Despite a significant number of diplomatic visits and financial pledges, Australia's "step-up" in the Pacific last year was all but overshadowed by its lack of action on the single biggest threat facing the region: climate change.

Key points: Australia's ministerial visits to the Pacific have significantly increased in recent years

Australia's ministerial visits to the Pacific have significantly increased in recent years A new $2 billion Australian infrastructure financing initiative is now "operational"

A new $2 billion Australian infrastructure financing initiative is now "operational" But Australia has not addressed several of the Pacific's environment-related demands

After flatly rejecting calls from Pacific countries to stop using Kyoto "carryover credits" to meet emissions reduction targets last August, Australia later rubbed salt in the wound by watering down the language on climate change in the Pacific Islands Forum (PIF) communique.

That was not a particularly popular move, given the level of emotion on show at the summit on the issue: Tonga's late prime minister Akilisi Pōhiva had earlier been reduced to tears in front of his fellow leaders following a presentation from climate activists.

With the outpouring of disappointment and frustration that Australia's stonewalling brought on from Pacific leaders, you could be excused for thinking the so-called "step-up" was destined for the dustbin of history.

But Pacific observers say Australia's new foreign policy direction is, in fact, making inroads — although questions have been raised about just how sustainable Canberra's commitment to the policy will prove in the long run.

So what is the 'step-up'?

The Pacific Step-Up is one of Australia's "highest foreign policy priorities", according to the Department of Foreign Affairs (DFAT).

It was first announced as a "step change" back in 2016 by then-prime minister Malcolm Turnbull and was included in the Foreign Policy White Paper in the following year.

It got a significant boost in November 2018 when Prime Minister Scott Morrison announced that Australia would take its engagement with the Pacific to a new level and start "a new chapter in relations with our Pacific family".

"My Government … is returning the Pacific to where it should be: front and centre of Australia's strategic outlook, our foreign policy, our personal connections, including at the highest levels of government," Mr Morrison said in a speech to soldiers at Townsville's Lavarack Barracks at the time.

"This is our patch. This is our part of the world. This is where we have special responsibilities. We always have, we always will."

But despite the heartfelt language, many analysts have viewed Canberra's strategic pivot to the Pacific as a response to Beijing's growing influence in the region and not a policy shift motivated purely by altruism.

How exactly did Australia step up?

Scott Morrison met with Solomon Islands prime minister Manasseh Sogavare in June 2019. ( AAP: Darren England )

Last year, Mr Morrison famously said that to step up in the Pacific, Australia had to "show up" — and on that level, Canberra has certainly delivered.

There has been a dramatic increase in the number of diplomatic visits between Australian and Pacific leaders this year, along with increased foreign aid and the establishment of a $2-billion infrastructure financing initiative.

After winning re-election last May, Mr Morrison travelled to the Solomon Islands for a lightning-quick visit designed to send a clear signal to the Pacific.

It marked the first visit of an Australian prime minister since Kevin Rudd's trip in 2008 and came while the Solomon Islands was embroiled in a domestic debate over its diplomatic ties to Taiwan.

Just months after Mr Morrison's trip, the Solomons ended its 36-year relationship with Taipei to establish diplomatic ties with Beijing and soon joined China's trillion-dollar Belt and Road Infrastructure project.

During the visit, Australia pledged $250 million to finance infrastructure projects over 10 years, and $3 million in loans to temporary workers from the Solomon Islands who want to come to Australia under labour mobility schemes.

However, the money would be sourced from existing aid budget funds, redirected from programs that focused on education, health and governance.

But Mr Morrison's Solomon Islands sojourn was just one of many face-to-face meetings in 2019: he also visited Fiji, Vanuatu and Tuvalu, while leaders from Papua New Guinea, Samoa, Fiji, Solomon Islands and Cook Islands all made visits to Australia.

By that measure, Australia had stepped up after averaging about two ministerial visits to the Pacific between December 2017 and June 2019, based on calculations by Tess Newton Cain of the Griffith Asia Institute.

But in her recent report on the Pacific, Dr Newton Cain said this did not necessarily mean progress was being made on a policy level.

"The extent to which this increased quantity translates to quality of engagement and of relationships between Australia and Pacific states remains open to question," she wrote.

"As one seasoned Canberra observer pointed out to me, 'increasing the number of public servants working on an issue is no guarantee of improved public policy'."

New embassies, work opportunities

The Government expanded the Pacific Labour Scheme to more countries. ( Supplied: Growcom )

Alexandre Dayant, a research fellow at the Lowy Institute, said the Government also stepped up with many new announcements last year, including expansion of the Pacific Labour Scheme.

That program allows people from Pacific countries to work in low and semi-skilled jobs in rural and regional Australia for up to three years.

Other significant components of the Pacific Step-Up include the Coral Sea internet cable, which will provide fast internet to Solomon Islands and Papua New Guinea, and a trilateral regional infrastructure scheme between Australia, the US and Japan seen to rival China's Belt and Road Initiative.

On the diplomatic front, Foreign Minister Marise Payne last month announced a new Australian Embassy in Palau and an Australian High Commission in Cook Islands, with more diplomatic missions to open in Niue, French Polynesia and the Republic of the Marshall Islands from this year.

"I believe what I saw in 2019 was a step-up, because there were many announcements … but for 2020, I think that's another question," Mr Dayant said.

"There is definitely a degree of scepticism … as to whether Australia can sustain this level of policy focus on the Pacific."

Mr Dayant said there now needed to be an implementation of what had been already been announced, such as the $2 billion Infrastructure Financing Facility for the Pacific (AIFFP), and a multi-national partnership to provide power to 70 per cent of PNG's population by 2030.

He said progress on the electrification partnership had been "very limited" due to a lack of funding, a complicated government and regulatory regime, and the difficulty of delivering services on the ground across the country.

