime Minister, Boris Johnson announced a 10-point Build Back Greener plan in a speech “pledging to make the pandemic a catalyst for green growth”. South Korea, the EU and even Nigeria have significant green recovery plans.

The calls from Citizens Climate Lobby for a climate smart recovery and the calls of many others across society for a sustainable recovery or ‘build back better’ seem to have fallen on deaf ears.

There are clearly some positive steps in the right direction. The $1.9 billion energy plan provides some support for low emissions and renewable technologies. Support for clean energy and recycling in the Manufacturing Modernisation Fund are also very welcome.

However, the $28.3million to unlock 5 key gas basins and other supports for gas, will ensure that emission reductions coming from this budget will be cancelled out and possibly exceeded by emissions from new gas production that may last for decades. Similarly, $5 million for electric vehicles will be drowned out by $250 million for storing liquid fuels.

There is still no significant price signal to guide our economy towards safety, only contradictory signals that begrudgingly acknowledge renewables and encourage fossil fuels at the same time.

This makes the adoption of a carbon price all the more important in the years ahead. Under pressure from the rest of the world, and internally from the states, industry and civil society, Australia will have to change course soon and when it does, an efficient, elector-friendly carbon price like Carbon Fee and Dividend will prove invaluable.

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