The Rudd Government addressed climate change in its first budget by allocating $2.3 billion over the next four years. At one fortieth of the $100 billion to be spent on defence, and with much of the funding directed to the worst offenders of greenhouse gas emissions, the coal industry, environmentalists remain concerned.
The Rudd Government has dedicated $500 million over eight years towards developing clean coal technologies, with only $55 million going into renewable energy next year.
Greens Party senator Christine Milne said Rudd's first budget was disappointing in regards to climate change.
"They did nothing to help climate change. It's very much business as usual."
"What we see now is the same as the Howard Government, coal is still front and centre of the right agenda," she said.
Professor Barry Brook, the Sir Hubert Wilkins Chair of Climate Change at the University of Adelaide in South Australia, said that this is probably the best budget Australia has had in terms of climate change, but the Government needs to follow up on it.
"I think that something has held them back a little bit until the funds come in from the Emissions Trading Scheme next year."
He said clean coal is one way to reduce emissions but there needed to be more of a focus on solar and geothermal power.
"In principle clean coal is one of the solutions. In practice, if it is not balanced with other initiates then I do have a problem with it."
Black coal is Australia's largest export commodity and was worth around $24.5 billion in 2005-06.
Professor Brook said although the Government had met its election pledges they should not have reduced the threshold for a rebate on solar panels.
"Most people who install roof top voltaic solar panels have a salary over the income threshold of $100,000. Immediate evidence suggests the market dropped by 70 percent."
Senator Milne said there was not enough investment planned for renewable energy in the next 12 months and the decision to means test solar rebates had effectively collapsed the solar industry in Australia.
"When the announcement came that the rebate threshold was reduced a lot of people cancelled."
Under the means test, households with an annual taxable income of $100,000 or more are not eligible to claim the $1000 solar hot water rebate. Lowering the rebate had hurt smaller businesses, which had now had to cancel their orders, she said.
"The smaller businesses are telling me that from one end of the country to the other. It really has been the most ill considered and stupid decision."
"We are now going to see the demise of the Photovoltaic solar industry, where in Germany it is going gang and buster," she said.
Senator Milne said the Government's election campaign promised that this budget would provide a changed outlook on renewable energy.
"Two times as much has been put in to so-called clean coal rather than renewable energy," she said.
CEO of the Climate Institute John Connor said the budget was "mild and promising" but many renewable energy and solar businesses had been relying on financial support for their projects and were disappointed.
"We need to ensure that we have geothermal, solar thermal and carbon capture and storage in the mix, so we can really know what ones to concentrate on as we continue to make strong reductions post 2020."
He was looking forward to the implementation of the Emissions Trading Scheme (ETA), which is currently in the consultation phase. A bill is expected to be before parliament in March next year.
"Next year's budget will be a much bigger one because we will see dividends from the trading scheme coming in."
The ETA is scheduled for introduction in 2010. Minister for Climate Change Senator Penny Wong said in a statement that it would be "the most significant economic and structural reform undertaken in Australia since the trade liberalisation of the 1980s".
Mr Connor said the scheme would affect the profits of the major players in the energy industry, but consumers are unlikely to feel any major affects to their power and petrol bills.
"The whole point of an emissions trading scheme is to put a price on pollution. That will have an effect [on energy companies' profits]. This is about shifting the Australian economy to a clean energy future."
Professor Brook however believes people on lower incomes will not be immune from the higher cost of energy from the emissions scheme and will be hit harder by increasing energy prices.
"I think that with the emissions trading scheme consumers will pay more. If you put a price on carbon where there was no price before you will pay more."
Senator Milne said she was concerned that the ETA will be implemented too slowly to reduce emissions.
Under the ETA the Government hopes to reduce Australia's greenhouse gas emissions by 60 percent of 2000 levels by 2050.
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