8-9 December 2007, Bali, Indonesia
Address by the Minister for Trade
Trade Minister's Statement to the Trade Ministers' Dialogue on Climate Change Issues
I would like to congratulate you Madam Chair and the Indonesian Government on your initiative to host a Trade Ministers’ meeting in the lead up to the UN Climate Change Convention.
Apart from the environmental imperative that drives the importance of addressing climate change – and one of the very first acts of the new Australian Government was to ratify the Kyoto Protocol – it is my long held view that there are significant economic, trade and employment opportunities arising from the global response to climate change.
Any measures to address climate change must be consistent with open trade policies.
Relationship between trade and climate change policies
Trade policy has an important role to play in addressing and providing solutions to climate change, although it is only one of the policy tools available.
The UN Framework Convention on Climate Change , the Kyoto Protocol and the WTO Agreements each recognise that trade and environment policies need to be mutually supportive in order to achieve our goal of sustainable development.
The need to constrain carbon is driving innovation in energy technology that presents important opportunities for economic growth and employment, as well as addressing the environmental imperatives of climate change. Setting a carbon price will drive investments in low emissions products and technology such as renewables and clean coal.
It is important that we develop an efficient market based trading regime involving all parties that rewards energy efficiency and climate friendly technology.
It is very clear that open trade policies are critical to the diffusion of new technology, in particular to developing countries.
Certainly the WTO could do more …
It can do much more to reduce spending on trade distorting subsidies, including in agriculture, which create inefficiencies leading to higher greenhouse gas emissions. It can do more to ensure that the disciplines governing this type of support are effective in ensuring spending does not stimulate production. The WTO can also do more to ease the barriers to trade in environmental goods and services.
Australia is an active participant in the WTO negotiations to reduce such barriers.
It is important that any Doha round outcome makes real progress in this area.
So we welcome the recent US-EU proposal to accelerate liberalisation of trade in environmental goods and services in the WTO. We are seriously examining the proposal and look forward to further detailed discussions in Geneva.
The technology that will drive a cleaner energy future for the planet also requires our governments to create business environments that support investment in climate friendly technologies.
That is, business environments that are open, stable and which provide the physical infrastructure, the human resources and the legal protections that attract investment.
Harnessing markets is a key to addressing climate change. To reach its goal of reducing emissions by 60 percent of 2000 levels by 2050, Australia will be introducing an emissions trading scheme.
Market-based emissions trading systems hold the potential to deliver a flexible, low cost mechanism for achieving emissions reductions.
The trade rules of the WTO provide the international framework for the design of climate change measures that are not only environmentally effective but also consistent with the global commitment, embodied in the WTO Agreements, to build sustainable development through greater openness of global markets.
In short, under the umbrella of the WTO Agreements, the UNFCCC and the Kyoto Protocol, the international community has the means available to address climate change in a manner that is pragmatic, cost-effective, science-based and which leaves scope for countries to implement measures in ways that reflect their particular national circumstances.
It is also important to remind ourselves that these international agreements are based on hard-won consensus.
That should continue to be the guiding principle in considering appropriate policy tools.
No one country, or group of countries, is in a position to dictate to others what policy instruments best suit their needs, absent international consensus.
We hear some talk about using trade measures such as carbon taxes on imports, or border tax adjustment to use the jargon, to impose penalties on imports that are deemed to have been produced without incorporating a cost of carbon. As trade ministers we should be quite concerned about such systemic threats to the international trading system.
The system has been built over many decades of negotiations and has served the world well, especially over the past decade which has recorded historically high levels of global economic development and rapid declines in poverty levels, particularly here in our immediate region.
We now need to see international negotiations succeed in building a more robust regime for avoiding dangerous climate change. But we should do this at the same time as promoting open trade policies in support of sustainable development.
We acknowledge the competitiveness issues that arise from a differentiated response to climate change. The most important way to address these issues is to ensure that all major emitters are involved in emissions reduction efforts. And there are also effective domestic policy instruments that are less open to abuse than unilateral instruments of trade policy.
Future discussions
As trade ministers we have an important contribution to make to international discussions on climate change
In particular, we have a central role in lowering the cost of climate friendly goods and technology by removing tariffs and other barriers. And providing the environment that will foster investment in innovative technology.
We should continue to work hard in the WTO to achieve these results. And a successful conclusion to the Doha round will be an extremely important part of this.
We should continue to come together informally from time to time as we have done today, to discuss these issues – we will have an opportunity at the OECD next year for example to focus attention again on the contribution trade policy can make to addressing climate change.
We should use these opportunities to make sure that that the global trade and climate change mechanisms that the international community is negotiating provide us with an environmentally sustainable framework for global prosperity, continued economic growth, further poverty alleviation and an effective and efficient response to the threats posed by climate change.
Madam Chair, I look forward to working with you today and tomorrow in preparing your report to be presented to the 13th Conference of the Parties.
Again, I congratulate you on your Government’s initiative in holding this meeting and to say once more that Australia is delighted to receive such a warm and friendly welcome by the international community at this Bali climate change meeting.
Media contact: Mr Crean's Office (David Garner) Departmental (02) 6261 1555