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Australian Government Minister for the Environment and Heritage
Senator the Hon. Ian Campbell

28 November 2006

Ministerial Address to the 17th Annual Power & Electricity Congress

Can I firstly say that this is a very important day for this industry. I don't think that any of the people in this room should underrate the importance of the decision that was made by Justice Nicola Pain yesterday in the News South Wales Land and Environment court to say to the owners of the Anvil Hill coal deposit that their approval can't proceed at this stage because they didn't take into account the greenhouse gas emissions that a potential customer for that coal, potentially on the other side of the planet, would create from it. It is at odds with a decision that was made in a Queensland court only a few months ago.

But the importance of this, but I probably don't need to explain it to you, but I do need to explain it to the public of Australia is that later this week in the Senate the Greens will be moving an amendment to my Environment Protection and Biodiversity Conservation Act to install in that act what they call the greenhouse trigger. Now what that means is that for every approval required anywhere in Australia the power to stop a mine, a coal mine or any other industrial facility that creates greenhouse gas emissions would be shifted straight to Canberra. The decision would be in the hands of the Government in Canberra, and would ultimately - because the decisions of the Minister for the Environment can be challenged in the court and the processes can be challenged in the administrative appeals processes it - will ensure that people like Justice Nicola Pain could effectively stop any coal mine, or in fact could close down existing coal mines if they were seeking to change their operations or needed approval, or do for example a new export, if they were about to sign a new export to another country, those approvals could be challenged in the court.

So what we have here is a very big test for the Australian Labor Party, they will be given the opportunity later this week or early next week when they vote on Christine Milne's amendment to declare once and for all where they stand in relation to the coal industry. My assertion and it's a harder case to make than that which the Greens and the Labor Party get away with and that is you can solve the whole problem by building some wind turbines, sticking some solar cells on schools and shutting down coal mines. That is how they would let the public think that you can deal with the issue of greenhouse gas emissions and climate change.

If you take the issue of climate change seriously - and I think we should, I think we owe it to the public here in Australia and around the world to tell them in very clear terms based on science, just what the issue is and then how you can in practical terms solve it. It's a practical issue, if you accept the fact that mankind has post-industrialisation emitted about a trillion tonnes of carbon dioxide or equivalent gases into the atmosphere. If you accept that, that does create a greenhouse effect, that it warms the planet, that the science and very accurate recordings will show that the warming is of the order so far this century, (the past hundred years I should say) of the order of around 0.6 or 0.7 of a degree that has warmed the oceans as well. There has been measurable rises in sea level that the warming is a roughly double at the poles. With all of these things if we continue to do what we are doing can cause substantial global warming and substantial changes to climate. If you accept all of that, and I do, and I think most people do, but I respect the fact that there are other who are yet to be convinced, that debate can go on.

But I also think sensible conservative-minded people should read the signs, understand the signs, sure debate it and argue it, but work on the basis. I think that Rupert Murdoch actually put it relatively sensibly here as did Michael Chaney recently, he said, look even if you are sceptical about it, you have to as a conservative businessman with responsibilities to your shareholders say that this is a substantial risk that we have to deal with.

So even for the sceptics I'd say stay sceptical. I'm not, I think the science is very strong and overwhelming, but even if you are a sceptic recognise in your own business this is a risk you have to deal with and if you get left behind then you will get left behind. But if you approach the problem in that way which is the way I've been approaching it for a couple of years, you have to recognise that you need solutions which are across the whole portfolios of technologies, you need solutions that are going to involve the investment of some of dollars across the planet over the next twenty or thirty years. The International Energy Agency's latest figures show that we will need to invest around twenty trillion dollars just to meet the expanded energy requirements of mankind. They would estimate roughly a doubling of the energy that needs to be produced around the globe in the next, I think, 40 years roughly. Now that is very similar to what we will need to do in Australia, we want to have a strong growing economy to provide future generations with the sort of opportunities that we've seen, we want that to occur and we will need more energy to see that occur, and that is a very good thing.

We have to link energy security and the quality of the energy supply and the quality of the marketplaces and the regulatory structures and the governance structures around all of that to sensible economically rational, dare I say it, policies to address climate change. Alan you mentioned that I have just come back from Nairobi, the great thing about Nairobi was that what Australian has been saying for the last couple of years while I've been Environment Minister which is; don't kid the world that having this thing called the Kyoto protocol which includes 35 countries, around 30% of world emissions and heading south because countries outside the commitments are actually the rapidly expanding ones, is going to solve the problem. Then again it is another one of those falsehoods that is spread by the left in politics, Labor and greens and others, that if you sign Kyoto, you will solve the problem.

The reality in Nairobi is that even countries that have signed Kyoto, like our old friends from Europe recognise that it is simply not going to work. We were shoulder to shoulder with the Europeans pressing for a review of the Kyoto Protocol. And it took us until three o'clock on the last morning of the last day of the conference and always occurs that way pushing hard against the opposition of the developing countries, or the rapidly industrialising countries as I think it is better to call them to get even a review because the developing countries or the rapidly industrialising countries like the Kyoto Protocol just as it is because there is no commitments and it imposes the constraint on the industrialised world but no constraint on rapidly industrialising world. We all know that if you are going to have an effective global response you do need all of the countries to have some form of commitment. I think that's the best feedback I can give you out of the Nairobi Conference is that there is a thorough recognition of the position that Australia has been advocating now for a couple of years.

