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Minister for the Environment and Heritage
Senator the Hon. Ian Campbell
Wednesday, 30 November, 2005
Parliament House, Canberra
[Opening remarks – refers to publications under embargo...]
The news for Australia in terms of tracking towards Kyoto is that we remain on track; we do have a target of 108 percent, the government policy is to reach, or achieve that target, not to go over that target during the first commitment period. The figures will show that there’s about 85 million tonne abatement as a consequence of climate change actions taken in Australia - that’s equivalent to removing every single car, truck, bus and I’m now told aeroplane and ship from the transportation sector during that period. It is a substantial achievement; it’s a substantial achievement certainly not for the Australian Government alone, you can only make a substantial difference to a country’s greenhouse gas emissions of you engage all of the key players and I think one of the elements of the Australian response is that we have been very effective and I would say more effective than most other countries in the world at engaging all of the different sectors. For example, including local government, we have a thing called Cities for Climate Protection Program, which we run through ICLEI, an international co-operative with the Local Government Association Australia. Australia has the highest level of engagement by councils in those programs; it’s a small but important multi-million dollar investment of the Australian Government. So we’ve had great involvement by local councils.
Clearly the States all have their different strategies. Clearly land clearing bans in NSW and Queensland have made - I think they’ve contributed about 18 to the 85 million; industry through the Greenhouse Challenge Plus program - has made a substantial contribution. The Australian Government’s own activities within its own energy efficiency measures, energy efficient targets, energy efficiency labelling, water efficiency labelling, all of these things make a contribution. And you won’t achieve a target unless all of those sectors work together so it is a good achievement.
I think to put it into an international context, the assessment that we make at the moment - I think it’s the same assessment that most countries make - is that there will only be a small handful of countries will meet their targets. It may only be a small handful that will reach their Kyoto targets by domestic measures, so I think Australians should be pleased that we’ve done that. I think the other thing to put the achievement of the target which we’re on track to do – and of course things can go wrong between now and 2012 but we’ll be obviously keeping active at trying to achieve the target – but the other thing to put it in context is in that first commitment period which starts in 1990 and concludes in 2012, the Australian economy will roughly double in size. It will go from about a $500 billion economy to a $1 trillion economy, and the greenhouse gas emissions will in fact increase by about 8 per cent; so a doubling of the size of the economic cake, a doubling of the size of economic activity but a much, much smaller, in fact an 8 per cent increase in the greenhouse gas emissions. So the importance for that, for the world and many other countries are beginning to achieve this is that you’ve got a substantial decoupling of greenhouse gas emissions from economic growth.
Can I conclude by saying that the objective of the Australian delegation, which I will lead, will be to achieve a post-Kyoto framework that is environmentally effective. It is imperative that the world not only continue to do all of the things that it’s doing through technological partnerships, through the new Asia-Pacific Clean Development and Climate Change Partnership, through domestic programs in many of the countries, through the Kyoto mechanisms for those active members of the Kyoto Protocol, the NXA countries through the European trading system, through the flexibility mechanisms, through the Clean Development mechanisms. All of the things that we’re doing at the moment - that are incredibly constructive, incredibly important – need to be ramped up and improved. The Kyoto partners, when I meet with them, and I spend more time meeting with people on climate change internationally than I do doing anything else in my life, all say that making the Kyoto mechanisms work is very, very important business for this year and for this meeting in Montreal. There’s constant criticism of the inefficiency, ineffectiveness, bureaucratic costs and burdens and time delays in a number of the Kyoto mechanisms. It’s very important that they are made to work. It’s equally important that we make sure that the partnership activities – the technology partnership on hydrogen, on geosequestration, on renewables, on Methane to Markets, to work on adaptation that Australia’s leading – all of those things need to be made to work even better; they need to work as much as possible in complement to what occurs within the Kyoto mechanisms. But on top of all of that work - which is I think the most important work for the next four, five, six, years as we come up to 2012 - it is also incredibly important that we put very constructive efforts into designing the post-Kyoto framework. Australia will go to Montreal determined to be a constructive part of building a 2012 - post-2012 framework - that’s comprehensive, that includes all of the major emitters and that is environmentally effective because if we don’t do that we will not save the planet from climate change. Under the first commitment period, greenhouse gas emissions in the world will in fact go up by 40 per cent; under the first commitment period of the Kyoto Protocol greenhouse gas emissions will go up by 40 per cent and the scientists from all around the world tell us that you actually need a 50 to 60 per cent reduction if you are to save the planet from dangerous climate change. So what occurs after 2012 is a matter of life and death for the planet. And Australia – which takes up a very large footprint of our planet; we’re a very large continent, a very large area of ocean that we’re responsible for off our continent and off Antarctica – we have a massive self-interest in the globe getting this right. I don’t underestimate how hard that will be but in Australia you will have a very, very constructive player in trying to get a post-Kyoto framework that is comprehensive, includes all of the major emitters and is environmentally effective.
