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Thursday, 20 November 1997
Page: 10921


Mr HOWARD (Prime Minister)(12.30 p.m.) —by leave—Since its election the government has addressed the critical issue of global warming in a way that effectively promotes Australia's national interests.

Those interests lie in both protecting Australian jobs and Australian industry whilst ensuring that Australia plays her part in the worldwide effort needed to reduce greenhouse gas emissions.

From the start, we have made it plain that Australia would not accept an unfair share of the burden. We have rejected and will con tinue to reject mandatory uniform targets which advantage many developed countries to the distinct disadvantage of Australia.

We have also made it plain that we are not prepared to see Australian jobs sacrificed and efficient Australian industries, particularly in the resources sector, robbed of their hard-earned, competitive advantage.

Moreover, we have persistently stressed the need to involve developing countries as their participation is crucial to any lasting solution to the global warming problem.

These principles have guided our approach to the greenhouse gas issue.

There is now clear evidence that Australia's campaign for equity and realism has won wider support and so, far from our country being isolated on the issue, there is growing international support for the view that the approach of, say, the European Union is both unfair and unachievable.

We have an obligation to defend and protect Australian interests, Australian jobs and Australian industry, and that is an obligation we will always fully discharge. We also owe it to future generations of Australians to play an effective role in the global reduction of greenhouse gas emissions.

The government's approach to development and the environment has been balanced and far sighted.

That approach is reflected in the $1.25 billion Natural Heritage Trust. That trust promotes practical ways to rejuvenate the land, rivers and oceans and is the most profound commitment of any Australian government to the Australian environment.

The same balanced approach is behind our regional forest agreements where the practical commitment to equally boost jobs and protect forests has resulted in 409,000 hectares of additional reserves through the two agreements so far signed.

That balance is also reflected in the protection and management of our seas and oceans through the development of a national oceans policy. This will build on the $106 million already provided through the Natural Heritage Trust for restoring the ocean environment.

This same consistent balanced and far-sighted approach has been applied to the greenhouse gas challenge.

Today I announce the largest and most far-reaching package of measures to address climate change ever undertaken by any government in Australia.

The package carefully preserves a unique environment and lifestyle for our children's sake, defends wealth creating efficient industries and promotes lasting employment into the future. It provides a durable framework to promote Australia's national interest towards the year 2010 and beyond.

In a comprehensive manner, it replaces and far exceeds the random, disjointed projects of the former government.

The world's climate scientists have provided us with a clear message—that the balance of evidence suggests humans are having a discernible influence on global climate.

What is required is sober, sensible but forward-looking action to reduce greenhouse gases and this is the approach my government will adopt.

Although Australia contributes only 1.4 per cent of the world's greenhouse gas emissions we want to play our part in meeting this challenge. But pulling our weight does not mean carrying more than our share of the burden. Only with all countries working together, carrying equitable burdens, can we achieve an effective global outcome.

This will require creativity, persistence and, in some instances, sacrifices—but the benefits of preserving our environment and quality of life for the sake of our children are too important to forgo.

Playing our Part—New Domestic Greenhouse Measures

For many reasons Australia is quite unique.

Our economy has evolved on the basis of our abundant supply of natural resources and efficient production and processing of fossil fuels and mineral resources. Fossil fuels currently provide 94 per cent of our energy needs—far more than that of any other OECD country.

Our population is expected to grow by 30 per cent from 1990 to 2020 compared to less than three per cent in Europe.

We will continue to experience stronger economic and employment growth than most OECD countries.

Our cities are decentralised and widely separated, resulting in high transport use per capita compared to the smaller, closely populated European Union countries.

Our trade profile means that about 20 per cent of our greenhouse gas emissions are embodied in our exports (notably aluminium and agricultural products)—double the OECD average and the highest in the industrialised world.

Our emissions profile is also unique among developed countries where the energy sector accounts for about half of our emissions, compared with an average of 80 per cent for OECD countries; and where land use and forestry account for around 20 per cent of Australia's emissions. This reflects the great significance of agriculture to the Australian economy.

In addition, Australia has a responsibility to export the resources necessary to fuel the growth of her regional partners and to provide the food required for their people.

For all of these reasons our emissions are projected to grow faster than other countries. Uniform target proposals that do not take these circumstances into account will place an unfair penalty on Australia and Australians.

Reducing emissions growth is therefore particularly challenging and is more costly for us than for most other industrialised societies. But we are still committed to playing our part in cutting emissions.

