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Transcript
Federal Minister for the Environment and Heritage
The Hon Dr David Kemp, MP
and
Federal Minister for Industry, Tourism and Resources
The Hon Ian Macfarlane, MP

Doorstop
Parliament House
Canberra
Wednesday 21 August 2002


E&OE

Subjects: Government-Business Climate Change Dialogue, Kyoto, WSSD


Dr Kemp:

Thank you very much for coming to this doorstop. The Government this morning has had its first round of discussions with Australian industry on the issue of climate change. It was a very effective and constructive discussion. One of the most pleasing aspects of the discussions this morning, is the obvious determination of Australian industry to make a positive contribution to reducing Australia's greenhouse gas emissions. This is very important, because of course the bulk of Australia's greenhouse gas emissions come from the industry sector, households contribute about 20 per cent of those emissions, so, a positive response from industry is very important to Australia reaching its target and positioning itself to make a major contribution as the decades go by.

There was a very clear message from industry this morning and that was that they want now a framework, which integrates both short-term and long-term perspectives. They are looking for a policy which gives them certainty for investment and flexibility to make decisions, which are appropriate to their particular industry sectors. And that's the reason why we've engaged industry in this Dialogue. So that we can put in place a framework that is going to position Australia very effectively to be both a strong and competitive and rapidly growing economy into the future, while also making a significant contribution to the reduction of greenhouse gases.

So this is a very positive start and we've set up five working groups to address major industry sectors. Those groups will be looking at what the effective industry responses can be, what are the cost effective responses from industry that we could put in place and they'll be reporting back in May next year. Some time before then I would think that we would probably have another plenary meeting of this kind perhaps towards the end of this year and then a further such meeting around May next year and that's when we'll get the final reporting back from the industry groups. But the industry message to sum up basically is that the Government is very much on the right track and industry welcomes the consultation and is prepared to make a realistic and strong contribution to Australia's effort to reduce greenhouse gas emissions.

Ian Macfarlane co-chaired the meeting with me and I invite Ian to make a few comments before we take questions.

Ian Macfarlane:

Thanks David and can I just add to that, that in terms of industries approach, what they are seeking more than anything is a consistency in policy both at a national and state level. They need to know that so they can make their own investment decisions. They want to share the issue of global warming costs, see it shared across the whole of the globe by their competitors as well as just Australian industry. That's important to them in terms of maintaining their international competitiveness and, in terms of working towards a reduction in greenhouse gas emissions, they see it as very important that we have an incentive and market based approach rather than a punitive approach.

Dr Kemp:

Could also say that we are joined here today by Peter Hendy from the ACCI, we are also joined here by Ron Knapp from the Aluminium Council and Brian Horwood as well from the Minerals Council. So, you may like to ask them any questions and they may like to make statements. Does anyone want to make a comment?

Ron Knapp, Executive Director, Australian Aluminium Council:

We are very pleased with the approach that the Government has taken, the establishment of a Dialogue and it is important, the critical importance is to be starting to talk about the long term. We invest for 30 and 40 years and unless you have that certainty, unless you have that confidence that you can invest in those time frames, then that investment will be somewhere else.

Journalist:

Do you think the current targets are realistic, the current greenhouse targets?

Mr Knapp:

We're talking about setting up a construction that moves us much further forward, because you're talking about targets that at this stage only go to 2012. What we're talking about is the 20 years beyond that and that's what's going to be important for growth in this country.

Journalist:

So is industry doing its bit?

Mr Knapp:

I think so and let me talk to aluminium. Our direct emissions have been reduced per tonne of capacity, per tonne of output by 45 per cent since 1990. Now there's a lot more work to be done and you can take examples like Alcoa on a worldwide basis has undertaken to reduce their direct emissions, absolute direct emissions by 25 per cent between now and 2010. So I do think business is engaged and recognising it. We are not working on an issue like Kyoto because Kyoto has been proven globally to be divisive and what we need is something that's uniting and things like the Australia/US Climate Action Partnership are the things that are going to drive technology for the future and that's where we need to go.

Journalist:

Do you think the environment will benefit from having these Kyoto targets?

Mr Knapp:

They are not Kyoto targets. The environment will benefit from the Dialogue and the operations that the Government has set in place because we're actually looking at the long term and the long term is the issue.

Journalist:

The 2012 target, do you think that's going to be of benefit to the environment?

Mr Knapp:

(Inaudible) of course, but that doesn't take us anywhere. But if you're talking about 2012 and Kyoto then it's not going to because it's not going to do anything globally. Globally it doesn't work.

Journalist:

So will industry strive to try and help the Government try and meet that target?

Mr Knapp:

Industry is already working on that because there are benefits and incentives for us to do that in terms of trying to reduce our energy use.

Journalist:

Dr Kemp, were any specific new initiatives suggested today for reducing greenhouse emissions?

Dr Kemp:

Well, industry canvassed quite a number of views about, of what they thought might help their sector, but before I go into that what I would like to do is (inaudible) ... I will give Brian Horwood a chance to make comment if you would like to, Brian and then Peter Hendy.

