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Address to Pew Center on Global Climate Change


Senator the Hon Robert Hill
Minister for the Environment and Heritage, Australia
17 April 2001

"Except for nuclear war or a collision with an asteroid, no force has more potential to damage our planet's web of life than global warming."
Time Magazine (9 April 2001)

Introduction

Australia, with our fragile ecosystems, sensitivity to drought and flood, and the importance of natural resources to our economy, is particularly vulnerable to the threat of climate change.

Australia is listening and responding to the message that the science is sending us, most recently through the Intergovernmental Panel on Climate Change's Third Assessment Report. We accept our responsibility to future generations. We have taken the Kyoto outcome seriously, we believe the target we were given in Kyoto was fair and we have proceeded with the task required to meet the commitments set out in the Protocol.

We have progressively instituted a comprehensive program of domestic measures and are now directing almost A$1 billion of public funds to reducing greenhouse emissions.

We have established the world's first national agency devoted specifically to tackling greenhouse. A program of voluntary cooperation with industry that now includes the majority of our major emitters is being implemented. In addition, we have legislated to increase the proportion of electricity generated through renewable energy to over 12% of total generation by 2010.

We are also:

In our experience to date, Australia has found that it is possible to develop innovative greenhouse policies that can also be used to address other pressing concerns. We are successfully integrating climate change into natural resource management, and using greenhouse to help assist with solutions on salinity and land degradation. We have linked greenhouse to our drive to promote renewable and sustainable energy.

There is still much to be done to fully implement these domestic programs. However, the lack of agreed international rules threatens to constrain the development of the next phase of our domestic response - for example, a domestic trading scheme in carbon emissions.

We expected these international rules to be developed and settled within the framework of the Kyoto Protocol. In this respect, we have always said that Australia's approach is dependent upon workable and efficient rules for the Kyoto flexibility mechanisms, sinks and compliance. Furthermore, we said we need a process leading towards developing country commitments to control their emissions. Such a process is necessary if we are not to distort the economic (and environmental) outcomes of the Protocol.

These international rules, yet to be agreed, must address issues of cost, equity and participation if we are to have an effective international agreement - whether through the Kyoto Protocol or in some other form. Accordingly, I would like to touch on each of these issues.

Cost

I am continually surprised by the need to emphasise that costs must be kept to the minimum.

If the costs are too high, it becomes a disincentive to implementation. Minimising costs, while maximising emissions limitation, is the basis for an international response that will attract broad acceptability.

Furthermore, an international response to climate change will not survive for long if some countries have a price on carbon and others do not. Under such conditions, Australia would lose competitiveness and we would see a significant shift offshore in Australian industry. In addition, the environmental effectiveness of the Protocol would be undermined as emission cuts in Australia were offset by increased emissions from these relocated industries.

We must design a system that minimises incentives for industries to migrate across borders due to carbon price differentials and ensures that a consistent set of carbon prices and abatement incentives is in place in the medium term.

Furthermore, while the costs of inaction are more difficult to calculate, we know that doing nothing is not the lowest cost response.

Rather, the lowest cost approach is to start to take measured steps early, and put the world on a longer term sustainable path.

I might add that this is not easy. A key lesson we have learnt from our several years experience in implementing measures to limit emissions is that there is a long lead time in achieving emissions reductions. We need to act early if our actions are to be environmentally effective and cost-effective.

Equity and a global response

The impact of climate change will not be equitable. The IPCC's Third Assessment Report has noted that "those with the least resources have the least capacity to adapt and are the most vulnerable".

But the unfairness in these natural impacts cannot be repeated in the measures adopted by the international community to address climate change. Our challenge is to ensure that the international response to the threat of climate change is both effective and equitable.

Under the Framework Convention on Climate Change, developed countries have agreed to take the lead in addressing climate change - but not to respond alone. That would not be fair, and nor would it solve the environmental problem that will affect all nations.

Leadership means nothing if there is no one following. Developed country emissions will be overtaken by those from developing countries this decade, and even if Annex I emissions decrease dramatically from 1990 levels, increases in the emissions of developing countries will ensure that total emissions continue to rise.

A global response is needed, both to tackle the problem and to sustain the solution. It is a sobering fact that, after many years of discussion, there is not yet any consensus on how to provide for a truly global response. This is a critical failure that must now be overcome.

A robust and durable global response requires that all countries commit themselves to take action, and that all be seen to be doing so. Only in this way can all countries be confident that our efforts will prevail.

No one, including developing countries, disputes the environmental reality that action by developing countries is needed if the international community is to address this global problem. If we are serious about developing a long term sustainable response to climate change, we should set ourselves realistic and attainable goals based on each country's capacity to deliver, and we should ensure that the burden of addressing climate change requires an equality of effort.

Participation by all

Differentiation is the basis for the recognition of individual national differences in any agreement.

Australia was a strong advocate of differentiation in the lead up to Kyoto, and we continue to view it as the means to expand the international response to include global participation.

Differentiation in the global context could see consideration of individual country's national circumstances, economic structures and development needs, and the recognition of these in the terms of their participation. Prior to Kyoto, Australia developed indicators to capture the impact of national circumstances which affect the cost of meeting emission abatement commitments. These indicators might form the basis for the consideration of global participation, or alternatively countries may bring forward others that better capture their national circumstances.

Our experience at Kyoto in agreeing targets for Annex I countries provides a basis for expansion to a global response.

Incentives to participate

I am realistic enough to understand that whilst all countries share a common incentive to see a reduction in global emissions, arising from a shared vulnerability to the threat of climate change, this does not translate into a capacity to participate. Other incentives are going to be necessary. Part of the answer might be in the Clean Development Mechanism and in other forms of technology transfer. But it is a critical issue that has been given insufficient attention.

What we need to do

As I have indicated, we accepted our target at Kyoto and have been implementing domestic programs with the objective of achieving it. That remains our primary objective and there is much for us to do in the next few years with or without a legally binding target. We intend to maintain our greenhouse reduction program and trust other parties to the Convention will do likewise.

We recognise, however, that this will not lead to optimal outcomes in terms of the level of abatement and the full utilisation of least cost options without an international agreement setting binding targets.

As we have demonstrated by our actions in international fora since late 1997, we have supported the Kyoto Protocol despite the fact it is incomplete and has shortcomings. We have sought to complete the Protocol through the negotiation of rules with an emphasis on least cost abatement options, broad coverage of sources and sinks and an encouraging rather than punitive compliance regime. We have sought to address the shortcomings on participation consistent with the principle of 'common but differentiated' responsibilities, which is reflected in the Convention. We have done so in conjunction with a number of other parties who have generally shared our views on these key issues. This remains our preferred approach.

It is our view, however, that it is not possible to have an effective Protocol without the United States of America. If the United States has therefore determined that the Protocol is unacceptable - presumably because it believes the unresolved issues in and around the Protocol cannot be resolved in a fair and effective way - then we will want to explore with the United States its views on the international architecture which can deliver an optimal global response.

Whether through the Protocol or otherwise, the issues I have canvassed in this paper will still need to be resolved and we are committed to continuing to constructively seek their resolution. In fact, settling the detail may well assist the design of the most appropriate form of instrument or instruments within which they would be incorporated. After all, it's the actions in terms of reducing global greenhouse gas concentrations which really count, not the international architecture.

In the meantime, I would like to acknowledge businesses across the world that have not waited for an international framework, but rather have accepted a responsibility and are already reforming their processes toward less carbon intensive outcomes. We believe that not only are they environmentally responsible but - like Governments which act early - they will be the economic winners in the end. Furthermore, they remind us of the need to get on with the job.

Commonwealth of Australia