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Government inaction on its own CFC phase-out



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FRED CHANEY MP MEDIA RELEASE Member for Pearce Shadow Minister for the Environment COMMONWEALTH |

PARLIAMENTARY L IB R A R Y I MiCAH 1

GOVERNMENT INACTION ON ITS OWN CFC PHASE-OUT 10/92

The Commonwealth Government was in no position to lecture private industry about the need to plan CFC phase-outs if it took no action itself to prepare a detailed and costed strategy for such action, the Shadow Minister for the Environment, Fred Chaney, said today.

Speaking at the "Ozone Protection for the 90s" conference in Canberra, Mr Chaney referred to criticism by the Minister for the Environment, about the state of preparation for CFC phase-outs by some sections of industry.

He said it appeared the Commonwealth had no detailed plan of its own.

"The Commonwealth, through property holdings, transport fleets and the daily activities of it and its agencies is the biggest single user of CFCs in the country," he said.

"It is impossible to get figures on the extent of use because it appears no overall inventory has been drawn up. If you don't know what you've got it's obvious you're in no position to know the cost of meeting the phase outs.

"This cost will be massive. One rough guess I've been given - and we're reduced to this sort of estimating on this issue - is that Commonwealth holdings of CFCs may total as much as 10,000 tonnes and if total destruction was sought it would run to something in

the order of $100 million, let alone the cost of replacement equipment.

"If a master plan and accurate costing really does exist the Commonwealth has an obligation to make it public without delay. It is intolerable for the Commonwealth to lecture the private sector on the need to plan compliance with its legislation if it

cannot produce evidence that it is living up to its rhetoric in its own backyard.

"If, as I suspect, no such detailed planning has been done the Government must initiate it without delay.

"I give this conference an assurance that if this work is not complete when the Hewson-Fischer government is elected in about 12 months time it will receive top priority and will be published as a guide and example to other users.

"It is all very well for the Government to exhort action from others. In this as in so many other areas, it is time for some real leadership."

CANBERRA Contact! Keith Kessell 06 277 4760

25 March 1992

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"THE OPPOSITION PERSPECTIVE"

an address by

HON FRED CHANEY MP

SHADOW MINISTER FOR THE ENVIRONMENT

to the

Ozone Protection for the 90s Conference

25 March 1992

Canberra

As a politician appearing at a conference with very much a technical focus it is not my intention to attempt to enter the field of very detailed analysis which will, necessarily, dominate most of your proceedings.

But I do welcome the opportunity of addressing some of the broader considerations that policy makers need to take into account when considering their response to this very high profile environmental issue.

And it is important to establish clearly that this is not a partisan political issue. A change of Government in Australia won't change the obligations we have undertaken both internationally and nationally to deal with this issue.

There is no doubt that, along with the greenhouse effect, ozone depletion is the most well known environmental issue, not just here but, I suspect, all over the world.

I say well known because I'm sure that both these matters are not necessarily fully understood by a lot of people and indeed there is much confusion between the two.

But the fact remains that in the homes and schools of Australia both issues are much discussed.

This in turn increases the pressure on those involved in relevant industry sectors, and people in my line of work, to come up with sensible and responsible responses to the community concerns.

I want to begin by looking at some of the lessons that have been learnt from the way in which we've gone about responding to the ozone depletion issue and to conclude with some reference to Government performance or lack of performance, a matter which I think has been given even greater relevance by some of Mrs Kelly's comments

here yesterday.

The development of the issue to the point where governments and industry worldwide are combining to restrict and replace substances that have proved so efficient and important in helping provide some of modern society's most essential services sets a pattern that is likely to be repeated in our increasingly environmentally conscious

world.

Sparked by scientific discovery, the ensuing debate has been marked by a fair level of scientific controversy but, most importantly, a major increase in the research effort directed at establishing the facts.

As a policy maker with prospects of becoming a public policy decision maker within the next 12 months I cannot emphasise too greatly the need for the best possible fact base.

Many of the decisions with respect to ozone depletion have had to be made with less than perfect certainty about cause and effect.

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I endorse the remarks of my predecessor in this job, the then Senator Chris Puplick, who during the debate three years ago on the original ozone protection legislation drew attention to reports a few days apart which presented quite contrary scenarios with respect to possible consequences, and who referred to the "dilemma of sorting

out responses to conflicting scientific claims".

Notwithstanding the overwhelming weight of scientific opinion in support of the ozone depleting properties of substances such as chlorofluorocarbons (CFCs), some sceptics remain unconvinced.

One such is Professor S. Fred Singer of the University of Virginia, a relatively recent visitor to Australia who claims that the scientific jury is still out and that the existing state of knowledge does not justify what he calls "extreme" controls on CFCs.