Mr Brian Horwood, Minerals Council of Australia:

I think that today's meeting was I think fantastic in that we have a direction going ahead for industry and Government to work together to really reduce its emissions from industry across Australia. Also, I think today's meeting gives us a chance to meet our targets and commitments without destroying Australia's industry and without letting industry transfer offshore. The minerals industry, we make investments, we want to invest but we invest for 20, 30, 40 years and we need certainty now to make those big investments in the future about Australia's position on greenhouse. So today I think was a tremendous breakthrough for us and for Government.

Journalist:

But won't reducing emissions reduce productivity?

Mr Horwood:

It will. I think the world must recognise that there will be a cost if we are to reduce greenhouse emissions; it's a case of making sure that you meet your target reductions without destroying industry. I would like to give one example of what we're tyring to do. There's technology being developed to let you burn coal in power stations and have zero emissions of greenhouse gases. So we believe within 10 years we can build coal fire power stations and have zero emissions of greenhouse gases and that would be fantastic for Australian industry, fantastic for the consumers overseas who buy coal from Australia; coal is our biggest export earner.

Journalist:

But aren't businesses under a lot of pressure to try and get the bottom line for their shareholders?

Mr Horwood:

You have to try and do both. We have to look after our shareholders, but by the same token, we have to also reduce emissions. So it's a case of doing both in parallel, without destroying either.

Mr Macfarlane:

And I think that we've underlined the importance of having a method, which involves the whole of the globe. That is all of Australia's competitors as well as our own industries involved in greenhouse gas reduction. If you don't do that then Australia loses its competitive advantage and that costs us investment here and it also costs us jobs. So what we're doing today is working with industry and we will be consulting with other groups over the months ahead to ensure that we produce a sustainable reduction in greenhouse gas that doesn't compromise Australia's standard of living, that doesn't compromise our ability to remain competitive, that doesn't compromise our ability to create jobs, but does reduce greenhouse gas globally.

Dr Kemp:

We've also got Peter Hendy here from the Australian Chamber of Commerce.

Mr Peter Hendy, Australian Chamber of Commerce and Industry:

The Government Business Climate Change Dialogue Roundtable today was a great start from the point of view of business. What Australia has to do is, it has to come up with innovative ways to maintain economic growth for Australia, while containing greenhouse gas emissions. What came up in the meeting today were a number of issues. One being that business was looking for certainty with regard to investment that they do, with respect to their emissions, but also another issue that came up was the coordination between federal and state government activities and their regulations and how they affect business. There's been concern that state government activities have been impacting on business decisions and there is, and it's very important that there's a coordination between the Federal level and the State level.

Journalist:

Mr Macfarlane, do you think the Government should be encouraging greater use of coal as an energy source rather than comparatively cleaner fuels such as LNG?

Mr Macfarlane:

Well, we're very keen to pursue the sorts of technologies that Brian outlined. In terms of zero emission coal technology, it's attainable perhaps within 10 years. That will open up huge potential for us both as a producer of low cost electricity and attracting energy intensive industries here, but also of course in terms of our exports. It's not as simple as to say we should just move to lower emission fuels now, this is about a long term strategy, this is about ensuring that we make the right decisions now so that industry can invest for 30 years. And I think that the other thing that's being overlooked in this process is that there are industries, some of which spoke today, that will actually benefit commercially from developing new technologies that reduce greenhouse gas emission, both in terms of utilising it here in Australia and exporting it all over the world.

Journalist:

In your press release you say that industry will cut emissions by 60 million tonnes, in what time and can you give some practical examples of how that will be achieved?

Dr Kemp:

Yes well that's the impact of the Governments current programs. We've invested $1 billion dollars in reducing greenhouse gas emissions already. That's funded a range of programs, to take a few examples of that one is the Greenhouse Challenge program to which 700 companies are rolled up. They've already made agreements with the Government to reduce their greenhouse gas emissions and they're very effective in doing that and that program was endorsed today at the Roundtable as a highly effective program. We've also got in place of course the Mandatory Renewable Energy Target, which is aiming to increase the proportion of Australia's electricity generated from renewable energy sources by 2010 and again that program was strongly supported. Now taking all these programs together, as a suite of programs, the best estimate at the moment based on sound scientific research is that they will reduce Australia's greenhouse gas emissions by some 60 million tonnes. That's equivalent to 11 per cent off the level that we would otherwise reach and its brought down the level of Australia's emissions from 122 per cent of 1990 emissions to 111 per cent. Today we talked about how we can bridge the gap of the remaining 3 per cent by putting into place policies that address not only the shorter term goal, which is that 108 per cent, but position Australia for the decades ahead on a longer term basis. Industry was quite clear that what it wants is a range of policies that will actually achieve both the short term and the longer-term goals at the same time.

Journalist:

Will you be taking any specific proposals to Johannesburg on the weekend?

Dr Kemp:

Well climate change is only one of many issues that are likely to be raised in Johannesburg and it is not a major focus of the Johannesburg conference. The Johannesburg conference is concerned with sustainable development in a broader sense and will be focusing very heavily on what can be done by partnerships between developed and developing countries to improve development opportunities for the citizens of those countries.

