The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

11 December 2007

NO.001

Climate Change Speech to the
Finance Minister's Meeting

Bali

11 December 2007

Thank you Minister.

I would like to start by congratulating Indonesia for bringing together Finance Ministers to discuss what could be the single most important challenge the global community faces.

This meeting springs from the recognition that climate change is more than an environmental challenge – it's an important and pressing economic challenge as well.

The science is overwhelming – climate change, if left unaddressed, will profoundly affect our physical environment, bringing with it potentially dire economic consequences.

This is why the engagement of Ministers responsible for national economies is so critical.

We all know the magnitude of the challenge.

That's why policy responses to climate change will need to be well designed – and appreciative of the complexities and interdependencies between the environment and the economy.

The Case for Collective Action

Climate change also serves as another reminder of the highly interdependent nature of our societies and our economies.

Responding to climate change is likely to test our existing mechanisms for international cooperation in ways they have rarely been tested.

Individually and collectively, our performance as Finance Ministers will be judged in part on our ability to build a future that locks in sustained economic growth and lower emissions.

I am delighted that the timing of this Conference makes this the first international meeting I address in my capacity as the Australian Treasurer.

Our new Government is charged with meeting some big challenges, like building a modern economy for the future, and combating climate change.

My message to you today is that the new Australian Government will not shirk these challenges.

That is why we moved so swiftly to ratify the Kyoto Protocol.

It is why we aim to reduce Australian emissions by 60 per cent by 2050.

And it is why we have committed ourselves to the introduction of a broad-based emissions trading system by 2010.

We will also introduce a 20 per cent Renewable Energy Target for Australia to reach by 2020 – which will more than double the current share of electricity generated from renewables across the country.

We will also actively encourage the research and development of new clean energy technologies, through a number of important domestic initiatives including:

  • a $500 million Renewable Energy Fund – to further develop, commercialise and deploy renewable energy in Australia; and
  • a $500 million Clean Coal Fund to fund the deployment of clean coal technologies.

The new Australian Government has also announced we will establish a Clean Business Fund to assist Australian firms in improving the energy efficiency of their operations and to promote the development of technologies that will save energy and water.

Through these measures and more, the Australian Government will be an active participant in global efforts to lock in a lower carbon emissions future.

Cutting Emissions

Having spoken briefly about the measures the new Rudd Government will implement, I also want to stress the need for collaborative effort.

All nations – developed and developing alike – need to do their bit.

Countries committed to tackling the climate change challenge will find, in Australia, a partner ready to embrace its responsibilities.

I know developed nations like Australia need to lend a helping hand and provide leadership.

Because, as a global community, we stand at a critical juncture.

The detailed analysis of the Stern report highlighted the urgent need to address climate change. The latest evidence from the IPCC suggests that global warming is happening at an even faster rate than previously suspected.

Part of the global challenge – and the key to a solution – is finding the means by which all countries contribute to reducing greenhouse gas emissions in ways that are compatible with their legitimate aspirations for growth.

Ways that recognise their different levels of economic development.

As Finance Ministers we understand the important role that market-based mechanisms must play if reducing greenhouse gas emissions is to be achieved at least cost to our economies.

The price signals provided by such mechanisms are critical in promoting the development and deployment of low-emission technologies.

Ultimately, Australia believes that, in conjunction with a fair and effective global agreement on controlling emissions, there are considerable advantages for all countries in moving towards pricing carbon through market-based mechanisms such as emissions trading.

For example, by establishing and linking emissions trading schemes, developed countries can purchase low-cost abatement opportunities in developing countries.

Equally, developing countries, in selling their abatement, access an important source of capital flows. These flows can assist in promoting strong economic growth and investment in a low-emission future.

The governments of developed countries have an important role in facilitating the economic transformations developing nations need to reduce their emissions over the longer term.

