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Federal Minister for the Environment and Heritage
The Hon Dr David Kemp, MP

Parliament House
2.00 PM THURSDAY, 15 AUGUST 2002


Press Conference - Latest Greenhouse Accounts

I thank you all for coming along this afternoon. I’m pleased to see such a comprehensive representation of those interested in this topic here.

I want to make a number of remarks about where Australia stands at the moment, why Australia has the emissions profile that it has, and what the impact of the government’s measures have been on that emissions profile as we look forward to the first commitment period that Kyoto’s identified, and we see what in fact the national effort required of Australia will be.

The first point I want to make to you is that climate change is a very serious and important issue for Australia. Australia has in a sense a dual exposure on climate change, in the sense that many of our industries are high greenhouse gas emitters; we’re one of the world’s great resource countries; we produce alumina, aluminium, coal and steel; we are a very large agricultural country. So we have a greenhouse gas emission profile that is specific and unique to the kind of economy that we are.

So we’re high emitters of greenhouse gases, but also a significant part of our economic activity in fact depends on very vulnerable eco-systems, which could be impacted on quite significantly by global warming; our agriculture, obviously, could be affected quite substantially by climate change; our tourist industries could be affected. Insurance, infrastructure industries could all show the impact of global warming.

So, we not only emit significant greenhouse gases, but if global warming takes place, as to a certain extent is already certain because of what’s happened in the past, then Australian industries are going to be affected by that. It’s those two factors that make climate change a very important issue for this country. The first significant point therefore to make is that we can’t address climate change alone. We must have an effective global response. Australia emits about one per cent of the world’s greenhouse gases.

Unfortunately, we don’t have in place at the moment a global framework, which is going to be effective. Kyoto will deliver about a one per cent reduction in greenhouse gases. The great majority of the world’s greenhouse gas emissions are not covered by Kyoto. The United States is not a party to Kyoto and Kyoto specifically does not include the developing countries.

So, Kyoto covers about thirty per cent of the world’s greenhouse gas emissions and, implemented, it will produce about a one per cent reduction. So we clearly don’t have in place at the moment a global framework that is going to achieve what is absolutely essential, which is a very substantial reduction across this coming century in greenhouse gas emissions.

It is also the case that if we were under these circumstances to sign up to Kyoto, if we were to ratify Kyoto, this would have the potential to impose very significant costs on Australia. Ratification in particular would send a signal to potential investors that Australia is prepared to expose itself to binding legal commitments under the protocol that could in future impose costs that would not be faced by developing countries, because there is no pathway under Kyoto at present for the future involvement of developing countries.

So, if Australia were to sign up, we would be giving a message to the world and to future investors and, indeed, to companies already in Australia, that we’re prepared to accept binding legal commitments that could impose quite heavy costs on Australia, which would not be imposed on other countries, competitor countries of Australia.

So, ratification risks driving Australian industries overseas and it’s worth making the point that although the industries that I’ve mentioned, the great resource-based industries, are significant greenhouse gas emitters, these industries, on the whole, are conducted in a way which is much more greenhouse efficient than the same industries in other countries. And driving industries offshore is only going to risk adding to the total global greenhouse gas emissions.

It’s also worth pointing out when we talk about Australia being a greenhouse gas intensive economy that our economy does have a unique profile. We don’t have the hydro power resources of countries like Canada or the United States or Norway. We’re a country that has rejected nuclear power, a significant power source in Europe and Japan. And our emissions, in fact in many ways when you look at it, have the effect of reducing total global emissions. In other words, we produce the greenhouse gases through our industries that other countries are saved from producing.

One very significant and important illustration of this is the recent contract that we signed with China for LNG, because the production of the LNG under that contract is going to add to Australia’s greenhouse gas emissions by one point five million tonnes of carbon dioxide equivalent a year. But if China were to produce the same power with coal, we would see an additional seven million tonnes of carbon dioxide a year coming out of China. So what Australia is doing by providing LNG to China is in fact reducing China’s greenhouse gas emissions by seven million tonnes of carbon dioxide equivalent.

So, Australian industry is making a contribution and in instances like this, and there would be other parallel instances, a significant contribution to reducing total global greenhouse gas emissions.

Australia has invested very heavily to meet our Kyoto target. Although we do not see it as being in Australia’s national interest to sign up to Kyoto for the reasons that I’ve given, we nevertheless seek to be a good international citizen and we’ve invested, and are investing, around a billion dollars in a range of measures to reduce Australia’s greenhouse gas emissions. And we intend to invest further over the years ahead to achieve further reductions in Australia’s greenhouse gas emissions.

Our intention is to reach our Kyoto target of 108 per cent, to invest to reach that target. And today I’m releasing information that shows Australia is on track to do that. The information that has been circulated to you shows that the measures that we have already put in place have put Australia on track to achieve the 108 per cent over 1990 emissions.

I want to emphasise, because of some comments that I’ve heard in the media today, that these figures that the government is releasing are based on the Kyoto definitions. These are the result of world leading scientific research, and the methodology, which has led to the production of these figures, is internationally verified methodology. These are not figures that the government has just plucked out of the air. These are figures based on sound science and internationally verified methodology, and they are figures which derive from the framework decided under Kyoto at both the Kyoto conference and Marrakesh.

The first thing that these figures show is that the Australian Government’s greenhouse gas abatement measures, the measures resulting from the one billion dollars that we’ve invested, are already delivering. They’re highly effective measures. These existing measures are estimated to produce a reduction in greenhouse gas emissions by the 2008-2012 period of some sixty million tonnes of carbon dioxide equivalent per annum. And that is making a contribution of some 11 per cent to the reduction of Australia’s greenhouse gas emissions and towards meeting our Kyoto target. So any suggestion that the government has not been taking action, let alone effective action, is absolutely false and is given lie to by these figures.

