Australia: Funding climate change with fossil fuels

Over the last week at the UN climate negotiations, I have been a little critical of Australia’s lack of ambition in combating climate change. However, in high-level forums and low-level meetings here in in Doha, the Australian government has proudly promoted just how much we are doing, especially when you consider the type of economic growth we’re going to have to deal with.

According to governmental projections that went into designing our latest Kyoto Protocol target, our economy is set expand by about 3 per cent per year between now and 2020. On top of this, Australia’s population is expected to increase by 12 per cent.

As you can see on red line in the graph below,  Australia is expected to significantly increase our greenhouse gas emissions in the next 10 years if no action is taken.


This is where the government steps in says, “look at how much we are planning to do!” And I have to give them credit, a 22% reduction on what they like to call “Business As Usual” is pretty impressive, especially for such a developed economy.

But these increases in population and economic growth don’t come anywhere near the increase in greenhouse gas emissions the government has been projecting. Do you notice that from 2010, the purple line changes to red, and it rises quite dramatically? That’s because from 2010, the government has started projecting that Australia will massively increase its mining and gas industries. This was highlighted in the government’s recent energy White Paper which shows just how much we’re planning on increasing our fossil fuel industries over the next 20 years.


Sure, these increases are mainly going to be shipped off to the emerging economies of Asia. But it takes quite a lot of effort to dig the stuff up. And that’s what’s driving up our so called Business as Usual projections.

But as I’m sure you can now tell, this projection isn’t “Business as Usual” at all. It’s a gigantic increase in fossil fuel extraction and it amounts to significant increases not only in our own greenhouse gas emissions at home, but would have a ridiculous impact on the global greenhouse budget. As Ben Eltham recently argued:

”Once it is burnt, that carbon will be released into the atmosphere. The same atmosphere that also circulates over Australia.”

At the end of the day, what all of this means is that the fossil fuel industry is apparently here to stay in Australia. While negotiators here have exclaimed that discussions this week have been about “transitioning to a diversified, low carbon economy that is free of fossil fuels”, Australia is transitioning in the wrong direction.

What makes it worse is that everyday Aussies are funding. Australian tax payers are involuntarily some of the world’s biggest investors in a one-way climate highway to hell. According to Oil Change international, the Australian government dished out over $8 billion last year in subsidies to the Fossil Fuel industry.

$8 billion! To some of the most profitable companies in the history of money. But when it comes to giving money to some of the most vulnerable countries trying to deal with the impacts of climate change, we pledged  $204 million. Now this is a pretty good chunk of money, but you have to admit that it’s relatively measly compared to our fossil fuel subsidies.

If you want to compare this to other developed countries, Australia has the highest ratio of fossil fuel subsidies compared to climate finance. Even higher than the US.


Australia has donated generously to financing adaptation and mitigation projects over the last year, but when you compare this to our ambitious commitment to funding fossil fuels, it falls in comparison.

Here in Doha, the lack of finance for developing countries has been one of the key issues holding up negotiations. After a steady stream of funding between 2009 and 2012, developing countries fear that this stream is about to run dry. At the start of the conference, no one in the developed world was willing to put any money on the table for next year, and this has had developing countries spooked ever since.

But today, the UK announced that it will give £1.8bn over the next two years. This is a 40% increase on what they had donated over the last 3 years and the announcement was praised by all. If Australia was to do the same, and announce a 40% increase in our climate finance over the next few years, it could dramatically shape the outcome of this year’s UN climate negotiations.

Considering the steady growth trajectory the government has predicted, I don’t see why we can’t. Time to divert some money away from funding climate change and into climate finance if you ask me.


  • Marilyn Smith

    Makes lots of sense

  • Sebastien Duyck

    Good job diving into the numbers, Chris. It would be interesting to see what are the assumptions behind the quantified objectives submitted by the Europeans and whether EU, Norway and Switzerland also are cooking the books in a similar manner.
    Thanks for highlighting a concrete action that Australia could still take during the coming 48 hours to claim a leadership role in the negotiations. Let’s keep fingers crossed and hope that they will follow the path of the UK.