Journalist:

Dr Kemp, were issues such as the tradeable emissions permits and carbon taxes discussed as possible means of achieving that 108 per cent of 1990 levels?

Dr Kemp:

Well, in the course of the discussion today, there was reference to a whole range of possibilities. The aim of the working groups is to allow business and Government to work together and discuss the range of options that face Australia. What we're seeking to do is to put in place in Australia, a policy framework that will allow us to remain as a strong, competitive, rapidly growing economy while decoupling that growth from greenhouse gas emissions and I'm very pleased to say that business was very supportive of that objective.

Journalist:

Does industry voice speak louder than any other in this debate?

Dr Kemp:

Well, everyone in the community is concerned with this. In the end, addressing greenhouse gas emissions is a task for the whole community, households have got a role to play as well, it is not just industry. But, what was pleasing today is that industry, is very significant source, the most significant source of greenhouse emissions in Australia, is saying that it's prepared to play its part and to so in a very positive way.

Journalist:

What I mean to say is, is the Government listening to industry above all else?

Dr Kemp:

Well, it's not a matter of that at all, on the contrary. I mean, we'll be having meetings with the environment groups consultative forum as well, we've already briefed them on that. Conservation organisations will have a lot to say I'm sure and will want to be involved in these discussions and they will be involved in these discussions. We'll also be putting out specific messages to Australian households. But when it comes to the crunch, industry is the critical area where key action is going to have to be taken and it is the leadership that industry is showing today in saying that it's going to do that. That, I think gives great hope to the Government and to the wider community that Australia will effectively address these issues.

Journalist:

How will you measure their performance, how will you be able to assess whether ... ?

Dr Kemp:

Well, as you've seen we've got very effective measures of greenhouse gas emissions. Australia knows where it is at the moment, it knows where we want to go and industries themselves are very alert to the contribution that they're making. Most Australian industries are now able to tell you what abatement actions they've taken over the last 5 or 6 years and to give a quantitative assessment of that. So, we're in a very sound position at the moment, to put in place policies that we know are going to deliver on the objectives that we've got.

Journalist:

What about the idea of industry getting incentives? Because it seems that industries are tucking in their belts, but without, the idea about getting a better world? What about incentives, business incentives for businesses ... ?

Dr Kemp:

Incentives are definitely an important part of the policy mix and of course incentives are an important part of the Government's programs at the present time. I mean, quite a bit of that $1 billion dollars that the Government is investing in greenhouse gas emission today is going on incentives. As Ian Macfarlane said earlier, what we are looking for is to avoid punitive attitudes and approaches and put into place positive policies that will encourage business to do the right thing and incentives would be a part of that.

Journalist:

What about the issue of landclearing? I mean surely the Government could address issues such as salinity and greenhouse gas emissions by looking at these sorts of issues?

Dr Kemp:

Well, these are issues that do need to be addressed and are being addressed of course through the National Action Plan that the Government's put in place. We've put $1.4 billion on the table with the states to address the issue of salinity and water quality and the Government has indicated that in addition to that, it's prepared to give support to actions which reduce greenhouse gas emissions from landclearing. So, the Government is addressing all aspects of this problem. The area of agriculture is one of the working group areas that will come out of this Roundtable.

Journalist:

Wouldn't mandating to increase the ethanol mix in petrol help households cut their greenhouse gas emissions?

Dr Kemp:

Well, again that's an idea which has been put on the table. It's something that some industries, the sugar industry particularly, are looking at and are keen to promote. Other industries as well are looking at that issue of mandating ethanol, but this is a matter that the Government is looking at closely, very closely in terms of assessing what the market obstacles are to the use of ethanol. Produced in a particular way, ethanol can be greenhouse efficient, it isn't necessarily greenhouse efficient, but produced in particular ways it can be and can make a contribution. But what we are really talking about today is the total suite of policies, the whole national framework of policy that needs to be put in place to position Australia for the longer term. And I believe that's why industry has reacted so enthusiastically to these discussions and to this process because that's precisely what industry needs. It needs the certainty to allow it to plan and invest for the future.

Journalist:

Mr Macfarlane, the issue of statutory caps on effective life for the coal industry, when they wrote to you a few weeks ago asking you to consider such a proposal, to consider doing that, have you given any thought to the proposal?

Mr Macfarlane:

I have responded to their letter and referred their letter to the Assistant Treasurer, Helen Coonan for her consideration. At this stage that's where the matter rests.

Journalist:

Minister Macfarlane, how does the COAG energy review fit in with the Business Roundtable today?

Mr Macfarlane:

In terms of the COAG energy review and that issue was raised today, obviously we're keen to ensure that that ensures that energy is being used efficiently that there aren't barriers in terms of the entry into the market of renewable energy generators and that we make sure that we have a whole framework in which greenhouse gas friendly energy sources are integrated particularly into the electricity grid.

Thank you very much.

Ends

Commonwealth of Australia