The reduction by some sixty million tonnes by 2010 is equivalent to taking every passenger car in Australia off the road. That gives some measure of the scale of the reduction that the government’s measures, under the Australian Greenhouse Office programs and other environmental programs, have produced.

On top of this, the National Carbon Accounting System measurements on land use change in Australia show that we are reducing Australia’s emissions from 122 per cent of 1990 emissions to 111 per cent by 2008-2012. Our target is a 108. The measures have already brought us to 111, which indicates that there is a gap of some 3 per cent that we will need to make up between now and 2010. What that means is that Australia is in a very strong position to meet the target that we set ourselves.

I think we need to recognise the fact that in meeting this target over this first period, we’ve benefited by the fact that there has also been a significant reduction in land use change since the 1990 baseline period. And achieving this additional 3 per cent is going to take the involvement of the whole Australian community.

But I would like to say at this point that I think Australian industries, the states, local governments, community groups and the thousands of Australian families who have taken action to reduce their greenhouse gas emissions deserve to be congratulated because the highly effective programs that have been put in place with the partnerships of Australian industry and Australian local government and Australian families, have put Australia on track to make a very significant contribution to reaching our greenhouse gas abatement target and to making a significant contribution to being a good international citizen.
The most important issue now facing Australia as we look ahead, is not so much the first commitment period target but it is, in the longer-term, to make sure that Australia maintains a strong, competitive, job-producing economy while lowering our total greenhouse signature.

The challenge that we have, which is going to be very much driven by new technology, is to maintain our rapid economic growth, our capacity to produce jobs and rising standards of living and decoupling this growth to an increasing extent from the production of greenhouse gases.

This is already happening and I’m now proposing to outline briefly the forward strategy that Australia is putting in place to move us beyond Kyoto, to the decades ahead when we hope to see in place the effective global response of which Australia can be a part, the global response that currently doesn’t exist.

There are four main elements to the forward strategy that the government is proposing.

The first element is that Australia will be working to achieve an effective global response. This is a sine qua non of success - we have to have an effective global response if we are going to stop the human impact on climate change and slow the process of global warming.

Clearly, to get an effective global response in place, the United States has to be a key player. An effective global response has to involve all major emitters. So there has to be in place an effective pathway for the involvement of developing countries. Australia, as you know, has already entered into a Climate Action Partnership with the United States and you’ll find in the folders before you a listing of the nineteen projects that we’ve already entered upon with the United States to push ahead particularly the technologies that will be needed to effectively reduce global warming and restrain climate change.
The Australian Government currently has ongoing discussions and, indeed, negotiations with the Japanese government on a similar partnership, a country that is in Kyoto. We’ve offered to work constructively with the European Union and I might make special mention of the fact that with the United States, we’re working with the Pacific Island States to build capacity as a basis for managing the risks of climate change to those island countries.

The second element of the national forward strategy to climate change is that Australia itself will implement measures to reduce the greenhouse signature of the Australian economy, while maintaining the strength and international competitiveness of our economy and its capacity to increase job opportunities.

The sort of measures that we’re currently working on here are measures to increase our understanding of how to introduce the hydrogen economy, the use of fuel cells. We’re looking at technologies that will enable the geological sequestration of carbon dioxide emissions and clean coal technology. The government is already funding research on these technologies through bodies such as the Cooperative Research Centre for Coal and Sustainable Development, the Cooperative Research Centre for Clean Power from Lignite and Geoscience Australia. In fact, we’ve invested over thirteen million dollars so far in research on these technologies.

Technology innovation is very much a key to achieving big gains in emissions reductions, to growing new industries and avoiding the situation where developing countries simply replicate the greenhouse intense developments of the past.

We’re working also to improve our understanding of climate system models, the role of the Southern Ocean of Antarctica and the Indian Ocean in the global climate systems. And we’re working to facilitate Australia’s resources and energy intensive sectors in their response to challenges that are posed by greenhouse.

Thirdly, we’ll be designing the domestic policy settings to reach the three per cent gap, to close that three per cent gap and to reach beyond Kyoto in close partnership with the Australian community. We want to make sure that these measures provide both flexible and cost effective means of adjusting greenhouse emissions and allow key decisions on investments to be made with confidence for the future.

I am announcing today that I’ll be meeting with industry groups on the 21st August as part of this process. It’s going to involve discussions with the states, with all levels of government and with community groups to ensure that we put in place the appropriate range of measures to close the greenhouse gap of three per cent.

In particular, we want to avoid decisions, which are going to distort investment between particular projects. As far as possible, we want mutual measures in place.

And finally, we will be implementing policies that assist us to adjust to the impact of global warming, that are already unavoidable, and this involves undertaking research on adaptation and mitigation options to improve our understanding of the likely impacts of climate change.

I want to conclude by emphasising that there is no quick fix to the issue of climate change, and all we’ve heard from the Labor Party so far is the suggestion that somehow or other, all you need to do is to sign up to Kyoto and everything will be all right.

The quick fix solution is doomed to fail. Signing up to Kyoto would be to sign up to an ineffective global framework that excludes most of the major emitters of greenhouse gases.

We need to have a proper global framework in place that includes all major emitters and we need to take measures within the Australian economy that will reposition our economy as a strong and competitive economy with a significantly lower greenhouse signature; we need to decouple economic growth from the growth in greenhouse gas emissions. This is already happening. The greenhouse gas intensity of the Australian economy is declining and will decline by some 43 per cent by 2010.

The government believes that we can protect jobs and the environment and make a significant contribution to reducing Australia’s greenhouse gas emissions. We intend to protect jobs. We intend to protect the environment and that is what our policies will do.

Thank you.

Commonwealth of Australia