BCA Clean Energy Seminar
12 August 2008, Guangzhou
Acknowledgments
Madam Li Miaojuan, Director-General, Guangdong Province Development and Reform Commission; Consul-General Mr Sean Kelly; Leaders of the southern China energy sector; Members of the Australian Clean Energy Mission; Distinguished guests, ladies and gentlemen
Thank you for the opportunity to address this Clean Energy seminar today.
China is now Australia’s largest trading partner and Guangdong is Australia’s largest provincial market in China due in large part to Australia’s 25-year contract to supply LNG – an excellent source of clean energy - to the province.
Last year southern China took 20 per cent of Australia’s exports to China – equivalent to Australia’s 9th largest export market. Our trade with Guangdong is also very diverse, spanning 928 tariff lines compared to 619 lines with Shanghai, and 438 lines with Beijing.
I am delighted to lead a Clean Energy mission to Guangzhou and to participate in this seminar as it gives me an opportunity to outline to you the nature of my discussions in Beijing yesterday and to go into some detail on Australia’s response to climate change.
Building Australia’s Trade and Investment Relationship with China
Yesterday, I had two excellent meetings in Beijing. These were with Mr Zhang Ping, Chairman of the National Development Reform Commission and Mr Chen Deming, Minister for Commerce.
Chairman Zhang and I discussed in detail the importance of addressing climate change from both an environmental and an economic perspective.
Given the significance of coal to our trading relationship we discussed the need for Australia and China to work closely together on clean coal technology and other greenhouse abatement mechanisms.
At a lunch which the Prime Minister and I attended in Beijing along with major Australian energy resource company CEOs and major Chinese energy companies, there was strong agreement on the potential and need for our respective companies to cooperatively pursue clean coal technologies.
Australia and China are already doing a great deal together in this area and I will touch on that in a moment.
In my meeting with Minister Chen Deming, we agreed that we should both do all that we can to try and make further progress on the WTO Doha Round of trade talks.
To provide the global economy with a much needed confidence boost and to help address currently high food prices it is essential that we make further progress on the Round this year.
If required, this could include the possibility of another Ministerial meeting before the end of this year.
Minister Chen and I also agreed on the importance of progressing the free trade agreement (FTA) between our two countries including achieving early outcomes in areas we have identified.
There was agreement that it is now time to get down to business on the FTA to seriously engage on the matters of key importance.
We will have to deal with the traditional issues such as agriculture and will also pursue Australia’s strong interests in services including financial, education and environmental services.
In this respect I am encouraged by the offers Minister Chen signaled in Geneva on financial services.
Minister Chen and I worked very closely together in Geneva last month to try and bridge the differences between WTO members on the few remaining outstanding issues in the round.
That time spent working together in Geneva and other bilateral meetings we have held has provided a strong basis for an excellent working relationship.
A relationship in which we can jointly pursue our bilateral, regional and multilateral trade and economic objectives.
Enhanced trade and investment flows between our two countries will assist all sectors of our respective economies.
It will also assist in building our trade and investment in the clean energy technologies, particularly if we are able to progress in the WTO the initiative to reduce to zero tariffs on environmental goods and services.
Responding to Climate Change
Beijing’s Green Olympics provides an important platform from which we can build our cooperation and joint response to climate change.
Climate change is one of the greatest economic, social, and environmental challenges of our time.
Expert scientific evidence confirms that human activity is altering the climate.
This is changing rainfall patterns, reducing water availability in Australia and increasing the frequency of severe weather events such as bushfires and storms.
The Australian Government takes the challenge of climate change seriously.
The first action of the new Australian Government in December last year was to ratify the Kyoto Protocol.
Reflecting the urgency and importance of addressing climate change our policy approach is to:
- reduce greenhouse pollution in Australia in the short and long term;
- work with the international community to develop a global response that is effective and fair; and
- prepare for the climate change that we cannot avoid.
Australia’s Climate Change Action
The centrepiece of Australia’s response to climate change is the Carbon Pollution Reduction Scheme.
Under the Scheme, the Government will set a limit on how much carbon pollution industry can produce, and then sell permits up to that limit. This will enable the market to find the most efficient – and lowest cost – ways of reducing carbon.
The scheme will reform and indeed transform the Australian economy.
By introducing a price for carbon pollution, we will drive investment in low emissions products and technology and create new green industries and green jobs.
The Scheme will be complemented by other policies to stimulate green investment and innovation:
- a Mandatory Renewable Energy Target to require 20% of all electricity to be sourced from renewable sources by 2020
- a $500 million Clean Coal Fund to accelerate the use of clean coal technologies
- and landmark legislation to establish the world’s first comprehensive carbon capture and storage framework.
In addition to the environmental imperative of climate
change, I strongly believe it provides economic, trade and
employment opportunities.
Innovation and improved carbon productivity will enable us to
maintain and improve our living standards while reducing our
impact on the environment, but trade policy also has an
important role to play.
As I said at the Trade Minister’s Climate Change meeting in Bali last December, open trade policies will be critical to the diffusion of new environmentally friendly technologies, in particular to developing countries.