Without further action, Australia's emissions are expected to grow by around 28 per cent from 1990 to 2010. This is based on a comprehensive approach excluding land use change. Emissions from the energy sector alone are expected to grow by around 40 per cent.

The package I announce today will achieve a dramatic reduction of a third in our expected net emissions growth from 1990 to 2010.

These measures will reduce our net emissions growth from 28 to 18 per cent in that period, or some 39 million tonnes of emissions. This is comparable to the emissions from all the electricity used by households right across Australia.

This is a realistic, even conservative, calculation of the emission benefits. The benefits from plantations and land use changes, for example, could well be greater than we have estimated. With the most effective implementation of the package, the full support of industry and the community, and the best contribution of the states and territories we may well achieve even greater reductions.

Taken with greenhouse measures Australia already has in place, the package will mean Australia's effort broadly compares on the same basis to what the United States and the European Union are proposing. Moreover, we are not waiting for others to act.

None of us should underestimate the commitment required to achieve these outcomes. They will require hard work from all of us. The package gives the lie to those who make exaggerated but ultimately empty claims that fine sounding targets can easily be achieved.

The measures have been developed against the background of our national circumstances and our national interest. They also have been developed against achievements by Australia to date such as reform of our electricity and gas markets, halving the amount of waste going into landfill by the year 2000 compared to 1990 levels and the efforts of particular industries such as the aluminium industry which will reduce emissions by more than 20 per cent over the same period.

The government is seeking realistic, cost-effective reductions in key sectors where emissions are high or growing strongly while also fairly spreading the burden of action across our economy.

The package will allow us to improve the performance of our highly competitive energy-dependent sectors while also stimulating new sectors such as renewable energy. It will demonstrate we can improve the environment whilst generating new jobs and exports. Far from risking 90,000 potential jobs, as would be the case if we accepted some proposals, the measures I announce have the potential to create both wealth and additional jobs.

They address emissions across many sectors—residential, industry, transport, energy, agriculture, forestry and government operations—in an integrated, effective and, above all, fair way.

We are prepared to ask industry to do more than they may otherwise be prepared to do, that is, to go beyond a `no regrets', minimal cost approach where this is sensible in order to achieve effective and meaningful outcomes.

The government is providing $180 million over five years for these measures. This package far exceeds the efforts by previous governments on addressing the greenhouse gas problem.  Most of this expenditure will be spent on completely new measures, while some existing programs will be substantially expanded.

Importantly, the level of Commonwealth spending does not represent the whole story. These initiatives will stimulate additional actions and investment by the states and territories, industry and, in some cases, consumers.

Our measures build on those in the draft national greenhouse strategy. State and territory leaders have indicated their support for our greenhouse response and have agreed to work with us cooperatively in implementing it and in considering further action of their own.

Let me outline some of the specific measures.

Renewable Energy

Renewable forms of energy currently contribute about six per cent to Australia's total energy needs, an amount comparable to the OECD average of 6.4 per cent. The government will be committing $65 million to ensure that this level is increased.

By contributing $21 million, we will create a specialist renewable energy innovation investment fund to provide government and private sector venture capital for companies with high growth potential.

So that we can capitalise on our skills we will provide a $30 million loans and grants program for the development and commercialisation of the renewable energy industry. This will directly support the creation of new businesses, jobs and exports. This funding represents a huge increase on the $4.8 million over four years spent by the previous government on the renewable energy industry program.

And we will also provide $10 million for some leading edge renewable energy `showcase' projects in areas such as tidal power, solar thermal power and photovoltaic technologies.

The government will work with the states and territories to set a mandatory target for electricity retailers to source an additional two per cent of their electricity from renewable energy sources by 2010. This will accelerate the uptake of renewable energy in grid based electricity and provide a larger base for the development of commercially competitive renewable energy.

This enormous boost to renewable energy development is a huge improvement on programs such as the Energy Research and Development Corporation which had been overtaken by changes in the energy sector.

Our new programs will stimulate innovative technologies and wealth-creating businesses and energy suppliers who provide power to communities, employ Australians and export to the world. It is, in every sense of the word, an action oriented approach.

Energy Market Reform

The possibilities for fuel substitution and innovation will be enhanced as we continue and accelerate the process of energy market reform.

We will work with the states and industry to develop and implement by the year 2000 efficiency standards for fossil fuel electricity generation, including for brown and black coal and gas fired plants.

