Greg Combet

30 March 2011 – China is doing far more on climate change than Australians might know – and so is Europe – according to federal climate change minister Greg Combet.

Speaking at the close of the Australia-China ministerial dialogue on climate change today (Wednesday) between Mr Combet and China’s National Development and Reform Commission vice chairman, Xie Zhenhua, in Canberra, Mr Combet said that Australia and China would  forge closer links in the battle against climate change.

This would include sharing information on the development of low carbon cities, emissions trading and a carbon price.

Mr Combet also spoke about China’s major actions on climate change at the Australia-China climate change forum at the Australian National University, Canberra today (Wednesday). Following are highlights from the written version of his speech to the forum

China action

  • See transcript from a media conference with vice chairman Vice Chairman Xied Zhenhua here

Firstly, China is currently closing one to two inefficient high polluting power plants a week.

In the five years to 2010, China has decommissioned over 70 gigawatt hours of smaller, inefficient power plants.

This is greater than the entire registered generation capacity in the national electricity market in Australia which was just under 50 gigawatts in the 2009-10 financial year.

Secondly, the International Energy Agency has predicted that the coal contribution to China’s electricity generation will fall from about 79 per cent to about 55 per cent between 2008 and 2035 as a result of the country’s clean energy policies.   This compares to Australia’s current electricity generation from coal of around 80 per cent.

Faster carbon pollution reduction

Thirdly, over the past 20 years, China has reduced the amount of carbon pollution per unit of GDP faster than any other major economy. China is now leading the world in the uptake of renewable power and a range of clean energy technologies, including ultra-efficient power plants.

This demonstrates that China is already taking significant action, contrary to some of the views that we have seen expressed in our own current debate.

Rapid positioning

China is rapidly positioning itself to take advantage of the opportunities presented by a low carbon world.

As the world’s largest emitter, China is obviously central to any global effort to tackle climate change.

The Australian Government appreciates the challenge that China has in moving to a new cleaner energy economy while also lifting significant numbers of its people out of poverty.

Further to some of the facts I have already outlined, the recently released Chinese 12th five year plan identifies reducing carbon pollution as a key element in China’s strategy to encourage greener development.

As Vice Chairman Xie points out, China has initiated lower real economic growth targets as part of its approach to the challenge of climate change – a remarkable step.

And they have made firm commitments to reduce energy per unit of GDP by 16 per cent by 2015 and reduce carbon emissions per unit of GDP by 17 per cent by 2015.

Market mechanisms

Of course, of particular interest to me is China’s plans, included in its 12th Five Year Plan, to examine the use of market mechanisms and I am sure you will be  interested in hearing more from  Ve chairman Xie about this topic soon.

A $30 billion investment

The Chinese Government invested around $30 billion in energy saving and carbon pollution reduction projects, generating investment worth an estimated $300 billion from 2006-2010.

Roughly a third of new wind turbines installed annually worldwide are in China. And Chinese companies Sinovel and Goldwind are now two of the largest wind turbine manufacturers in the world.

And they have achieved this in rapid time.  Goldwind for example commenced commercial operations only 10 years ago.

Sun king

And we all know the story of Zhengrong Shi – the Sun King.

The Australian citizen who, after finishing his doctorate in solar power technology at the University of New South Wales, moved to China

That company – Suntech Power Holdings – is now the world’s largest producer of PV panels and Dr Shi is one of China’s wealthiest people.

These are living examples of the real life business opportunities from moving to a clean energy economy.

International actions on climate change

Furthermore there are a number of other countries that are taking significant action on climate change, again contrary to what some members of the Opposition would have you believe.

European Union

For example, The EU has had an emissions trading scheme in place since 2005 and New Zealand since 2008.

California, the world’s eighth largest economy, has legislated to introduce an emissions trading system from 1 January 2012.

At the international negotiations in Copenhagen and in Cancun, countries such as Indonesia, South Korea, India and Brazil – among many others – pledged to reduce their absolute greenhouse emissions or lower the carbon intensity of their economies.

In fact 89 countries have pledged measurable action to control their carbon pollution under the UN. These countries account for over 80 per cent of global emissions and 90 per cent of the global economy.

The trend is clear and Australia cannot afford to be left stranded as a high-emissions economy in a world where competitiveness is defined otherwise.

Is it enough?

The Australian Government accepts the need, along with countries around the world, to take action on climate change.

It is reasonable to ask if Australia, or indeed China, is doing enough to tackle climate change.  This question will continue to be debated.

But this should not mean we delay efforts – including joint efforts – to develop effective climate policies that are suited to our specific economic circumstances.

And our respective governments are moving in the right direction.

The Australia Government’s own commitment to tackle climate change remains solid.

Our objective is to move to a clean energy future, this will be challenging but achievable with the right policy mix.

And the right policy mix means ensuring that Australia remains competitive in the inevitable low pollution, clean energy world of the future.

The government firmly believes the most economically responsible way to meet our commitments is to put an effective price on carbon.

As I have outlined this will a put a price tag on pollution which will be paid by our largest polluters and the money used to assist households with price impacts, support jobs in the most affected industries and to tackle climate change.

This is at the centre of our climate change strategy.

A market approach is the cheapest way to reduce carbon pollution.   It encourages ingenuity and innovation, allowing the power of the market to find the most cost effective response.

Putting a price on carbon will also enhance Australia’s long-term economic competitiveness.

Complementing this, our investment in renewable energy also positions us well for the future.

Our renewable energy target provides for 20 per cent of our electricity supply to come from renewable energy sources by the year 2020.

By creating incentives for new investment, the renewable energy target will drive a three-fold increase in renewable energy, and drive some $19 billion in investment by 2030.

Moreover, it helps create the conditions for a smooth transition towards a carbon price.

There is much that Australia can learn from China’s experience in renewable energy.  China has made some incredible advances in encouraging the use of renewable energy in its economy.

There are other opportunities for improvement in the way the Australian economy uses energy.

Improving the energy efficiency of our economy is vital for Australia’s future prosperity and the Government will continue to support households and businesses to become more energy efficient and boost their – and Australia’s – energy productivity.

This will help us manage our energy security, increase our economic productivity, reduce our carbon pollution, and assist our populations to cope with rising energy prices.

China is making good progress in implementing greater energy efficiency through its economy, and this is an area I intend to continue close cooperation with China through our bilateral partnership.

As part of this I was also pleased to announce yesterday following our ministerial dialogue an agreement to intensify co-operation in developing low carbon cities, and to share experiences in market mechanisms to achieve carbon pollution reductions.

Closing

Australia and China are in this for the long haul.

To paraphrase Lord Stern, developing and implementing effective climate policy will be an on-going learning exercise.

And Australia can learn much from other countries – including China – that are already seizing the opportunities that come from moving to a low carbon future.