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Senator the Honourable Robert Hill
Federal Minister for the Environment

"Australia's International Policy on Climate Change "


Address to the
The American Chamber of Commerce in Australia

ANA Hotel, The Rocks, Sydney
9 July 1997

Introduction:

There is some debate as to whether it was Mark Twain or a Connecticut newspaper editor who first observed that: "Everyone talks about the weather but no-one does anything about it."

Whoever came up with the line first, it was an accurate observation in the late 1800s. The same, however, cannot be said today. As we approach the 21st century, we are doing far more than just talking about the weather -- collectively, we're changing it!

Indeed, the impacts of human activity on the earth's climate is probably the most vexing environmental threat facing the nations of the world.

Climate Change: Background & the State of Greenhouse Science:



For some time now, Scientists have known that the accumulation of certain gases in our atmosphere prevents heat from escaping into space, thereby keeping the planet warm enough for life to survive.

We also know that the atmospheric concentration of these "greenhouse gases," the most prominent of which is carbon-dioxide, has varied enormously during the planet's long history. These variations have been accompanied by dramatic shifts in the planet's climate. Studies of polar ice-core samples and even our own coral reefs are continuously improving our understanding of these natural changes.

But, whereas changes to the earth's atmosphere, and hence its weather, have historically been natural phenomena, the balance of scientific evidence indicates that human activity is now having a dramatic impact on the concentration of greenhouse gases (particularly carbon-dioxide), and a discernible impact on our climate.

According to the Intergovernmental Panel on Climate Change, the best scientific advice available to us, current projections suggest that the earth will be approximately 2 degrees warmer on average by the year 2100. Furthermore, sea levels would be about 50cm higher, weather patterns more severe, and climate changes could increase the range of tropical diseases.

The findings of the IPCC have only confirmed the global concern that culminated in the 1992 negotiation of the Framework Convention on Climate Change. Increasing scientific certainty has also brought a sense of urgency to current negotiations aimed at refining the global response to Climate Change beyond the year 2000. If successful, these negotiations will result in the endorsement of a protocol or similar instrument at the Third Conference of the Parties to the convention (COP3) to be held at Kyoto this December.

Australia's Position on Climate Change & Why We are taking it:



Australia is heeding the message of the scientists, in its domestic response and international negotiations. We accept responsibility for our share of the greenhouse task, but we believe a desirable environmental outcome can only result from policies which are achievable, effective and equitable.

The Howard government has rejected calls for the imposition of uniform legally binding emission reduction targets on developed nations, and the federal Labor Party opposition fully supports our position. Ambitious uniform targets would impose dramatically different economic costs on participating nations, and could amount to significant changes in their comparative advantages.

Indeed, under the uniform targets proposal currently being debated, more is being asked of Australia than anyone else. Australians would pay 8 times more than Europeans, and 5 times more than Americans, according to our most recent assessments. Impacts on our economy are particularly high because of high projected economic growth and lack of relatively low cost substitution possibilities away from fossil fuels.

At the sectoral level, emission-intensive Australian industries like aluminium, iron, steel and coal, would face pressure to relocate to developing nations. This would defeat the whole purpose of the exercise, as Australia's heavy sacrifices would not lead to environmental benefits.

This is also why it is so important that any agreement in Kyoto provides for the involvement of developing countries, also known as non-Annex 1 countries under the Convention -- these nations are currently excluded from any emission reduction obligations under the Convention.

Under a "business as usual" scenario, global carbon dioxide emissions are projected to double from 1990 levels by the year 2020. Of emissions in 2020, more than half will be sourced from non-Annexe 1 countries, as a result of their rapid economic and population growth.

Rather than uniform targets, Australia is seeking a system under which developed country commitments take account of variant economic and other circumstances facing individual nations. This approach -- known as "differentiation" -- would result in Parties incurring similar per capita economic impacts from international greenhouse emission abatement action.

Our proposal is to negotiate individual country targets on the basis of the following set of core economic indicators which are designed to capture the key national circumstances of countries that affect the cost of abatement action.

Australia's proposal has been criticised by some as an attempt to avoid our international obligations. Indeed, these critics fail to acknowledge Australia's contribution to climate change science. Nor do they acknowledge the innovative work we are doing in developing countries through AUSAID. In Indonesia, for example, in co-operation with BP, we are spending $13.2 million to establish solar voltaic lighting in remote and rural communities.

A Credible Domestic Response:



However, our credibility in international negotiation does rest on the strength of our domestic response. All Australian governments, Federal, State, Territory and Local are contributing to the development of the 1997 National Greenhouse Strategy which will provide a framework and fresh impetus for rigorous action into the next century.

The Greenhouse Challenge Program is an innovative federal government/industry partnership. So far 128 enterprises have joined the program. Of these, 42 have signed on to take effective voluntary action to reduce greenhouse gas emissions. Participating enterprises cover the mining, manufacturing and services sectors.