Kyoto is not going to get you there, but you do need some form of all encompassing and inclusive global agreement because as I have said and Tony Blair is beginning to say now, you could in fact shut down your entire industry here in Australia, get rid of the power industry altogether, close it down, no coal mine, no power stations and within ten and a half month the growth in the Chinese industry sector will entirely replicate the benefit of closing down the whole of Australia. We are 1.46% percent of world emissions, and China is growing at faster than that rate every year. Tony Blair has now started saying that the same applies to England. I think England is around 2% of world emissions and he's saying that China would replicate their emissions within a couple of year.

And that just underscores in a nice rhetorical way the importance of effective global action. It also requires effective action here in Australia, we don't want to be behind the game, we want to be in front of the game and we will be in front of the game by investing in technologies as we have down right across the whole spectrum of those technologies, not saying we can solve the problem with a few wind turbines, solve the problem with a few solar panels, all of those technologies will make a contribution, that's way we've just backed solar systems for example to build the biggest solar powered station in the world, but equally we've have gone off the West Australian coast and said to the Gorgon partners we will help you fund the biggest carbon capture and storage project in the world that's why we are working with members of the coal industry to do clean coal technologies working with the geothermal industry, working across all of the technologies, working with land use changes. This government has been responsible for planting in excess of 750,000,000 trees in the past 10 years through a whole range of policies, working with land holders, working with the forestry industry. All of these technologies can make a difference and will make a difference and it is in Australia's economic interest to be at the forefront of developing those technologies.

How wonderful it would be for Australia if working with the coal industry we build the most effective coal gasification and carbon capture and storage facility here in Australia, get that technology together, get ahead of the game, get on the front of the wave, and then start exporting that know-how and technology to the rest of the world. Just as we are doing with energy efficiency into China. In China you can transform using Australia expertise in energy efficiency just by having consultants go up there and reengineering a lot of their existing capital stock. You can get 10%, 20%, 30% energy efficiency savings in China by doing that so there are phenomenal economic opportunities for Australia in the climate change action space and I am very proud of being part of a government that is focused on practical solutions.

If I could conclude and allow time for questions, the future policy directions I think are equally exciting, we do have a commitment as a government to meet the Kyoto target, it was a target we negotiated in good faith and the Prime Minister has reiterated that if because of the excellent economic management of the Howard-Costello team and the brilliant management of all of you and your businesses is expanding the economy at this wonderful rate that we are under some stress in reaching that target and it has become obvious to me in recent weeks that although we've been on track to meet our Kyoto target for the last few years that, that is at some risk. The PM has said that we are committed to achieving that so there is the opportunity to look at a range of new policy options and they are before the government at the moment.

Secondly the Prime Minister I think has very sensibly set up the Switkowski review which again underpins the fact that we are going to be technology neutral on this if you're serious about climate change you cant just kid the people that you can fix it with a bit of renewables and a bit of energy efficiency. You are going to need all of the technologies, and I think that the Switkowski review shines a light on that fact. The world will not address climate change unless it substantially increases the amount of nuclear power that's generated in the world. We will not address climate change unless we seriously work with the coal industry and the fossil fuel industry to clean up coal and capture carbon from coal, equally working with all of those other technologies. The political party that says that you should just ignore nuclear because you have got a 1960s ideological hang-up about it can be judged [inaudible] serious about climate change. It is as simple as that, so you need all of those.

The last one is that over and above the Switkowski Review the Prime Minister has also indicated that he is going to in the near future establish a task force to look at market mechanisms as a market based way of driving climate change policy, creating a secure policy environment for you industry and others, to look at how a market mechanism in Australia, a trading system, a carbon pricing system could be part of a global system. We underscored that fact that there is no use having some sort of system in Australia that drives up the price of carbon, creates a quasi-tax on carbon and then drives investment offshore. There is no use making yourself feel good by setting up a trading scheme that just sends carbon emissions off to Indonesia or China or some other jurisdiction where they don't have a trading system. So, Australia has got to define the policy balance looking for a market mechanism, looking for a carbon pricing signal in Australia, but recognising you need some sort of global marketplace so you don't get a competitive disadvantage in Australia.

It's a big policy challenge; no one has fixed it yet. The Europeans have really made a bit of a hash of it quite frankly. Any market that's trading a commodity for '30 a tonne this time last year and it's down to '8 a tonne this year, I mean that is a black Tuesday-esque collapse of the market. We know that they haven't got it right, there are carbon leakage and trade competitiveness issues that are right there with Europeans dealing the market. Their approach is not working, there has not really been a marketplace established yet that works well. I think it's to the great credit to John Howard that he sees that you do not just need infrastructure, government effectively intentionally accused of picking winners, although we do have a portfolio approach to this and look at how a market mechanism might work in cooperation with an emerging global market and see what Australia can do.

So I think it shows that we are deeply committed to this, working with industry, working practically, working within our region, working with our Asia Pacific partners working at the United Nations level and having some seriously world leading investments here at home and staying committed to achieving our Kyoto target. It is a difficult policy mix, but it's that it is very exciting to work in, very exciting to work with your industry. I thank you for all the support, assistance and advice you have been able to give me recent months and it is good to come back, having been at the first conference last year.

Commonwealth of Australia