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Speech at University of Korea: Australia and Korea address the challenge of climate change, Korea

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Australia and Korea address the challenge of climate change

Speech at University of Korea

27 April 2012


Australia-Korea relationship

Australia’s relationship with the Republic of Korea is a very important one.

We have close cultural ties, and longstanding political and economic links.

Korea is one of Australia’s largest trading partners, in fact the fourth largest in

bilateral trade - and we work together on many global issues including climate


Need for Action

Climate scientists around the world are telling us that carbon pollution is causing

climate change:

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o The concentration of greenhouse gasses in the atmosphere is now higher than

at any other time in human history.

o As a result, sea levels have risen faster in the last 20 years than in the 20th

century as whole.

o And each decade since the 1940s has been warmer than the last.

Scientists have warned us that extreme weather events, such as droughts, floods,

heatwaves and bushfires, are likely to become more frequent and severe if

emissions aren't reduced.

We will face substantial economic costs across a range of sectors including energy

supply, water, agriculture, and infrastructure.

Scientists agree that the worst effects of climate change can be avoided if we reduce

carbon pollution.

It would be irresponsible to ignore these scientific warnings and just hope the

problem will go away. It won’t.

Countries like ours have a responsibility to act.

Australia and Korea are each responsible for approximately 1.5 per cent of global

emissions, placing our countries amongst the top 20 largest emitters internationally.

Australia in fact has the highest per capita emissions in the developed world.

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It's in the national interest of both countries that, as part of a global solution, we

take action to minimize the dangerous impacts of climate change.

I am here in Seoul today to meet with my counterparts in the Republic of Korea,

including Minister for Environment Yoo Young-Sook.

It is my hope that this visit will strengthen understanding between Australia and the

Republic of Korea on the urgency of effective climate change action.

For I believe there is a great deal we can learn from each other when it comes to

action on climate change.

Low-Carbon Growth

Our countries need to make a transition to low-carbon, green growth.

Australia is now implementing policies that will break the link between economic

growth and growth in greenhouse gas emissions.

We have chosen to harness the power of the market to drive the transformation

that is needed to reduce emissions.

Korea is a global leader in implementing a broad green growth strategy.

This includes efforts to increase renewable energy sources and to reduce the

amount of emissions required for every unit of Gross Domestic Product.

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Australia is a strong supporter of Korea’s initiative in establishing the Global Green

Growth Institute.

The GGGI has the potential to make a major contribution to the global shift to a low

carbon future.

This year we will see the GGGI take on a truly international focus to support low

carbon and sustainable growth initiatives around the world.

Korea also has enviable ambitions to become one of the world’s largest green

economic nations and to expand exports of green technology.

Efforts to improve energy efficiency in manufacturing and buildings and transport

are part of these efforts, and will build a strong base for an internationally focussed

low carbon economy.

As a central part of these efforts, the Republic of Korea is taking strong action on

climate change by targeting a substantial 30 per cent reduction from business as

usual emissions by 2020.

This is comparable with Australia’s own unconditional target to reduce our

emissions to five per cent below their 2000 levels by 2020. This means we will have

to reduce our per capita emissions by nearly one-third against business-as-usual


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We are also committed to reducing emissions to 80 per cent below 2000 levels by

2050 - a commitment which will prevent over 17 billion tonnes of carbon pollution

from being emitted between now and 2050.

We welcome the steps Korea is taking towards introducing a comprehensive

emissions trading system.

International action

We've heard a lot of claims in Australia, from our political opponents, that we

are going it alone in implementing an emission trading scheme.

I know similar arguments have been made in Korea by those opposed to

emissions trading.

So let's just look at what countries around the world are doing.

By the beginning of next year, the 27 European Union members, Australia, New

Zealand, Norway, Iceland, Switzerland and Liechtenstein, the US state of

California and the Canadian province of Quebec will all be using emissions

trading as the primary vehicle to reduce greenhouse gas emissions and drive

investment in clean energy.

So already, emissions trading is up and running in many regions of the world.

And several more countries are planning to start emissions trading in the next

few years.

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I have spent the last four days in China, both in Beijing and Guangzhou, discussing

the development of pilot emissions trading schemes.

These will be established across major Chinese cities and regions with populations

totalling more than 250 million people.

I have been impressed by China’s commitment at a national, provincial and city

levels to low carbon growth and meeting their reduction targets, including through

increased use of market mechanisms.

China will be looking to scale these pilot emissions trading schemes up to a

nationwide scheme after 2015.

Elsewhere, Kazakhstan, Central Asia's biggest economy, is working on an Emissions

Trading Scheme.

In April this year, Mexico’s lower house passed a voluntary national emissions

trading scheme. The legislation is expected to pass the upper house by July 2012.

South Africa has announced a carbon tax which will start next year.

Even Dubai, in the United Arab Emirates, one of the biggest emitters in the world,

announced it is considering an Emissions Trading Scheme as part of a 2030 goal of

reducing energy use by 30 per cent.

The World Bank is also working with a number of emerging economies to establish

domestic carbon markets, including Thailand, Ukraine, Chile and Turkey.

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So countries on every continent in the world are putting a price on carbon.

What we're doing in Australia

Australia’s Parliament passed legislation last November to introduce a carbon

price into our economy from July this year.

The passage of this legislation was not without hurdles and delays.

We have been debating action on climate change in the Australian Parliament

for over two decades.

The consistent advice we receive from economic experts is that pricing carbon

is the cheapest and most effective means of reducing emissions.

And the longer we delay taking action, the higher the costs of tackling climate

change will be.

In delaying action, countries increase the risk of dangerous climate change,

lock in emissions-intensive investments in sectors like electricity generation

and defer new investments in low-emission technology, industries and jobs.