This will ensure the adoption of best practice new technology in each fossil fuel class. Standards will also be phased in to encourage emissions reductions in existing plants. The standards will apply to new electricity generation projects and existing generation.

These initiatives mean that Australian energy suppliers will be able to stand tall when it comes to being clean, green and cost competitive.

Automotive Industry

In 1995, 10 per cent of Australia's net emissions were generated by cars, four-wheel drives and light commercial vehicles.

We will implement an automotive industry environmental strategy, in consultation with the automotive and oil industries and other stakeholders, to enhance the industry's environmental performance.

This strategy will involve several elements including:

1.   mandatory, model specific, fuel efficiency labelling;

2.   harmonised noxious emissions standards with international standards by 2006;

3.   a 15 per cent fuel efficiency improvement target by 2010 over business as usual through negotiation with automotive companies; and

4.   bringing forward the phase-out of leaded petrol, taking equity considerations into account.

The government will also develop a basic network of compressed natural gas refuelling stations in selected metropolitan areas to encourage light commercial vehicles to switch to this more environmentally friendly fuel.

These measures will reduce air pollution and improve the health of our cities as well as reducing greenhouse gas emissions.

Codes and Standards

The government will also work with the states, territories and industry to develop energy efficiency codes and standards for housing and commercial buildings, appliances and equipment.

For industrial and commercial appliances and equipment we will implement an improved labelling program and minimum energy performance standards.

We will expand the nationwide house energy rating scheme by including a mini mum energy performance requirement for new houses and major extensions and we will work with the states, territories and industry to develop voluntary minimum energy performance standards for new and substantially refurbished commercial buildings.

These initiatives will take us to best practice standards in these important areas. If this voluntary approach does not achieve acceptable progress within 12 months, we will work to implement mandatory standards.

Tree Planting and Revegetation

Plantations and revegetation are important means of soaking up greenhouse emissions—known as greenhouse sinks.

The government will work to remove impediments to the development of commercial plantations to achieve the plantations 2020 vision of trebling the plantation estate by 2020. We will establish a bush for greenhouse program to encourage corporate funding of revegetation projects to act as sinks.

This will build on the $22 million for farm forestry and the massive $328 million revegetation program being undertaken under the bushcare initiative of the Natural Heritage Trust, which represents the largest revegetation effort ever undertaken with almost a tenfold increase on the funding of revegetation programs of the previous government—which their successors in opposition did everything to prevent coming into force.

Greenhouse Challenge Program

The greenhouse challenge program is central to the partnership between government and industry to reduce emissions.

This program currently has 100 signed agreements with businesses from a wide range of sectors.

In total, companies that have signed agreements account for over 45 per cent of Australia's industrial emissions.

Participants have committed themselves to reduce their forecast growth in emissions by about 22 million tonnes of carbon dioxide equivalent by the year 2000.

The announcement today provides extra funding of $27 million to extend the program to smaller companies and to increase the number of large and medium company participants to 500 by the year 2000 and to more than 1,000 companies by 2005.

Commonwealth Greenhouse Office

In order to ensure this package of measures is delivered, a Commonwealth greenhouse office will be established within the department of the environment. This office will have responsibility for the coordination of domestic climate change policy.

The office will be the lead Commonwealth agency on greenhouse matters. It will provide a mechanism to ensure domestic greenhouse matters receive the priority the issue deserves and the government intends.

Other Measures

Further measures as part of this statement include action to reduce emissions in urban areas, initiatives to work towards best energy practice in targeted industries, funding towards an ethanol pilot plant, the development of a national carbon accounting system, funding to support various national greenhouse strategy related measures, and additional funding to ensure commercial joint implementation projects in developing countries.

We are also committed to reducing emissions from the Commonwealth government's own operations, including purchases of more energy efficient equipment and appliances. We will be setting fuel consumption targets for the entire Commonwealth vehicle fleet.

Australia's Approach: Forward Looking and Global

The government believes that, like our national effort, the international response to climate change must be effective in terms of meeting the environmental challenge, equitable in terms of the costs to be borne by individual countries and least damaging as possible to the living standards and employment prospects of our people.

For these reasons Australia has proposed that individual targets for industrialised countries be differentiated according to national circumstances.

Uniform target proposals based on a 1990 base year would impose a disproportionate, even devastating, burden on Australia. The cost to our economy of meeting a uniform target of the order proposed by the European Union would impose a cost on all Australians that other countries would not accept.