Thanks for your attendance.
Can you be more specific about what you want of that framework; you're talking about this fresh approach but specifically will you be looking for different targets within that range...
I think that's the most important question. The international discussion that's occurred during 2005 I think has been the most constructive that we've seen for many years. I think we've realised that with the coming into force of the Protocol that we now need to find something more effective to replace it. What I've learned during the year where I've attended the two G8 meetings and the Friends of the President meeting in Ottawa is that - I think the way Tony Blair's described it is the most accurate that I've seen, and the most articulate I've seen - and that is that whatever occurs post-Kyoto needs to understand that countries are not going to have imposed upon them targets or other measures that will limit their economic growth; he said, I think very sensibly, that developing countries have growth aspirations that are incredibly important for them and I say this quite regularly: the world does need to expand the amount of energy it consumes purely for human development.
There are millions of people who do not have reticulated energy in their villages or towns and the consequences for human health, human education and human development are an incredibly important issue for the world. That's why we set the Millennium Development Goals as a group of countries internationally because we want to lift half the world's people out of poverty by 2015; we want to stop people dying.
So we are going to need more energy. I think those who say that we should reduce the amount of energy the world uses as a way of solving the problem really don't understand that huge challenge the world has to lift people out of poverty.
So the approach we need post-Kyoto, in my mind, is one that recognises the development needs of countries like China and India, the Asia-region. Let's say that a solution that suits Europe or Great Britain or Germany or France is unlikely to be solution that suits Asia; a solution that may suit Africa may be a solution that may not suit the Middle Eastern countries or the South American countries.
My attitude as we go to Montreal is that we have to find a way forward that is very clear-eyed, very sensible, science-based, economically and politically-based that recognises that we have all of these countries we have to fit into some sort of comprehensive agreement. I suspect the challenge is harder than we've ever faced before internationally; I don't think the countries of the world have proven that they're that good at coming up with international governance structures that work particularly well. You only need to look at the United Nations itself, the governments of the world tried to reform the United Nations this year and failed. We're still desperately trying to get the World Trade Organisation to come up with sensible outcomes on trade, again, if you could do that you could lift people out of poverty, yet we still can't do that. I know from my own experience in this portfolio...
[Break in tape]...there's three examples of the world not being particularly good at international governance structures to achieve good outcomes. So to expect to do it within the UN Framework Convention on Climate Change, you have to be incredibly optimistic, incredibly positive, incredibly constructive and really hope high but I guess the reality is with climate change, the stakes are very high. If I knew the answer to the questions we would have solved the problem already. It's going to take a lot of hard work but I think the big ingredient is to listen to the wise words of Tony Blair about understanding country's individual interests; and I think the reality of it is - and Mr Blair did say this at the meeting in London that we attended - that you need to understand that countries are not likely to go for a target that imposes constraints on their own economic growth. It's unrealistic to expect that a future Kyoto-style agreement will do that so we have to find something that looks different to Kyoto. So I think when you hear me say that it's unlikely that we're unlikely to have a 'Son of Kyoto' come out of Montreal, I think that's absolutely right. I think if we go for that sort of achievement at Montreal we will walk away in tears. We have to try to build a framework through a series of steps that is comprehensive and effective, and Australia will be a positive and constructive player in not only building a framework but also building a process to get to that framework.
In this post-Kyoto framework that you talk about can you see any place or use for binding emissions targets?
Well I think I've answered that, I think that targets that are negotiated and imposed from outside a nation's borders is very much what Mr Blair is referring to; he doesn't think that's the answer and I think that is unlikely to be part of the answer.