I accept that in coming to these decisions we often are required to adopt what is analogous to the level of proof required in civil legal proceedings, that something is established on the balance of probabilities rather than that required in criminal prosecutions, beyond reasonable doubt.

But no decision making process, be it the justice system or assessing scientific claims, is perfect. With respect to CFCs the die is well and truly cast.

All over the world, the pressure for faster phase-out is building. Within the last month, following NASA's satellite assessment of ozone loss in the northern hemisphere, President Bush has announced an accelerated phase-out for CFCs, as have Britain and other EEC countries.

Cynics might say there's nothing like an ozone hole over your own patch during an election year to focus the political mind. Long-time anti-CFC campaigner Senator A1 Gore, speaking after the Senate had voted 96-0 to bring forward phase outs, summed it up in this way:

"Now that there's the prospect of a hole over Kennebunkport, perhaps Bush will comply with the law."

In a sense, this flurry of northern hemisphere activity merely brings that part of the world into line with decisions already taken here, and particularly with the Opposition's long-established position.

This is, in fact, an area in which we have been out ahead of the Government.

Many of you here today would probably know that we had, and still have, a policy commitment to phase-out CFCs by 1995, except for medical and pharmacological uses. That position, adopted prior to the 1990 election, is now being approached both here and overseas.

As Mrs Kelly mentioned yesterday, there is currently legislation before the Federal Parliament to enable Australia to ratify the changes to the Protocol agreed at the

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1990 meeting which add eleven more substances to the list of those covered by the Ozone Protection Act of 1989. The legislation also seeks to give the Minister more flexibility in responding to future amendments to the Protocol by allowing her to do by regulation that which at the moment requires legislative change.

The Opposition is yet to consider the legislation in a formal sense and I have asked for more information about the latter point, particularly in terms of what safeguards their would exist against what I might describe as mischievous or politically-directed action by a Minister. We also have a general disinclination towards the use of

regulatory power to enact substantive changes to legal obligations even when, as in this case, such regulations are subject to disallowance by Parliament.

Subject to these reservations being satisfied, and the consideration of any comment industry may wish to make, I would expect the Liberal and National Parties to support the legislation.

I should say in passing that the Bill now before us is a good example of how involved and cumbersome can be the process of making changes to black letter law. The legislation we are about to consider runs to 51 pages, just 12 short of the original Act.

Another notable feature of the ozone depletion issue has been what I might describe as the multi-layered response it has both required and produced.

Flowing from the 1987 Montreal Protocol we've seen national and State legislation, a high level of industry-government co-operation, about which I will have more to say shortly, and responses by individuals.

The latter have been very important. Consumer pressure has been a major factor in influencing business reaction. The aversion to CFC use in aerosol sprays produced an extremely rapid conversion of these products and a major promotional and educational exercise by that industry sector to highlight its environmental responsibility.

Almost two years ago I was pleased to launch a schools booklet entitled "Sharing the Air" which, while financed by the Aerosol Association of Australia, was prepared independently of that industry group by educational specialists and drew on top level scientific advice from the CSIRO. That initiative was an excellent example of a

sensible and responsible industry reaction to a major new issue confronting its future.

In mentioning as I have just done the legislative response at Federal and State level I am certainly aware of problems created by the rush of the States to get involved. As Chris Puplick remarked during the late 1988 debate on the Federal legislation, the States had "sought to rush in firstest and bestest, as they say, with legislation which goes further, faster and with more bells and whistles on it than anybody else, in order to regulate production, manufacture and distribution of CFCs".

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There certainly are lessons to be learnt from that experience. The tendency of the States to individually legislate on the detail did give rise to problems, particularly Tasmania's approach of an all-embracing ban that then required specific exclusions.

I raise this not by way of being wise in retrospect but to assure you that as Minister I would be very conscious of the need to improve liaison between the Commonwealth and the States on this and other issues of a similar nature that may arise.

There is no doubt that the government-industry co-operation in responding to the urgency of the situation has been exceptional and I commend those involved from both sides who have negotiated and implemented action.

I noticed that in her second reading speech on the ozone protection amendment legislation, Mrs Kelly referred to the fact that while some industries, such as aerosol producers had taken a "very responsible" attitude, others had workable strategies in place or being developed it was unfortunate that, she claimed, "one or two sectors remain relatively unmoved".

Presumably she was referring to users rather than producers of ozone depleting substances.

It is reasonable to differentiate between the two.

There is no doubt that after some initial resistance or scepticism, major producers have moved rapidly to bring an end to CFC and halon production and to develop substitute products. The Du Pont company has been at the forefront of that move

with an investment in CFC alternatives it estimates of more than $US1 billion by the end of the century.

There are those like Fred Singer who have little doubt what lies behind such enthusiastic embrace of more rapid action. In an article published in 1989 he said:

"Dropping their earlier opposition, the industry rolled over and played dead, finally joining the environmental activists. It may have dawned on businessmen that with demand rising and supply limited or even declining, prices and profits could grow nicely. Those with safe

substitutes might even gain market share and keep out competitors."