One important way they do this is with financing opportunities such as the Clean Development Mechanism established under the Kyoto Protocol, and the Global Environment Facility. These mechanisms demonstrate that carbon markets and multilateral donor funding can contribute to climate change mitigation in developing countries.

With Kyoto ratification, Australia very much looks forward to full participation in the Clean Development Mechanism.

Recognising the valuable role it has played to date, we would wish to see it continue as a vital and ongoing element of a post-2012 framework.

And we want to explore with others the ways in which it can be strengthened and made more accessible while maintaining a focus on additionality.

Over time, the wider use of zero-and low-emissions technologies is an important way of breaking the existing link between economic growth and growth in emissions.

The private sector will continue to play a pivotal role in the development and diffusion of new technologies.

But the governments of developed countries have a role to play in helping overcome barriers to technological development by creating a suitable enabling environment for energy investment, the deployment of new technologies, and international collaboration.

And as a developed country, it's vital we engage with developing countries to find solutions to cleaner energy and land use.

That's why Australia has committed funding under the Global Initiative on Forests and Climate.

Under this initiative we are currently progressing projects with Indonesia as well as making a $US10 million contribution to the World Bank's Forest Carbon Partnerships Facility.

We believe that a post-2012 agreement must include land use for both developed and developing countries as part of a comprehensive approach to mitigating greenhouse gas emissions.

And we will continue to work with the Asia Pacific Partnership on Clean Development and Climate – including China and India – and as part of the Joint Coordination Group on Clean Coal Technologies with China.

We will also continue to engage in international technology partnerships as well as our bilateral climate change partnerships.

International financial institutions are clearly playing an important role in assisting developing countries in capacity building, including by providing technical assistance in areas such as emissions measurement and carbon accounting.

Adapting to Climate Change

Friends, the Australian Government also recognises that the climate change challenge is not just about mitigation.

We must adapt to those consequences of climate change that due to past inaction we are no longer able to avoid.

Rising sea levels, extreme weather events, natural disasters and collapsing ecosystems are already causing grave concern in some parts of the world.

We must further our understanding of the adaptation challenges – at the global, regional, and individual country level.

The impacts of climate change will vary markedly across different regions. We need to build our information base to understand the risks and vulnerabilities our economies face, and to better inform our policy strategies.

Australia will certainly not be immune – indeed, many commentators associate the current record drought and recent extreme weather events in Australia with climate change.

But the outlook for other countries appears even more dire.

We know that developing countries will be particularly at risk from the impacts of climate change.

Regions including our immediate neighbours in the South Pacific, Africa, and the Asian and African mega deltas are likely to be particularly affected.

It is one of the tragedies of the global nature of the climate change problem that the burden of climate change will fall predominantly on the poor.

Developed countries must act to assist developing countries in the challenges of adapting to climate change.

We need to ensure our development institutions – at a domestic and an international level – are appropriately resourced and flexible enough to meet these new challenges.

In ratifying the Kyoto Protocol, we will seek to support a decision which operationalises the Protocol's Adaptation Fund.

Closer to home, Australia will assist countries in its region struggling to adapt to the consequences of climate change.

For example, the Australian Government intends to commit $150 million to assist our South Pacific neighbours prepare for and adapt to climate change.

We will also explore ways of making the climate change adaptation task an integral part of our international development activities.

Closing Remarks

Friends, climate change represents one of the great economic challenges of our time.

We will be judged by future generations on how we meet this challenge.

The new Australian Government wants to work with you, the global community, to find a global solution that works for all.

We stand ready to meet our responsibilities in full.

We will take the steps needed to address climate change comprehensively – not just the easy or soft options, but the necessary ones.

We will ensure that Australia assumes the proactive role that the global community rightly expects from developed economies.

The instruments with which to confront climate change are available.

The moral obligation to confront climate change is clear.

We must take decisive action now. There is really no choice.

I'm confident that together our nations have the collective imagination to modernise our economies, to meet the challenges of climate change.

Thank you.