Can I also say that one of the great benefits of getting some sort of comprehensive agreement that may or may not include targets and timetables - I think targets and timetables are going to be very, very difficult. The cold, hard reality is that G77 nations, the developing nations, will not sign up to targets and timetables. The American Senate - people talk about the Bush Administration but I think we should be quite fair dinkum about this - the American Senate, when it came to vote on the Kyoto Protocol under the Byrd Hagel Amendment, went down 95- nil. There's a picture on my office wall, any of you are welcome to come and have a look at it, but there's a picture on my office wall with myself and Chuck Hagel in his office in Washington earlier this year with the roll call of that Senate vote - and although you need a magnifying glass to see it on the photo on my wall - you have Joe Lieberman former vice-Presidential candidate, Democratic Senator, a very distinguished fellow who has done enormously constructive work on climate change; Senator John Carey; Senator John Edwards; Senator Edward Kennedy - a cross-section of conservative and very liberal Democratic senators all voting against the Kyoto Protocol. I think those that say this is the big, nasty sort of right-wing George Bush saying 'no' to the Kyoto Protocol, the reality is the Senate stood against the Kyoto Protocol for very obvious political reasons for anyone who looks at American politics and for sounds environmental reasons. Very dedicated environmentalists in the US Senate, like John Corzine from New Jersey, who I know, voted against this. John Carey and John Edwards went to the last Presidential election with effectively no daylight between their position and Bush on climate change. So I think you've got to recognise that timetables and targets are very unlikely to become part of a post-Kyoto regime but they may or may not be. My view is that you've got to keep all options on the table but the reality is the G77, all the developing countries, the Middle Eastern countries, the countries like India and the United States aren't going to sign up to it. So I think what Tony Blair's basically said post Gleneagles is well, look, let's get real! I think that's the simplest way I can put it. The problem is so large, so important, so much a life and death issue of the planet - and therefore for Australia because we're such a large chunk of the planet - that we have to get real; we have to be very focused on what is comprehensive, what is effective environmentally and we have to seek to achieve that with a very clear-eyed view of the political and economic realities of the world. That's the most useful attitude that I can take to Montreal and say that Australia will be a very, very strong voice for something that's comprehensive and effective. What that's going to look like? I don't really know. But I do know from my years' experience that it won't look a lot like Kyoto because it won't get up. And I think to spend the next five or six years arguing over timetables and targets is likely to lead to an ineffective outcome and I think what we do in the next five or six years - it's a period where you have this enormous goodwill, this enormous action taking place at the government level and the private sector-level - there's a big focus by the private sector, you've seen BP overnight announce the establishment of an entire new division called the 'alternative energy'; they've said in that that Australia's going to see a substantial increase in their investment, for example, in PVRP and solar, that's an example of a very large company who realise to be successful in the next generation they're going to have to move towards, focus their business on a carbon constrained economy. That is the reality for the world, it's the reality for Australia and we need to build on that. And if we spend the next five to six years arguing about timetables and targets and a scheme that may not get majority, comprehensive, inclusive, effective environmental outcomes then that will set back the chances of us saving the world from climate change.
...Incremental targets but given you mention that scientific opinion says that we need to reduce emissions by 50 to 60 per cent in the next 50 years, surely that's the ultimate target. I'm wondering how you measure progress towards that without any significant steps you can tick off on the way?
Well I think the great thing that has come out of Kyoto, and Australia has been - and is recognised internationally as a leader in this - is that we've built an entire accounting system around carbon and other greenhouse gases. So we are measuring everything we do and I think that's one of the challenges that the Canadians have had; I mean we now know from the international accounting that the international hosts of this meeting are going to probably explode their target by close to 20 per cent so that creates its own political imperatives. We have a political imperative in Australia to achieve our target. We accept the fact that the world needs a 50 to 60 per cent reduction in 50 to 60 years and we know the way to achieve that is by fast-tracking the development and deployment of all available technologies. Many of them are existing technologies that need to be brought to market, some of them are slightly over the horizon technologies that need to be demonstrated and deployed. So it's going to require a global research and development demonstration and bringing to market of technologies on a scale that we know the world can do; we've seen the world do it before in many other areas; that's why we've done things like form this huge partnership with America and India, Korea, Japan and China because we don't think that multi-trillion dollar investment is likely to be able to be funded off even a budget the size of the United States government's. We think it will require huge levels of collaboration between governments, industry and, most importantly, between the developed and the developing world. The answer, I think, to your question - in my optimistic view of the world - is that we are rising with greenhouse gases and economic output at that sort of rate at the moment, what we need to do is dedicate the next decade to developing, demonstrating and deploying the sorts of technologies we need to get it going. My own very optimistic view is once you start getting it levelling out as we replace the stationary energy facilities around the globe, the International Energy Agency say we need to build about 7,800 power stations in the next 30 years; that's going to be a $17 trillion investment. State governments in Australia, just to put it in perspective, apart from building desalination plants that spew carbon dioxide at the rate of about 200,000 tonnes a year into the atmosphere, they have on their drawing boards 25 new power stations for Australia.
