Australia’s first carbon budget for climate action is $30 billion as the country faces more frequent and severe natural disasters.
Analysis of the Federal Budget 2022/23. warns that the physical effects of climate change could reduce economic activity, lower taxes and put pressure on government spending.
Warmer temperatures and an increase in very hot days could shorten working hours in some industries and increase the cost of doing business.
But uncertainty around the scale and timing of the climate hit to Australia, and the pace of the global transition to net zero, means there is uncertainty about the financial impact.
The October floods alone are estimated to have reduced growth in the current quarter by about 0.25 percent and pushed up inflation in the coming months, with damage to farms and orchards and disruption of supply chains.
The builds on the Labor government’s climate laws, which introduced a tougher 2030 emissions reduction target to put Australia on a net-zero trajectory by 2050.
About $20 billion to redirect the country to renewable energy takes the lion’s share, along with $630 million for a new disaster preparedness fund.
About $1.9 billion for a regional electrification fund, $275 million to encourage the use of electric vehicles and $224 million for community batteries to support residential solar power are also on the climate books.
Controversial carbon capture and storage technologies get $135 million, while supporting energy security and reliability gets $137 million.
Rebuilding international climate leadership will cost $296 million. This includes $200 million in additional development assistance for Indonesia under the Climate and Infrastructure Partnership and $50 million in Pacific infrastructure funding.
$194 million was allocated to build the federal government’s “climate capacity,” including $102 million to rebuild the Office of Climate Change and $64 million to rebuild the Treasury Department’s climate modeling capability.
The government is also committing to new requirements for large companies and financial institutions to disclose “clear, reliable and globally comparable” information about climate risks.
Also included are projects on reefs and rivers, drought resilience and a plan to increase insurance premiums.
There is $63 million for small businesses to improve energy efficiency and $8.1 million for seaweed farming.
A new national health and climate resilience unit will be established to inform Australia’s health response to climate change.
The total cost of major climate costs is $24.917 billion by 2030, according to the first climate change analysis released with the federal budget.
In addition, funding will continue for the Clean Energy Finance Corporation, the Australian Renewable Energy Agency and the Clean Energy Regulator for new technologies and new industrial processes.
This budget introduces transparency into climate-related spending, but should not be mistaken for a blanket assessment of climate action.
“It does not take into account the impact of the investments being made and whether the measures will be sufficient to achieve the goals of reducing emissions and the economic transition,” the budget documents explain.
Critics warn the current targets will not do Australia’s fair share of limiting global warming to 1.5 degrees.
However, the $3.4 million investment in Australia’s first National Health and Climate Strategy has been warmly welcomed by Australia’s peak climate and health body, the Climate and Health Alliance (CAHA).
“This investment is a very welcome start and a big win for the health sector, which has been demanding federal leadership when it comes to climate,” said Mr. Roland Sapsford, CEO of CAHA.
“Members of the Climate and Health Alliance and other health advocates have been calling for a National Health and Climate Strategy for a very long time,” Mr Sapsford said.
“This is a real milestone for the collaborative evidence-based advocacy and work of the Climate and Health Alliance, our members and supporters.”