Last week at the Major Economies Forum, the International Energy Agency

warned climate change ministers that delaying action is a false economy.

For every dollar of clean energy investment deferred in the power sector in the

period to 2020, another $4.30 would have to be spent after 2020 to

compensate for the increased emissions.

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The economic imperative for action has become even clearer following the outcome

of the United Nations’ climate change conference in Durban in South Africa last


At that conference, all the countries of the world agreed to start negotiating a new

international agreement to reduce greenhouse gas emissions.

Negotiations are to conclude by 2015. The new agreement will take effect from


All countries will have new obligations to reduce emissions from 2020 - that means

we need to start taking action now to ensure our economies have time to adjust.

If a country like Australia were to wait until 2020 to start reducing emissions, we

would then have to make deep cuts immediately to achieve our obligations under

the new agreement.

Businesses would not have made the investments needed to improve energy

efficiency and reduce pollution.

Without the time and assistance to make a smooth transition, businesses would

experience a significant economic shock.

We would also miss out on the new jobs and investment opportunities that open up

as we move to a low-carbon economy.

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Globally, more money is now invested in new renewable power than in conventional

high-pollution energy generation.

These are the types of investments we don't want to miss out on.

That is why the Australian Government is acting now to put Australia’s economy on

a pathway of low carbon growth.

About Australia's Carbon price

To meet Australia’s unconditional reduction target for 2020 we will have to reduce

our annual emissions by 160 million tonnes in 2020.

The scale of this challenge requires an economy-wide response.

Australia’s Clean Energy Future Package introduces a carbon price on 60 per

cent of Australian sources of emissions.

The reform begins on 1 July this year when Australia’s 500 or so largest emitters will

be required to pay a price of $23 for every tonne of carbon dioxide equivalent they

release into the atmosphere.

This carbon price will be fixed for the first three years of the scheme.

Then from July 2015 the carbon price will be set by the market under a cap and

trade emissions trading scheme.

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We have also introduced a range of policies to complement the carbon price.

These programs will promote innovation and investment in renewable energy;

encourage energy efficiency in business and households; and create opportunities

to reduce emissions in the land sector.

Implementing economy-wide carbon pricing is the most economically efficient way

of cutting pollution in Australia.

Australian Treasury modelling shows our economy will continue growing strongly

with the carbon price in place.

Carbon pricing will drive investment in a range of industries, including cleaner

energy like natural gas, solar and wind power.

It will create incentives for low-pollution growth in our economy and generate

significant economic opportunities.

International linking

Australia’s carbon price will be linked to international carbon markets from 2015.

Costs to the Australian economy will be minimized by accessing credible, low cost

international offsets in developing countries and by linking with other carbon


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Australian emissions trading will contribute to emissions reductions in other

countries, ensuring that emissions reductions occur wherever they can be achieved

at lowest cost.

By introducing a carbon price, along with targeted support for industries and

households that need help to make the adjustment, Australia is beginning a well-planned and very carefully calibrated transition to a cleaner energy economy.

Australia-Korea climate change relationship

The relationship between Australia and the Republic of Korea on climate

change is increasingly important and progressive.

Both our countries are driving clean technology investments and adopting

economic policies to transition to low carbon energy sources.

There is enormous potential for collaboration between Australia and Korea on

all aspects of climate change policy, but particularly on the design and

implementation of emissions trading.

With Australian emissions trading being internationally linked from 2015, we

have a strong interest in the growth of broad and liquid carbon markets.

We are already exploring options for linking to existing schemes, such as the

European Union’s Emission Trading System and New Zealand’s Emissions

Trading Scheme.

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We would, of course, be open to linking with other robust and credible trading

systems that develop in coming years, including in the Republic of Korea.

I see the capacity to eventually link emissions trading schemes in the Asia-Pacific region as a very important regional economic goal.

If we can link our emissions trading schemes our carbon prices will equalise,

emissions will be reduced at least cost, and the risk of any potentially unfair

competitive disadvantage arising from carbon pricing in an individual economy

will be removed.

For international businesses there would be the advantage of managing their

carbon liability in a coherent way, and the potential for deep and liquid carbon

markets to develop.

Australia is keen to cooperate with our regional partners in pursuit of this economic

goal, as well as in pursuit of our mutual environmental objectives.

Multilateral and Regional Context

Ultimately, climate change is a problem that requires international cooperation.

And that is why Australia, like Korea, is playing an active role in international climate

change negotiations.

At the UN Climate Change Conference in Durban last year, as I mentioned earlier, all

of the world's major emitters -- including the United States and China -- committed

to negotiate a new international agreement on reducing emissions.

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These negotiations will be an opportunity for all countries to think creatively about

how we can take international efforts on climate change forward.

Korea will have an important role in driving a positive outcome at this year’s UN

Climate Change Conference as it is hosting one of the important Ministerial

meetings in the lead up to this year’s Conference.

By taking national action to implement policies that reduce emissions, countries like

Australia and Korea can demonstrate the pathway for other countries in moving

towards a new global agreement.


Australia and the Republic of Korea both accept the evidence of climate change


We are working together to shape a global solution, in both international

negotiations and through our own national policies.

We are embarked upon ambitious transformation of our economies, moving

towards more efficient low-polluting industrial processes, and deployment of

renewable energy generation.

And we are both moving towards implementation of emissions trading as a key

policy to drive this change.

This is the recipe for continued economic growth and prosperity.

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Australia and Korea are both putting in place the incentives and policies that will

speed this transition to a modernised energy base for the future of our economies.

We both need to continue domestic policy reform to reduce emissions and adapt to

a changing climate.

And we both need to work together with the rest of the world in building a global

solution to the environmental and economic challenge of climate change.