So Australia is a microcosm of the world in that regard. The world will build 7,800 power stations, roughly, in the next 30 years; $17 trillion of investment. What we want to make sure is that as we build those over the next 20 to 30 years, we build them with technologies which will create much more energy with either zero or very low emissions. So there's the challenge: it's to get the technology that's required to do that, and I think we need to have a very, very clear-eyed view about the fact that we're going to need all of the technologies we know about.
You are going to need to use coal. If you saw Tony Blair's speech overnight and the analysis that's occurred overnight of his speech on his new energy policy, he's setting up a review to look at whether they'll facilitate a massive expansion of nuclear in Great Britain - it's on his website now, that speech. England is moving towards, over the next 20, 30 years, even with a massive increase in renewables, they will have 80 per cent of their power driven by fossil fuels in the next 20 years.
In 20 years time, 80 per cent will still be fossil fuels, in 30 years time. So we need all of the low emissions technologies - cleaning up coal, dewatering coal, gasifying coal, capturing carbon off goal and geosequesturing it - all of those technologies, we need renewables, we need to make sure solar is efficient and as cheap as we can make it; the cost of solar is plummeting at the moment. We need to make sure that wind turbines are deployed where they're efficient, effective, and don't destroy the coastline. We need to be working on the hydrogen economy for transportation. We need every single thing and we need for countries that have got a good use for nuclear, we need them to do it as well and we should be selling Australian uranium to (...inaudible...). So we need every single technology working and we shouldn't be ideological about technology, we should be saying what is good for China? What is good for India? What is good for Australia? How can we use comparative advantage to drive the most effective investment of scarce public and private sector resources into the most prospective technologies to achieve that low carbon future. It's one of the strategies that I have in mind: to seek to get as much costs and benefits of policy responses out there; we want to make sure that when states or other countries or Australian government or anyone comes up with a policy proposal that we understand that putting, if here's a policy that costs you $100 to get a tonne of carbon out of the atmosphere, is there a policy that can actually get five tonnes of carbon out of the atmosphere? We want to make sure that we have policies that achieve the greatest reduction in greenhouse gas possible for every dollar of private sector or public sector investment.
(Inaudible...gasified coal...power stations...key part of our strategy... Inaudible). What's the latest word on coal?
We're just getting in the first raft of proposals under the Low Emissions Technology Development Fund. Ian Macfarlane and I will be also making announcements in relation to the Renewable Energy Development Fund next week. I think we will have a better idea about the time scales and investment levels in all of those different low emissions technologies once we analyse all of the proposals that have come forward under the LETDF. I was given a submission by one company that said they could set up a demonstration project for gasification, literally starting it tomorrow, so in Australia they've got the technology to do it they just want some government money to help. That, I think, David, is fair to say we have received some incredibly good indications of projects under the LETDF at the moment; when we release the short list you'll get a much better idea of the sort of timetable. But some people say geosequestration is unproven, it's going to take 10 or 20 years - geosequestration itself, Australia is one of the world leaders in trying to build a regulatory regime, we've got companies like the Gorgon Partners, with Chevron Texaco as the lead, now in the very, very late stages of looking at the go-ahead of the biggest geosequestration project on the planet; it will be bigger than all of the other geosequestration projects that already exist. People say that it's unproven, they've got them in Norway and Iceland already, hundreds of thousands of tonnes of carbon being pumped under the sea already and we will - if the Gorgon project goes ahead - have a geosequestration project bigger than every other project in the world combined. So the actual pumping of the carbon under the ground is something that Australia is likely to have a significant comparative advantage in, the next stage of geosequestration for fossil fuel-fired powered stations is to capture the carbon off the smokestack. And that technology is where the challenge is for geosequestration in terms of power generation. Gasification, I'm told, is something that is available to us now...
