More than $26 billion of federal government financial incentives, grants and tax schemes provided over a single year could be harmful to Australia’s biodiversity.
That’s what a new study published in the Australiasian Journal of Environmental Management concluded after analysing the 2022–23 federal budget.
The figure was compiled by researchers concerned the Australia government was “silent” on an international deadline to identify and eliminate spending that damages nature.
Three years ago, Australia adopted the Kunming-Montreal Global Biodiversity Framework (GBF), which supports sustainable development in order to stop and reverse the loss of biodiversity, and enable the world to live in harmony with nature by 2050.
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The framework has 23 urgent targets to be reached by 2030 to address biodiversity decline, like securing 30 per cent of terrestrial and marine estate as conservation areas.
One of the targets — known as Target 18 — is to eliminate, phase out or reform annual incentives that harm biodiversity by about $700 billion globally, while ramping up programs that benefit nature.
Australia was supposed to identify these harmful incentives by 2025, according to the GBF, but no government-calculated figure has been made public to date.
Study lead author Paul Elton of the Australian National University said researchers had stepped in to come up with a tally in the absence of government reporting.
“They’ve [Australian government] made lots of commitments to do this internationally but have remained silent on this domestically,” he said.
Paul Elton has been researching federal government subsidies that could contribute to a decline in Australia’s biodiversity. (Supplied: Paul Elton)
Fossil fuel and transport incentives top harm list
Mr Elton worked with the Biodiversity Council, a scientific expert group created by 11 universities, to determine if an incentive was harmful to nature.
The study’s assessment focused on direct subsidies, like government expenditure on infrastructure, and indirect subsidies, such as tax concessions.
They followed methods recommended in the GBF to rank the harmfulness of an incentive to biodiversity as insignificant, low, medium, high or very high.
These methods were created by the Organisation for Economic Cooperation and Development (OECD), an international body with 38 member countries including Australia.
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Incentives ranked medium or higher totalled about $26.3 billion and included both one-off and recurring spending.
“That’s about 4 per cent of the federal budget,” Mr Elton said.
“Less than $1 billion is being spent a year on biodiversity.
“So we’re spending 25 times more on undermining nature than protecting and serving it.”
The majority of the incentives identified were fossil fuel related and worth a combined $14.1 billion, with one of the big chunks coming from the fuel tax credit scheme.
The second biggest category of spending was transport infrastructure — like roads, which can involve land clearing and opening access to previously untouched areas — totalling $8.5 billion.
Social scientist Megan Evans, who was not involved in the study, said the analysis had consistently followed OECD guidance on assessing the harmfulness of government incentives to nature.
She said the figure reached was likely a conservative underestimate of the true value of incentives that harmed biodiversity in Australia.
“They [study authors] also only consider federal government and not state-territory subsidies,” said Dr Evans, who specialises in environment policy at UNSW.
“The findings illustrate that the Australian government’s spending on biodiversity protection is basically the loose change found at the back of the couch.
“While its investment in biodiversity-harmful subsidies is a pile of cash with Scrooge McDuck rolling on top.”
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Australia is signed up to an international treaty for conserving biological diversity — the Convention on Biological Diversity — in 1993.
Several past international agreements to help nations meet the treaty have failed to stop biodiversity decline.
The GBF is the latest attempt at guiding change and asks nations, like Australia, to update their national environment targets to match the 23 actions it outlines, and provide five-yearly updates on progress.
A spokesperson for the Department of Climate Change, Energy, the Environment and Water said Australia’s state, territory and federal governments had considered which targets would have the greatest impact to address biodiversity decline.
“Through this process, Australia established nine priority areas for action addressing 17 [out of 23] GBF targets,” they said.
Target 18 — to eliminate, phase out or reform annual incentives that harm biodiversity — was not one of the priorities and is not mentioned in Australia’s nature strategy.
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The department spokesperson said Target 18 would be addressed, however, through one of its broad “enabler” approaches in the strategy for “mainstreaming nature into government and business decision-making”.
“[Target 18] will be reported on as part of the national progress report, in line with indicators and guidance provided in the GBF monitoring and reporting framework,” they said.
The spokesperson said the government was also providing $224.5 million to “support the recovery of our unique animals, plants and ecological communities”.
Whatever progress Australia has made against the 23 targets will be submitted in a progress report to the United Nations Environment Programme by February 28.
Mr Elton and the Biodiversity Council want to see an independent assessment, with full access to government data, in order to determine the true number of biodiversity-harmful incentives.
“The longer these subsidies stay in place, the harder it is going to be to get back on a nature-positive trajectory,” Mr Elton said.
Mr Elton said there was also the question of how much Australia should be contributing to the global target of reforming $700 billion in biodiversity-harmful spending.
The study suggested splitting up the target by share of developed nation GDP, 3.8 per cent, or by Australia’s share of biodiversity which is about 7.8 per cent.
No plans to change fuel tax credit scheme
Mr Elton said removing the fuel tax credit scheme could make it less viable to clear trees and vegetation for industries like agriculture.
Fuel is taxed in Australia to help fund things like road infrastructure, but businesses can get a rebate for vehicles that aren’t used on the roads.
The mining industry has gained the most from the scheme, receiving $50 billion out of the $112 billion claimed over the period from 2006–07 to 2023–24.
Resources Minister Madeleine King, at a doorstop in the US earlier this month, said there was no intention to change the fuel tax credit scheme.
“It’s not a subsidy for fossil fuels, no matter what some institutions might want to tell people,” she said.
“It is a scheme where companies, whether they be agricultural companies or individual tourist operators, fisheries and miners, get a rebate of the fuel excise because they don’t use those machines on public roads that the … [fuel] tax pays for.”
Mr Elton said fossil fuel incentives should be repealed and money repurposed for other government objectives like nature conservation.
“It’s worth noting Australia is one of two wealthy nations among the world’s 17 mega diverse countries,” he said.
“We have the capacity as a wealthy nation, and the ability to address this.
“We should be leading in this and not remaining silent on it.”