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Goff: OECD Forum on Climate Change - Paris

Hon Phil Goff
Minister of Trade

3 June 2008

Speech Notes

OECD Forum on Climate Change - Paris

It is in the nature of politics, that short term needs are put ahead of long term benefits, particularly when the costs of change come before the benefits it achieves.

It is also a factor of politics that while the benefits of dealing with climate change extend across the whole of society, it is more difficult to mobilize and organise populations to achieve change than it is for vested interests to organise to prevent it.

Well organised and funded emitters have been able more readily to apply pressure on the system to protect their interests.

In the developing world, immediate needs such as food, shelter and jobs have taken precedence over considerations such as environmental sustainability.

In the developed world, shareholders and employees have thought more about protecting their income and livelihoods than about the costs that their enterprises may have been imposing on the environment.

In these circumstances, it has been easy to challenge the science, particularly when there was not unanimity, than to accept the fact of climate change and therefore to have to meet the costs of tackling it.

Because the problem was global, it has also been too easy for countries to argue that they should not take action ahead of others and that it was futile for them to act and meet the costs of so doing if others weren’t doing likewise.

Sadly that is still a consideration in the discussion taking place in international forums.

The United States and China between them probably produce half the world’s emissions in absolute terms. Both will be reluctant to take the necessary actions unless convinced that the other, and the rest of the world are doing likewise.

Fortunately, things are changing. Public and political awareness of climate change has grown to the point where global action against it is now starting to occur.

This has been backed by sound science and rigorous analysis that has isolated climate change sceptics as a clear minority.

Last year’s Intergovernmental Panel on Climate Change in its Fourth Assessment Report confirmed the increasing pace of climate change, the immediacy of the need to respond and the solutions which need to be put in place.

Most importantly, it and the Stern Review have helped demonstrate that what is required to address climate change is achievable and affordable. Inaction costs more than action.

Years of efforts by scientists, NGOs and others, and successful communication efforts such as Gore’s ‘An Inconvenient Truth’ have created public awareness and pressure for change that have taken environmental issues from fringe politics to the mainstream.

The result was last December’s United Nations Climate Change Conference and the Bali Road Map.

This moved those outside of the Kyoto Protocol to accept the need for everyone to contribute to lowering carbon emissions. That acceptance however needs to be translated into actions so that the developed world helps with finance, adaptation and technology transfer while large countries in the developing world accept that they must then take steps to meet their commitments.

The OECD has an important contribution to make in this debate. Its analytical capacity lends crucial support to our understanding of the economics of climate change and to rational, evidence based policy development. It has effective channels for sharing its analysis and policy recommendations, including with major developing countries. And as a forum for engagement and open dialogue rather than negotiation, it has greater freedom to explore issues.

Other organisations need to be involved in the debates and in building the commitment to taking necessary action. In my region for example, both the APEC Leaders’ Meeting and the East Asia Summit have climate change and response to it as major agenda items.

Finally, a perspective from New Zealand.

As an economy based on the primary sector, we are both particularly vulnerable to climate change and we have a unique greenhouse gas profile.

Half of our emissions come from our agricultural sector and comprise methane and nitrous oxide instead of carbon dioxide. Our scientists, working with international partners, are striving to find effective mitigation solutions.

Although New Zealand represents only 0.2 per cent of global emissions, as a developed country we are committed to playing our part in implementing global solutions. Indeed, we have set ourselves a challenging goal by aspiring to be the world’s first carbon neutral country.

One of the cornerstones of our response is an Emissions Trading Scheme, currently before our Parliament. The proposed scheme covers all sectors of the economy and all greenhouse gases, including those associated with agriculture. We anticipate that the Scheme will be fully phased in by 2013 and will be linked to the international market for Kyoto Protocol Units.

The political challenges in introducing this Scheme are as expected. Most are supportive of its introduction, but big emitters do not always agree on elements of its design as it affects them. And in an election year, some politicians will pretend that too much is being asked of the enterprise and that there is some easier but undefined solution.

What is important is that New Zealanders can be confident that the scheme is fair, will be effective and will not simply transfer emissions-intensive enterprises through carbon leakage to other countries which lack similar controls.

To manage this risk, the proposed Scheme provides for free allocation of emission credts during a transition period for sectors particularly exposed to international competition. The Scheme is therefore designed to avoid a loss of economic capacity while still providing a strong incentive to reduce emissions.

A range of other complementary policies and initiatives are also being put in place to help New Zealanders respond to a price signal for carbon and reduce emissions. These are focused on sustainable alternative energy (New Zealand already has 70 per cent renewable electricity generation), energy efficiency and conservation, afforestation and major investment in research and development to help address agricultural emissions.

The government is also leading the way by pledging that six core public service agencies will be carbon neutral by 2012 and 28 others will be well on their way to carbon neutrality by the same date.

Realising the long-term vision of a low-carbon economy won’t be easy and will mean some difficult decisions will have to be made in the short-term. But the dramatic shifts in public opinion and demonstration of political leadership on climate change in recent years are testament to the international commitment to finding a solution.

World Environment Day

In concluding, could I mention that New Zealand is host of World Environment Day 2008, an initiative of the United Nations Environment Programme.

At the end of this session, we are hosting a reception to mark the day in the restaurant on the ground floor. All of you are most welcome to join us there.


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