Well we've got a company that believes that it can make it economically viable virtually straight away, probably with assistance from our demonstration fund. That's what it's there for. We're putting in, I would say, per capita, it would be one of the biggest public sector investments - I think per capita I'd be safe to say that - in the world in terms of trying to fast-track these technologies. And one of the things that I have said repeatedly for the last year is that the Victorian Government are to be given full credit for setting up a Low Emissions Technology Demonstration Fund in Victoria, which we are working with the Victorian Government to make entirely complementary to with program, so if there is a proponent of a demonstration project in Victoria they will be able to get funding from our fund and the Victorian fund and the guidelines will be entirely complementary, if not exactly the same. I think rather than Premier Iemma coming up with fatuous $25 million plan on a bit more research and shifting state car fleets across to biodiesel created by a series of biodiesel plants that Commonwealth funds have built; it's all good and well. I think that if each state was to establish a Low Emissions Demonstration Fund to match the Commonwealth fund that would be a huge breakthrough for Australia. We're asking the states between them to kick up $500 million. The Victorian Government's taken the lead and I would strongly urge NSW, Queensland, WA, in particular, to follow.
...Inaudible...(nuclear power in Australia)?
I think what's changed is that Leon Davis, to his great credit, came out early in the year and said 'right, I think we should have a debate about it'. It is a useful debate. My view hasn't particularly changed, I do think that nuclear power is incredibly politically sensitive in the Australian electorate but I think to have an open, clear-eyed, well-informed debate about it will diminish that concern; I think that's just being fair dinkum about it. I think Nick Minchin's views about it are quite right: it is a political risk to be seen to be champions of nuclear power. But I also think economically, and I hope the study that Minister Nelson has alluded to can help flesh out some of the details on this. Ultimately all of these options should come down to costs and benefits and this is why I say we need to have a well-informed debate. People need to know if you're going to build a wind turbine what is the cost per tonne of carbon that a wind turbine will save you in carbon? If you're going to got to PVRP, what are the costs and benefits? If you're going to go to clean coal, what are the costs and benefits? When people know there are costs to them in each of these options, it will be a better informed debate. So having a debate about nuclear power is a good thing. I remain to be convinced that nuclear power is likely to be an economic option for Australia for a seriously long amount of time. I strong believe that if you care deeply about the environment, as I do, that you will ensure that every piece of scarce investment from the public and private sector goes to the very best environmental outcome. That should be our goal. Painting things green and doing trendy things and making it look like you're doing something - the problem is too big to do that. There's a huge, huge attraction to politicians to do things that make it look like they're doing something as opposed to doing something that's going to make a difference. I hope that I can add to the debate that it's important.
I've said that all technological options should be on the table for the world. I think countries, because of their geography and because of what they have in terms what we've been given in terms of resources, we have to look for our comparative advantage. And I think we have a huge comparative advantage in a range of areas at the moment. The work that the White Paper did on that is world leading work; it's saying here are all the things Australia has, here are the things we do well, solar is clearly one of them. I happen to agree with the Labor's spokesman on that - Australia can become the Silicon Valley of solar and that's why BP are massively ramping up their investment in Australia. Solar is an area where we do very well and we're going to continue to do well.
Clean coal, fossil fuel, gas - all of these things are things that Australia is abundant in; we have technological advantage; we have huge investments in terms of research and development and science. These are things that we can make a huge contribution to the world in, we can develop the technologies, the breakthrough technologies and deploy them and get huge environmental impacts for the world and a good economic outcome for Australia. So that's where I believe we should be putting in our major resources. Does it mean you shouldn't go off and spend a million dollars having another look at nuclear power for Australia?
No, it shouldn't because I think we should have a very open mind about what technologies we use. I happen to think that report will find that nuclear - when you look at the costs and benefits over the life of a nuclear plant - are likely to be very, very expensive when there are far better things to spend our money on. We have a 30 or 40 year horizon in which to get this investment right, decisions we make now are going to make a big difference to how we perform over the next 20, 30, 40 years.
What's the latest on the January talks?
January is confirmed. Firm dates will be announced as soon as all of the governments have agreed to announce the dates but it will be in January, it will be in Sydney and we will have incredibly high-level representation from all of the countries, including...has it been publicly announced, the US delegation?
You can announce it now!
(Laughs) I'd better be slightly cautious but as I say, extremely high level representation. We're very, very happy with the progress of the arrangements for the meeting and very happy with the sorts of policy outcomes that we expect to be able to announce at the meeting. It should be very exciting; it will keep some of you back from your holiday, including me!
Thank you everybody.