The signatories account for more than 45% of Australia's greenhouse emissions from these sectors and they aim to reduce their projected aggregated emissions by 14 % by the year 2000. A further 84 enterprises have signalled their intent to participate. 19 participants in the program are member of the American Chamber of Commerce.

AmCham members' involvement in the Challenge program is valuable and I encourage those of you who have not yet explored the potential of your business to contribute to the program to contact the Greenhouse Challenge Office. You will find that it there are also good economic reasons for being involved.

In addition, federal funding to local governments under the Cities for Climate Protection program will also lead to significant emission reductions, particularly in urban communities.

How Australia's Position & Performance Compares Internationally:



It is worth comparing Australia's proposal with the positions being taken, and the domestic circumstances of other players in the debate -- particularly, the European Union and the United States.

The EU:



As most of you will be aware, European politicians have in recent weeks endeavoured to claim the "high moral ground" in the Climate Change debate. However, when one looks more closely at their arguments and their circumstances, the "high moral ground" looks more like "thin moral ice."

The EU has essentially proposed that all developed nations be subject to a uniform legally binding target of a 15% reduction in CO2 by 2010 - all nations that is, except themselves and eastern European nations. Their proposal would allow EU nations differentiated individual targets which range from a 40% increase to a 30% reduction relative to 1990 levels.

If implemented, the EU proposal would only subject 8 countries to uniform targets of 15% -- Australia, Norway, Iceland, Switzerland, Japan, Canada, New Zealand and the US. We should also consider that the major emission reductions in Europe are linked to the advantageous circumstances in its two largest member states:

Differentiation would simply result in a fair and equal per capita economic cost across developed nations. ABARE studies have also shown that it would be less damaging economically for not only Australia, but for the United States, Canada New Zealand and Japan as well as providing an equitable avenue for countries whose economies are in transition and, eventually, developing countries to come on board.

The United States:



In the United States, the Clinton administration has expressed strong support for legally binding emission targets, although like Australia, they have refused to nominate specific targets at this point.

There is clearly growing concern in the United States about both the costs of the post-Kyoto arrangements for the US economy, and the environmental effectiveness of any agreement which excludes developing nations such as China. This concern is reflected by a number of recent political developments in the United States:

Against this background, the Clinton Administration supports the establishment of a system of trading greenhouse emission permits between Annex 1 countries in an effort to achieve abatement at the lowest cost.

Australia supports emission trading in principle, recognising its possible contribution to improving the cost-effectiveness of emission reduction, but there would have to be a satisfactory equitable allocation of initial emission entitlements.

Such an allocation would need to be consistent with our approach to differentiated targets, and include a satisfactory resolution to a range of methodological, institutional and coverage issues relating to the practical implementation of an international emissions trading regime.

Kyoto & Beyond:



Japan, Canada, and New Zealand have also expressed varying views on what the post-Kyoto agreement should look like, and we are clearly at a very delicate and crucial point in the negotiating process. Australia has fought an "uphill battle," but recent events have been encouraging.

The growing US attention to the costs associated with uniform targets, and increased awareness of the importance of involving developing countries is welcome.

The decision by the G-8 signified a welcome "turning back from the brink". The eventual wording of the G-8 communique omitted any reference to "uniform" targets, referring rather to "equitable" targets, as did the agreed negotiated outcomes statement of the second United Nations "Earth Summit," held in New York a week after the G-8 met.

With two more formal negotiating sessions before the Kyoto meeting in December (July and October -- both in Bonn), I am increasingly hopeful that an outcome which is environmentally effective and satisfactory to Australia is achievable.

I am also optimistic that the Kyoto outcome will lay the foundations for greater inclusion of the 129 developing nations, These nations are the final pieces in the puzzle, if you like. Regardless of the commitments by developed nations, an environmentally effective outcome to this global problem is only possible with the engagement of these nations.

Flagging this now, is not inconsistent with Convention's recognition that while developed countries should take the lead in combating Climate Change, all parties should co-operate and participate in an effective and appropriate response. However, it highlights how important it is that the developed nations take a lead in Kyoto through an agreement which is economically fair, environmentally effective, and achievable.

Conclusion:

In conclusion, Australia recognises the importance of Climate Change as a major environmental problem which is supported by credible scientific evidence.

We are committed to taking the action required to meeting our share of the responsibility and obligations arising from excessive greenhouse gas emissions

However, we will not be roped into a program which imposes significant and unfair costs on Australians, and , achieves little or no environmental gain in the process.

Instead, we are committed to the development of a fair, achievable and effective response to the problem at a global level, and the implementation of a robust domestic program to reduce Australia's contribution to the problem.

Commonwealth of Australia