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Media Release
Minister for the Environment and Heritage
Dr David Kemp

25 October 2002

Government Agrees to Differ with EBA

The Minister for the Environment and Heritage, Dr David Kemp, has welcomed Environment Business Australia's report released today but disagrees with its conclusions.

"Like the EBA, the Government agrees with 'the effects of global warming are an insidious assault on our environment, our health, our productivity and our trade options'," said Dr Kemp.

That is the why the Howard Government is so committed both domestically and in international forums to achieving real global action to reducing greenhouse gas emissions.

The Environment Business Australia report, entitled The business case for ratification of the Kyoto Protocol has acknowledged the significant steps forward that have been taken by the Federal Government and by many sectors of mainstream industry to address climate change.

The report particularly commends the formation of the Business Coalition on Climate Change and the Government/Business Climate Change Dialogue for demonstrating a commitment to meeting Australia's greenhouse gas emissions targets and to going beyond the existing Kyoto framework.

The EBA recommendation is that Australia should ratify the Kyoto Protocol for environmental, trade, health, and economic reasons; however, the Government does not believe it is in our national interest to do so at this time.

In response to the EBA reports' key recommendations:

Dr Kemp stated that the EBA does not lay out a way to solve the fundamental flaws apparent at present with the Kyoto Protocol which does not include the major greenhouse emitters, and will only contribute less than 1% to global greenhouse abatement when the world needs to reduce emissions by 50-60% by the end of this century.

"Climate change can only be addressed by a truly effective global regime that includes all major greenhouse gas emitters and the EBA report has not suggested anything to engage developing countries whose emissions will soon outstrip those of developed countries.

"It is clear that Australia has more to lose by ratifying the Protocol in its current form than it would gain by joining it.

"If Australia were to abandon our long expressed and clearly articulated requirement for a more comprehensive global response it would send a signal to investors that Australia was prepared to expose itself to binding legal commitments that could in the future impose costs not faced by neighbouring regional economies. For Australia this is not a trivial matter.

"Investment in greenhouse intensive industries such as natural gas, alumina and aluminium production, coal, paper and metals processing is of great significance to our economy. Furthermore, our processing industries are relatively energy efficient. Any greenhouse penalty not shared by our competitors could see Australia lose plants offshore, with no benefit to the global greenhouse effort. For example, the new steel making technologies being adopted in Western Australia are among the most greenhouse-friendly in the world. Any shift of this production offshore would cause significant harm to the Australian economy but undoubtedly would also increase global greenhouse emissions.

"At the same time, many of the greenhouse emissions arising in Australia help others to lower their emissions. For example, Australia's recent success in concluding an LNG deal with China will mean that although Australia will emit around 1.5 million extra tonnes of carbon dioxide annually to produce the LNG, China will emit 7 million tonnes less than if it had used coal. The global atmosphere benefits, even though Australia's emissions increase.

Australian industries are world leaders in greenhouse responses. They should not be penalised when there will not necessarily be a benefit in global emission reductions. Indeed, many of the countries that would benefit from investment leaving Australia have lower emission standards than Australia's.

It remains in Australia's interest to have an effective international response to climate change and we will continue to work in international forums and cooperate with major strategic and trade partners to address climate change.

"This government is committed to addressing climate change and addressing it in a way that ensures that Australian business remains internationally competitive.

"Already the Government's $1 billion commitment to greenhouse programs are making a major investment in the development of Australian greenhouse technologies and new environmental business opportunities.

"I want to reiterate that canvassing a wide range of views across Australian business is exactly why the Government developed its forward strategy on climate change," said Dr Kemp.

"I thank the EBA for their valuable work which will be considered in the wider context of the government business dialogue over the coming months."

Media contact:
Catherine Job (02) 6277 7640 or 0408 648 400

Commonwealth of Australia