Some industries fundamental to the health of our economy would be hardest hit. The non-ferrous metals, iron and steel and coal industries would be seriously affected, and future investment and employment growth would be significantly jeopardised.

Even stabilising our emissions at 1990 levels would put at risk $68 billion of energy intensive projects and the tens of thousands of potential jobs for Australians that go with them.

Significant regional dislocation would result in places like the Illawarra and Hunter Valley in New South Wales, the Bowen Basin and Gladstone in Queensland, Geelong and the La Trobe Valley in Victoria, Port Pirie in South Australia and the Kwinana region of Western Australia.

Moreover, the European Union is not asking its own members to reach a uniform target. Portugal, for example, would be permitted to increase its emissions, under the European Union plan, by almost 40 per cent.

We reject this approach of punishing Australian industries to carry a burden that other countries are not prepared to accept. It is far more sensible and responsible to improve the performance of existing industries and build new green industries to provide for both jobs and the environment.

We believe the way forward is for all countries to play a fair part, with flexibility in the methods used to reach the targets.

We strongly support a comprehensive approach to setting targets which covers all greenhouse gases, emission sources, sinks and sectors. The wider the coverage the greater the flexibility to maximise environmental benefit and minimise economic cost.

Australia also believes that an international emissions trading regime would help minimise costs of reducing emissions. We would support emissions trading on the basis of a satisfactory initial allocation of emission entitlements and a practical resolution of the administrative difficulties involved.

Joint implementation measures whereby developed countries can work with developing countries on emission reduction projects can achieve worthwhile outcomes. Australia is looking to Kyoto to support joint implementation as a means of engaging developing countries in the global effort.

All along we have argued that climate change is a global problem and all countries should contribute to the solution. Action by developed countries alone will be ineffective. Over time, developing countries must become involved—as by early next century they will account for over 50 per cent of global emissions.

The Kyoto outcome should provide for procedures and time frames for negotiating targets by major developing country emitters.

Australia's proposal for negotiated, differentiated targets is the best basis for a fair outcome which has a prospect of actually being put into practice and improving the world's environment. It is also the best basis for encouraging developing countries to take on commitments to reduce emissions.

The government has said it would not agree to legally binding targets until their nature and content and implications for Australia are clear. We will not agree to any targets that impose substantial costs on Australia that are not faced by other OECD countries.

Conclusions

With the package of measures I have announced today, the government is not posturing for negotiating purposes with theoretical targets but is already taking practical steps to reduce Australia's greenhouse gas emissions.

It is a package that goes well beyond what any previous government has sought to do. It is a package that puts Australia at the forefront of international action. And it is a package that Australia will implement even if the international community fails to reach agreement at Kyoto.

As I have demonstrated to date, my government will continue to stand up for the Australian national interest, jobs and economy in the international negotiations.

We will not agree to an outcome that burdens Australia and Australians in an unfair manner.

My government has had some success in our efforts to argue the case that an effective result at Kyoto will require an equitable approach. We have managed to shift the international debate. As a result of our efforts, there is greater recognition of the need to take into account individual national circumstances if there is to be a successful outcome—as the British Prime Minister, Mr Blair, acknowledged to me in our recent discussions.

There is also greater recognition of the need for flexibility to ensure countries can make a contribution to the global effort.

At the South Pacific Forum and most recently at CHOGM we were successful in gaining acceptance of the need for global engagement by both developed and developing countries.

Nevertheless, let there be no doubt the Kyoto negotiations will be very difficult.

Australia's environment minister, Senator Robert Hill, who will be leading our delegation at Kyoto, will be doing his utmost to secure an agreement that will both be fair and equitable to Australia and Australians and be effective in reducing global emissions.

Ultimately, the success of our domestic measures depends upon the goodwill, commitment and action by ordinary Australians, consumers, farmers, families, firms and industry groups, as well as governments federal, state, and local. The greenhouse challenge is theirs and quality of life of our children depends upon their strength of purpose.

Mr Speaker, I present a copy of the following paper and appendix:

Safeguarding the Future: Australia's Response to Climate Change—Ministerial Statement, 20 November, 1997

Motion (by Mr Reith) proposed:

That the House take note of the paper.

Motion (by Mr Reith)—by leave—agreed to:

That so much of the standing and sessional orders be suspended as would prevent the Leader of the Opposition speaking for a period not exceeding 27 minutes.