Hon David Parker
Minister responsible for Climate Change issues

18 August 2008

Speech notes

Tackling climate change downunder

Address at the opening of the 4th Australia and New Zealand Climate Change and Business Conference
5.45pm, 18 August 2008
Sky City Auckland Convention Centre, Auckland

I would first like to welcome you all here to Auckland for the 4th Australia and New Zealand Climate Change and Business Conference. I wish to offer a particularly warm welcome to our counterparts who have made the trip over from Australia and further afield. We are pleased to have you here in New Zealand.

New Zealand is proud to be hosting this event. It is occurring at a particularly important time in the climate change arena in Australasia. The debate around climate change has well and truly moved on from whether it is happening to what we should do about it. We are focusing on initiatives that will have an impact on reducing emissions.

We know this is a huge challenge. Every nation is grappling with it in some way: whether it is how to meet their obligations under the Kyoto Protocol; involvement in discussions about the post-2012 agreement or preparing to face the impacts of climate change on their country and their people. We know all emitting nations must act to address climate change if we are to have any chance of reversing the path our world is on.

The Australian Government’s ratification of the Kyoto Protocol last year was an important milestone. It provided greater opportunity for our countries to work together and to learn from each other, as we look for ways to bring about the changes needed.

Both of our countries are moving to establish emissions trading schemes. This will be a cornerstone of our responses to climate change. It will see the cost of greenhouse gas emissions reflected in our economies, into all investment decisions. Increases in emissions cost. Lower emissions are rewarded. To be efficient an emissions trading scheme must create a marginal cost for increases in emissions and a marginal benefit for decreases. Both our schemes do this.

I think it is fair to say that both governments recognise that there is no easy time to introduce pricing for greenhouse gas emissions. It is therefore gratifying that both nations are looking to do this in a similar timeframe, given our close economic ties. If anything, we are both a little late. From January the 1st this year our countries have already faced a marginal cost for increases in emissions under the Kyoto Protocol, yet our businesses do not yet see the same economic signal. The sooner this is remedied, the less it will cost our respective economies to reduce emissions. It will also assist our countries to unleash the business opportunities that lie in low emission technologies.

It makes sound business sense for organisations to be preparing for the introduction of emissions trading. Organisations that will be a point of obligation under the scheme will be looking both at how to minimise emissions and how to go about buying the required credits to meet obligations. For organisations outside the scheme, addressing the likely flow-on costs will be important in minimising the economic impact on business. Options to minimise costs include, for example, through energy efficiency initiatives, reviewing vehicle fleets and encouraging change in staff behaviour.

New Zealand’s proposed emissions trading scheme is only one part of a broader package designed to address climate change on a number of fronts. Initiatives have been implemented to encourage new renewable electricity generation. There are already very substantial investments in renewables underway, especially wind and geothermal.

Like other countries, New Zealand has advantages and disadvantages arising from our emissions profile. For us, reducing agricultural emissions is not as easy as our transition towards more renewable electricity. Already about two-thirds of our electricity comes from renewables and we have a target of reaching 90 percent by 2025. We recognise that not all renewables have the same environmental impact. It’s similar with biofuels. Some are better than others. We have introduced sustainability criteria for both biofuels and for electricity. We expect most of our additional electricity to come from geothermal and wind, with some hydro. Our proposed restriction on more coal or gas-fired baseload generation will prevent renewables being crowded out by more fossil fuel generation. The Opposition disagrees with this stance, but lifting renewables from 65 percent to 90 percent is little different to other countries lifting renewables to 25 percent from a low base.

Investments are being made in developing and implementing new technologies, such as second generation biofuels and new renewable electricity options like marine and deep geothermal or hot rocks technology. The New Zealand government, in partnership with the agricultural industry, is investing in pioneering research into reducing emissions and lifting productivity in that sector. Businesses and households are being encouraged to improve their energy efficiency. We are busy implementing the principle that as a country we should invest in efficiency where it is cheaper than the long term costs of extra energy or new generation capacity, taking into account environmental externalities. Efforts are being made to reduce waste to landfill, including recycling in public places and through the Waste Minimisation Bill currently before parliament. I know similar initiatives are underway in Australia.

In terms of outcomes, our projections see energy emissions levelling off, in stark contrast to the prior trend upwards.

Businesses are already stepping up to the challenge and playing their part. There are many examples of climate change-related initiatives that businesses have developed.

The TZ1 Carbon Exchange offers a regulated marketplace for trading and accounting for carbon credits in the compliance and voluntary markets.

Landcare Research’s carboNZero programme has supported organisations in New Zealand and overseas to to measure, reduce and offset their greenhouse gas emissions.

The conference programme over the next few days has a strong emphasis on the carbon markets, both compliance and voluntary. This is indicative of the general acceptance that carbon pricing is a reality which businesses need to manage.

The voluntary market is growing as many organisations use this platform to gain experience in buying credits or to meet their aspirations for carbon neutrality. It can be a useful mechanism to drive innovation in developing new ways to reduce greenhouse gas production.

A number of the speakers you will hear from over the course of the next few days will describe their experiences as they look to position themselves in the sustainability market and prepare for the introduction of emissions trading. Others will be demonstrating the business opportunities that exist as a result of climate change.

It is important to remember that your organisation is not alone in its endeavours to be more sustainable and reduce its emissions. All businesses in New Zealand and Australia need to be thinking about the impact of their actions on the environment. Sustainability will be fundamental in ensuring New Zealand and Australian businesses remain competitive in the global marketplace. Given our remote location, New Zealand firms need to be especially mindful of the environmental impact of their products. This is necessary to remain competitive in our highest value overseas markets, where consumers are increasingly discerning about environmental integrity.

This forum is an excellent opportunity for you to share ideas, discuss initiatives, to push boundaries and discover new approaches.

There is a wealth of experience and knowledge gathered here for you to tap into. I am confident you will find this conference stimulating, and that it will inspire action.

Talking about climate change is one thing. The important thing is to take action.

I trust you will find this conference of value and I hope you enjoy your time here in Auckland.

ENDS

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