Demand for these technologies is growing rapidly in emerging economies like China.
So much so that the global market for renewable energy is expected to be worth US$750 billion a year by 2016.
Australia is well endowed with renewable energy sources, a strong skills base and highly innovative companies like the ones here today.
We also now have policies to encourage investment in clean technologies.
The rapidly growing overseas markets for clean energy – like that in China - offers greater scale than is possible in Australia alone and presents a major opportunity for our exporters.
Clean Energy Export Strategy
To help Australian businesses capture a share of overseas markets, the Australian Government is committed to a Clean Energy Export Strategy.
I would like to congratulate Austrade - Australia’s Trade Commission - and the Senior Trade Commissioner Allan Morrell and his team here in Guangzhou for organising this Clean Energy Seminar today and the Clean Energy delegation we have from Australia.
In addition to seminars such as this our Clean Energy Export Strategy will help clean energy firms:
- Identify export markets, including technological and consumer trends, and major projects and events – like this one today;
- Access domestic government support for the clean energy sector;
- Take advantage of overseas governments’ climate change policies and regulatory developments that may provide new market opportunities; and
- Build relationships with local businesses, government and industry groups in the clean energy sector overseas.
In addition, Austrade will:
- work with relevant bodies to establish a database of Australian capability in clean energy;
- identify opportunities in emerging markets and in major projects and events;
- disseminate information on the development of the global market for clean energy technology through peak industry bodies and regional associations; and
- ensure that individuals with expertise in Australia’s clean technology capability are involved in relevant trade promotion events and activities.
Credentials of the Clean Energy Mission
Reflecting Australia’s long standing interest and expertise in renewable energy the members of our Clean Energy Mission are drawn from a broad cross section of the industry.
Among the members of the delegation, we have world leaders in:
- wind energy technology
- ‘gas to energy’ technology
- environmental technologies for air pollution control
- promoting the sustainability of commercial buildings
- research in photovoltaics , and
- coal seam gas.
While Australia has had a long history in the development of clean energy technologies we have not done so well in commercialising that technology and that is why it is so important to pursue international partnerships to help take our technology to the rest of the world.
Clean Energy Cooperation
As I said earlier, in discussions I had with Chairman Zhang Ping and the lunch meeting the Prime Minister and I had with CEOs a key focus was the importance of addressing climate change.
Our two countries both face the major challenge of climate change, and the need to embrace clean energy and technology as the major platform for our abatement efforts.
Our two countries have a history of working together on this important issue.
We worked together at the COP13 to finalise the Bali Roadmap on an international framework for addressing climate change into the future.
During Prime Minister Rudd’s visit to Beijing in April and again last week, our Leaders committed to meeting at Ministerial level on an annual basis to strengthen our cooperation on climate change. That meeting is expected to take place later this year.
Our two countries will elevate considerably the intensity of our technical, scientific and commercial cooperation in the area of clean coal technology.
The Australian Government is investing A$20 million in an Australia-China Joint Coordination Group on Clean Coal Technology, drawn from our Clean Coal Fund.
In addition, we have entered into an Australia-China Climate Change Partnership and an Australia China Environment Development Program as part of the new, strengthened efforts to work with China to address climate change.
- Together, we are conducting a feasibility study into the development of the largest solar city in the world at Weihai in northeast China.
- Together we will create a global ‘showcase’ of solar technologies.
- Together we are exploring a pilot project applying Australia’s National Carbon Accounting System at a provincial level in China.
- Together we are trialling the Australian river health monitoring systems in the Yellow river, in the Pearl River Basin and in the Da Ling River.
In addition to the positive policy signals received here from the Chinese Government on the need for cooperation to address the challenges of climate change, I’d also like to take this opportunity to note Chinese Commerce Minister Chen’s welcome signals on environmental services given at the recent WTO services ministerial signalling conference in Geneva.
In particular I valued his reference to an improved future offer on cleaning services of exhaust gases, which includes emission monitoring and pollution control services related to the burning of fossil fuels.
This is an area where Australia’s dynamic environmental services exporters have specialised expertise.
An offer on environmental services is good for the environment, good for services trade and good for China. And I was delighted to see China’s commitment to this important issue.
Conclusion
We’re here because all of us understand the necessity of reducing carbon pollution if we are to make inroads into addressing climate change.
Australia is one of the world’s largest exporters of coal and China is the world’s largest consumer of coal.
It is therefore vital that we work together on the development of clean coal technologies given the importance of coal to our economic well being and energy needs.
We also need to look at alternative energy sources.
China is investing heavily in clean energy and leads in some important fields.
Australia also has leading and innovative clean energy solutions - solar; hot rock, wave, clean coal, sequestration.
Responding to the environmental imperative of climate change does come with a cost, but the economic costs of not dealing with it will be far greater.
And in responding to climate change, we also create economic opportunities – which I believe Australia and China are well positioned to take advantage of.
Thank you again for the opportunity to speak to you today and I look forward to hearing of the outcomes from this seminar.
Thank you.