So why are we 'not winning any points'?

Australia watered down the language on climate change in the Pacific Islands Forum (PIF) communique. ( Twitter: Pacific Islands Forum )

Australia has also stepped up in terms of the aid money it had committed to the Pacific.

The Government has promised the region $1.4 billion in foreign aid for 2019-20, giving it the largest share of the aid budget in recent years.

This was also an increase from the $1.3 billion allocated from 2018-19, and the $1.1 billion in 2017-18.

"Australia is already doing much more than any other countries in the world in the Pacific," Mr Dayant said.

"When you look at the aid that Australia gives to the Pacific, it represents 45 per cent of all the aid given by any other countries in the region."

In the days before PIF, Mr Morrison also offered $500 million over five years, starting in 2020, to help Pacific nations invest in renewable energy and "climate and disaster resilience" — however that money will be re-directed from existing aid programs.

At the time, Tuvalu's former prime minister Enele Sopoaga said he respected Australia's financial support but pressed the case for stronger action to reduce emissions.

"No matter how much money you put on the table, it doesn't give you the excuse to not do the right thing," he said.

"Cutting down your emissions, including not opening your coal mines, that is the thing we want to see."

But Mr Dayant said it was very unlikely that Australia — at least not under the current government — was going to change its coal policy.

In fact, Canberra just greenlighted the divisive Adani coal mine last June after nearly nine years of planning and fierce protests and political debate.

Experts say it is very unlikely that Australia will change its coal policy anytime soon. ( ABC News: Nick Haggarty )

Graeme Smith, a research fellow at the Australian National University's College of Asia and the Pacific, said while Australia "stepped up in the monetary sense", its lack of commitment on climate change undid its good will.

"When it comes to international climate change negotiations, we play a spoiler role and it's very hard for Pacific nations to get past that, regardless of how much we dedicate to the Pacific," he told the ABC.

"Any goodwill that extra money from Australia's aid budget buys is dissipated when they see Australia trying to water down global commitment to action on climate change," he said.

"So we are stepping up in the narrow sense of yes, we are putting more money into it, but it's just not winning us any points because we're not seen as matching it with our commitment on the international stage."

Australia is reportedly the only country in the world planning to use "carryover credits" — an overachievement of emission reduction under Australia's 2020 target during the Kyoto Protocol-era — to meet its Paris agreement targets.

Using the credits would vastly reduce what Australia needs to do to meet its promised target of 26 per cent below 2005 levels by 2030.

That amounts to a reduction of 452 million tonnes over the period — 411 million tonnes of which was proposed to be made up of credits.

The UN climate talks in Madrid ended in a partial agreement last December, and did not include a decision on whether Australia should be allowed to use the accounting loophole to meet its climate targets.

Can Australian compete with China, who 'can do it cheaper'?



More Pacific island countries are turning to China for loans. ( ABC News: Natalie Whiting )

Any discussion of Australia's Pacific Step Up would be incomplete without mentioning the China factor.

There is concern that China could be saddling vulnerable Pacific island nations with unstainable debt, with Tonga's Chinese debt being held up by some critics as a prime example of what's been called China's debt-trap diplomacy.

However, a recent analysis from the Lowy Institute, of which Mr Dayant was a co-author, found that China had not been the primary driver behind rising debt risks to justify accusations of debt-trap diplomacy — at least not yet.

The analysis benchmarked China's lending practices against other major financers in the region, including the World Bank and Asian Development Bank (ADB) "as the standard-bearers for international good practice".

It said the "sheer scale of Chinese lending and the lack of strong institutional mechanisms to protect the debt sustainability of borrowing countries poses clear risks", and said it would need to substantially restructure its approach if it wanted to remain a major player in the Pacific.

The report said there was also scope for Australia's $2 billion Infrastructure Financing Facility for the Pacific (AIFFP) — comprising $1.5 billion in loans and $500 million in grants — to provide loans without causing debt problems because it had adopted key sustainable lending rules.

Australia's $2 billion Infrastructure Financing Facility for the Pacific is now "operational". ( ABC News: Ian Cutmore )

Susan Engel, an expert in multilateral development finance and aid at the University of Wollongong, noted it was a shift from Australia's historical grant-based aid.

However, while the AIFFP was announced as "operational" in July 2019, it is yet to announce any projects it is funding in the region.

DFAT did not respond to the ABC's request to clarify whether there were any projects in the pipeline, but AusTender shows there is a tender for a Capital Infrastructure Services Panel.

Dr Engel told the ABC the AIFFP was "operational in the sense that they've got a secretariat."

"Their doors are open, they're starting to set up, they've got staff," she said.

"They will be looking for some quick wins. They'll probably try and do some co-financing projects [with other development banks]."

But in a crowded debt landscape — with China's Exim Bank, World Bank and Asian Development Bank (ADB) already operating in the Pacific region — the competitiveness of the AIFFP is questionable.

Dr Engel said the Australian facility could be attractive, but it would depend on what currency the loan was in and which contractors were employed.

"Even though theoretically the tenders will be open to anyone, there's always this sort of unofficial tying of Australian aid to Australian and New Zealand companies," she said.

But even if the loans from China weren't cheaper, Mr Dayant said those loans would be quicker and "more connected to the needs of the Pacific countries" with "no strings attached".

He said compared to Australia, Beijing didn't really look at whether the government they were lending to was a democracy or riddled with corruption.

While China's expanding footprint continues to raise concerns, Dr Smith said it did benefit the Pacific leaders in the sense that they were "getting more political bandwidth than they would have in the past".

"Their voices have always been loud, they've always been assertive, it's just that before China arrived, we didn't have that kind of push to move it from something that we should do to something we must do."