SA’s algal bloom and the case for a polluter-pays disaster fund
While we cannot turn back time to implement the policy retrospectively, the opportunity is still there to be seized, if only our political leaders have the courage to do so, writes The Australia Institute director Noah Schultz-Byard.
South Australia’s coastline is famed for its extraordinary biodiversity.
But now it bears the scars of a climate-fuelled algal bloom crisis.
At least 450 marine species have died, scores of coastal communities and businesses are reeling, and governments at all levels are failing to meet the severity of the moment.
So why aren’t those who are the most responsible for the disaster, and the most able to pay, being made to foot the bill?
Currently, the only funding being made available in response to the algal bloom is a combined $28 million from the State and Federal Governments.
This funding represents welcome relief for some, but it is a mere drop in the ocean compared to the scale of damage that is being done to our marine environment and the coastal communities that rely on healthy waters to survive.
It also means the taxpayer foots the bill, when it is the fossil fuel companies causing the damage – damage that is on going.
We know that climate disasters are costing us billions of dollars every year and driving up the cost of living, with projections showing the expected cost of natural disaster recovery reaching $39 billion a year by 2050.
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That dwarfs existing federal disaster readiness funds.
One potential solution to this escalating, untenable situation is to introduce a national ‘Climate Disaster Fund’, paid for by a levy on fossil fuel production in Australia.
This would help to shield every Australian community, including those of us here in South Australia, from the increasingly costly impacts of the climate chaos that we are already experiencing.
The positive news is that, like all good ideas, a Climate Disaster Fund would be both simple to implement and profound in its impact.
The Australia Institute proposed this type of levy back in 2019.
Institute research shows a levy of $30 per tonne of carbon pollution caused by coal, oil and gas production, most of which is exported, would have raised $44 billion in 2024-25.
This funding could have been helping Australian communities deal with climate related disasters, such as the current algal bloom in South Australia, for years.
And while we cannot turn back time to implement the policy retrospectively, the opportunity is still there to be seized, if only our political leaders have the courage to do so.
This policy is consistent with the fundamental economic principal that businesses should pay the costs of their externalities. Or, to put it another way: if you cause the harm, you pay for the repair.
Unfortunately, as it stands, Australians are paying the costs of climate related disasters through higher taxes, increased insurance premiums, and lost income.
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Meanwhile, largely foreign-owned fossil fuel corporations walk away with huge profits. In the last three years, Australia Institute research shows that gas exporters like Santos and Woodside made windfall profits of at least $100 billion.
It will take some time to fully appreciate the economic damage the algal bloom has done to tourism operators, oyster farmers and local fishing operations across our state.
But one thing we know for sure is that the current level of support being offered is inadequate.
Similarly, the funding required so that our scientific community can properly understand, respond to, and work to help prevent these sorts of events in the future is severely lacking.
Ironically, this crisis is unfolding just as South Australia stands on the brink of being named host of the 2026 United Nations climate conference, known as the COP.
While the timing is awkward, it also represents a significant opportunity.
If we can commit to implementing this polluter-pays reform before we host the summit next year, Australia can become a genuine global leader in this crucial area of climate policy.
Australia isn’t alone in considering how we can pay for the damage that climate change is doing.
The idea of a polluter-pays levy is gaining traction worldwide, with leaders in vulnerable Pacific nations arguing for global loss and damage funds, and the European Union introducing systems to tax carbon-intensive imports, known as Carbon Border Adjustment Mechanisms.
As one of the world’s biggest fossil fuel exporters, if Australia adopts a fair, transparent disaster levy, it could set a new global benchmark, requiring those most responsible for the climate emergency to step up and help those most exposed to its impacts.
If we don’t act, multinational fossil fuel corporations will keep pocketing massive profits, leaving Australian families and small businesses to shoulder the devastating costs of climate disaster time and again.
Noah Schultz-Byard is a Director at independent think tank The Australia Institute.
