Climate spending under Australia’s federal budget shrinks: IEEFA Australia

It will drop to $1.3b in 2025-26 from $2b in 2021-22 and 2022-23.

Australia’s budget earmarked for climate-related measures is set to decline over the next four years, whilst spending on high-emitting energy projects will increase, the Institute for Energy Economics and Financial Analysis (IEEFA) reported.

According to the IEEFA, climate spending under the federal budget will drop to $1.9b in 2023-2024 from $2b in 2021-22 and 2022-23. This will further decline to $1.5b in 2024-2025, and $1.3b in 2025-2026.

This showed that climate spending only accounted of 0.3% of the overall spending between 2021-2022 and 2023-2024. Its share will decline to 0.2% of the spending in 2024-2025 and 2025-2026.

Johanna Bowyer, IEEFA’s electricity analyst, noted this translates to a reduction in the budget allocated to Clean Energy Finance Corporation, Australian Renewable Energy Agency, and the Clean Energy Regulator.

Whilst decreases were made in climate spending, the federal budget increased allocation for liquefied natural gas (LNG), gas, carbon capture and storage (CCS), and blue hydrogen, which all adds to emissions in Australia and the world.

“While important centres in Queensland and New South Wales are suffering flooding for the second time in a month, and it’s just over a year since the east coast of Australia was affected by extreme bushfires, the government is putting money into the very energy projects that globally have been recognised as increasing climate damaging emissions,” Bruce Robertson, LNG/gas analyst, said.

“The government proposes to heavily subsidise the production of blue hydrogen in the Pilbara and Darwin. Blue Hydrogen is produced from natural gas with Carbon Capture and Storage (CCS).”