JSCOT HEARING ON THE PARIS AGREEMENT ON CLIMATE CHANGE - Opening remarks

Mr Chairman, thank you for the opportunity to meet with the Committee today.

The minerals sector welcomes the Paris agreement as an important step forward in securing a durable path to progressively lower global greenhouse gas emissions.

I would like to make three points.

First, the minerals sector supports the agreement and commends the constructive role played by successive Australian Governments in ensuring that the deal included commitments from all major emitting nations.

Second, Australia has a good record in meeting the various international commitments on emissions reductions. Unlike many other developed nations, we met our Kyoto commitments, and we are well on track to meet our 2020 commitments.

Third, the minerals sector also supports Australia’s emission reduction target range for 2030, namely a 26 to 28 per cent reduction off 2005 levels by 2030.  It is a credible and ambitious target. It is commensurate with the efforts of our peer nations.  

I do want to briefly elaborate on this point to address some of the more simplistic claims that are frequently advanced about our emissions targets.

I do so from a whole-of-economy perspective rather than simply from that of the minerals sector.

The cold hard reality is that meeting our targets will impose greater costs on the Australian economy than the cost borne by other developed nations in meeting their respective targets.  

Mr Chairman, there is a fundamentally important point to make here.

Identical targets do not mean comparable sacrifice.

No two nations are the same in economic and population growth, and no two nations are the same in terms of their economic structure and contribution to global commerce. 

A commodity exporting economy, with strong economic and population growth like Australia will always have a different emission profile and outlook than post-industrial, service economies in Europe that largely import commodities and industrial goods.

It is because we play a different role in the global economy than most other developed countries.

Our combined farm and resources exports in 2014 were worth $235 billion.

The production of these exports alone account for about 35 per cent of our emissions.

It is the reason that our per capita emissions from agriculture are 6 times the developed country average.

In other words, Australia’s emissions are higher – including on a per capita basis - because we provide energy, fibre and protein for other countries. 

Mr Chairman, it is also important to understand that under UN rules, emissions are counted against the nations where they are produced, not where the end product is consumed.

For example, the CO2 emitted in the breeding, production and processing of packaged beef is counted against Australia, not the 57 countries that import it. 

Similarly the emissions generated in the extraction and processing of copper, nickel or gold exports are counted against Australia, not the dozens of countries that import them.

A second problem is that many observers ignore the contribution of population and economic growth to emissions.

According to UN projections, Australia’s population will grow by 16 per cent (3.8 million people) between 2015 and 2030.

Over the same period, Germany’s population will fall by 4.7 per cent or 3.9 million people,

Japan’s population will fall by 8.4 million people, Russia’s by 9.3 million and Italy’s by nearly 2 million.  

And the IMF forecasts that our GDP will grow faster than all other developed nations except South Korea over the period to 2030.

These factors must be taken account of when comparing various national commitments.

Mr Chairman, that is not to say that there are no opportunities to lower Australia’s emissions.  For its part the mining industry is working hard to constrain and reduce emissions. That includes investment in low emissions coal technologies, the adoption of new energy saving measures as well as the deployment of renewable energy.  

And I highlight the adoption of new high efficiency coal plants which can produce low cost reliable energy with up to 50 per cent lower emissions.  There are already more than 1100 such generation units operating in East Asia and another 800 planned or under construction. The deployment of these plants in China has reduced its annual emissions footprint by 450 million tonnes of CO2 since 2007.

These technologies should be considered for deployment in Australia as we replace our aging power generation fleet over the next decade.

The other energy technology that should be on the table is nuclear energy.  After all, Australia hosts 30 per cent of the world’s uranium reserves and nuclear energy’s share of global demand is expected to grow from around 11 per cent today to 16 per cent by 2040.  We should not artificially limit the tools we have at our disposal to meet our commitments.

Mr Chairman, we are happy to take your questions.

28 September, 2016.

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