Motive aside, it is clear the change is on in a very big way in manufacturing.

The main point of my remarks here today is directed toward the user end of the market, those who rely on refrigeration and air conditioning in areas such as food processing and retailing, building and motor vehicle climate control and who are now facing the cost of conversion.

That cost is, unquestionably, substantial.

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As the deadlines approach and these bills have to be paid it is a timely reminder that environmentally-responsible actions often come at a price.

I have been unable to obtain even any broad estimates of the total cost in Australia of adopting or replacing equipment.

I am aware of suggestions that CFC phase-out from commercial refrigeration in the retail food sector alone will cost hundreds of millions of dollars if completed by the end of 1997 and a lot more should that deadline be tightened to 1995. Indeed I understand that an Australian Supermarket Institute report to be released and

discussed later today puts the cost of a 1995 total CFC phase-out at a figure in excess of $2 billion. This does not take into account air conditioning changeover costs or the use of refrigeration in places such as offices, hotels, cold stores or motor vehicles.

I appreciate concern about the prospect of Australian users being squeezed out as other countries bring forward their deadlines. When one considers that key components of commercial refrigeration are imported, both in terms of equipment

and refrigerants, and the competition there will inevitably be for dwindling supplies of phased-out substances and their replacements now being developed, one can understand how tough the competition for supply could be. I am, therefore, a bit

surprised at the Minister's off-hand dismissal of these concerns when she spoke here yesterday.

The relatively small size of the Australian market - 1 have seen an estimate that the retail food sector here has a CFC bank of 1,700 tonnes while in the United Kingdom there are about 22,000 tonnes used in domestic refrigerators - hardly guarantees

industry in this country a place at the head of the queue.

I am certainly not suggesting that a Hewson government would reconsider the phase­ out deadlines. As I have said, we have a shorter time frame than that currently in place.

But I do give this conference an undertaking that as Minister responsible for this Act I would display reasonable flexibility if it could be shown, for instance, that supplies of replacement substances were genuinely limited. The application of the Act would have to be tempered by the reality of the supply situation.

Finally, let me turn to the role and performance of government in managing and leading by example as we enter the critical period of the phase-out.

I referred earlier to Mrs Kelly's admonition to some, unnamed, industry sectors who, in her view, have been tardy in developing strategies.

She said also, in her speech on the ozone amendment legislation:

"It is imperative that all users of ozone depletion substances complete their planning for a changeover to transitional substances or ozone benign technologies. One thing is certain, the phase out of ozone

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depleting substances will proceed. It is inevitable that those who do not plan ahead will face higher costs as the phase-out dates become closer."

Tough, direct and sensible words with which one would have little quarrel.

Yesterday, of course, she became a lot more specific with her attack on the Supermarket Institute.

The Minister runs the risk of falling into a very old trap.

It is perfectly legitimate to exhort others to action but it is much less credible if you have less than a perfect record in your own backyard.

Unless the Government has itself prepared a detailed and costed strategy for phase­ out it is in no position to lecture private industry.

In the development and environment section of John Hewson's Fightback! document the Coalition is committed to playing a leadership role so that it is able to urge the rest of the community to do as we do rather than do as we say.

As far as I can ascertain, the latter is very much the case as far as the Commonwealth is concerned with respect to CFC phase-outs in its own operations.

I am aware that plans within the Federal bureaucracy for handling the phase out of halons are well advanced with proposals for a national storage facility and discussions about destruction technologies.

No such stage has apparently been reached with respect to CFCs.

The Commonwealth, through property holdings, transport fleets and the daily activities of it and its agencies is probably the biggest single user of CFCs in the country.

It is impossible to get figures on the extent of that use because it appears no overall inventory has been drawn up.

If you don't know what you've got it's obvious you're in no position to know the cost of meeting the phase outs.

This cost will be massive. One rough guess I've been given - and we're reduced to this sort of estimating on this issue - is that Commonwealth holdings of CFCs may total as much as 10,000 tonnes and if total destruction was sought it would run to something in the order of $100 million, let alone the cost of replacement equipment.

If a master plan and accurate costing really does exist the Commonwealth has an obligation to make it public without delay.

It is intolerable for the Commonwealth to lecture the private sector on the need to plan compliance with its legislation if it cannot produce evidence that it is living up to its rhetoric in its own backyard.

If, as I suspect, no such detailed planning has been done the Government must initiate it without delay.

I give this conference an assurance that if this work is not complete when the Hewson-Fischer government is elected in about 12 months time it will receive top priority and will be published as a guide and example to other users.

It is all very well for the Government to exhort action from others.

In this as in so many other areas, it is time for some real leadership.

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