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climate change and overseas development aid

Senator LUDLAM-I put a couple of questions to the Department of Climate Change and Energy Efficiency late last week around fast start funding in Australian overseas development assistance. It seems to be an open question at the moment as to whether Australian contributions to international funding for climate  mitigation and adaptation initiatives will be on top of our aid budget or whether they will be eating into our 0.5 per cent target. The department referred me to AusAID, so I am hoping you can help me out.

Mr P Baxter-On the government's contribution to the fast start package that will be taken from within ODA. That is the same approach that has been by all of the major donors-UK, EU, US and others. For the period beyond 2012 when the fast start package has run its course, as you know there is an international
negotiation underway which will determine how the needs of developing countries to adapt and mitigate the effects of climate change are funded. But it is clear that there will need to be mechanisms beyond the finance provided by government.

Senator LUDLAM-That is certainly clear but it gives rise to the sense that our limited foreign aid budget-I know you folks have to think very carefully about where you spend the money, even though there was an increase in the last budget-will be eaten into by climate adaptation and mitigation funds. How are you
going to balance that?

Mr Baxter-As you know, we are in the very good position of having an expanding aid budget. So the money that the government has allocated to climate change initiatives is new money that is coming into the aid budget as a result of the commitment to increase the aid budget by 0.5 GNI by 2015-16. So we are not diverting money from existing programs into climate change areas; we are actually allocating new money that is coming on-stream through the increases in the annual budget.

Senator LUDLAM-Are they being accounted for separately? Will we be able in future budgets to split out what our overseas development assistance is and what components are related to climate change, to fast start funding?

Mr Baxter-We certainly publish all of the activities that we fund in the area of climate change, so it is readily available.

Senator LUDLAM-According to a rough break up of Australia's contribution under the Copenhagen Accord, our climate change budget should have increased by around $100 million. How far did we get in the last budget? How close to that target did we get?

Mr Baxter-In the last budget there was a little over $350 million worth of new initiatives announced: $56 million to extend funding for reducing emissions from deforestation and forest degradation in developing countries, which brings our total international forest carbon initiative to $273 million from 2007-08 to 2012-
13; $178.2 million in additional funding for Australia's International Climate Change Adaptation Initiative, which takes the initiative to a total of $328.2 million over five years from 2008-09 to 2012-13; $101.2 million in further contributions to effective multilateral climate change finance mechanisms such as the World Bank administered climate investment funds; and $15 million to support climate change partnerships with key developing countries.

Senator LUDLAM-Thank you.

Mr Baxter-I should just add that that funding commences in 2011-12 and goes through to the end of 2012-13.

Senator LUDLAM-So it is correct to say that there was actually no new money committed in this current budget that we are considering?

Mr Baxter-There is money that is coming on-stream from previous budget measures.

Senator LUDLAM-That is the same as saying there is no new money.

Mr Baxter-The new money had already been programmed in from measures that were adopted in previous budgets from the government.

Senator LUDLAM-Regarding our contributions to the Copenhagen Accord, what is actually in this current budget to reflect commitments that we made? Maybe a simpleminded reading of what you just told us is that there is actually no reflection at all?

Mr Davies-The specific commitment that the government made in Copenhagen related to REDD financing-reducing emissions from deforestation and forest degradation. The Prime Minister announced a commitment over the fast start period of approximately AU$130 million. One of the measures that Mr Baxter referred to in the 2010-11 budget provides an additional $56 million for the forest carbon initiative that we already have in order to fulfil that commitment. That initiative has now increased in size to $273 million over a six-year period, which will enable us to fully fund that commitment for the fast start period from 2010 to 2012. That was the specific commitment that the government made. More generally the Prime Minister repeated the government's commitment to meet its fair share of an amount approaching $30 billion over the period from 2010 to 2012. The four budget measures that Mr Baxter referred to are a part of doing that.

Senator LUDLAM-But essentially from next year. Can I just confirm that the Australian government has not yet committed to keeping the post 2012 funding separate from our Millennium Development Goals commitments?

Mr P Baxter-I think the correct way to characterise the situation is that we are participating in the international negotiations under the UNFCCC framework and we recognise that there will have to be new and additional funding provided to meet the needs of developing countries. How that is actually apportioned between ODA and non-ODA is a matter that is still being negotiated.

Senator LUDLAM-Thanks very much. I have some more program-specific stuff for later.



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