Speech on Australian and New Zealand: Energy and Climate Cooperation
Tēnā koutou, tēnā koutou, tēnā koutou katoa.
And I join you from the lands of the Gadigal people of the Darug Nation, where I live, and I pay my respects to their elders past, present and emerging and to any Australian Indigenous people who are present. And I note by way of introduction that here in New Zealand, New Zealand reached a constitutional settlement with Maori people in 1847 and guaranteed representation to—in 1840, and guaranteed representation to the New Zealand Parliament in 1867, which we have not done in Australia, and we’re hoping to do later this year in our most important act of national reconciliation ever with our First Peoples.
Well, it’s a pleasure to join you today with my friend James. As David said, we’ve just come from the world’s first, we believe, joint Treasury/Finance/Climate Change Ministers meeting between two countries, because certainly in Australia, and I know in New Zealand, you see, we see, climate change – dealing with climate change not just as an environmental imperative as an obligation to future generations, but as a massive economic transformation.
The biggest change – I used to say the biggest change since the Industrial Revolution. I’ve revised that. It’s bigger than the Industrial Revolution and on a more constrained time frame because we’ve got seven years between now and 2030, which is the key period for holding the world as close as possible to 1.5 degrees of warming. As people acknowledge, that 1.5 will be very, very difficult to achieve, but we can’t stop trying because every small difference over 1.5 makes a massive difference to people who are relying on us to make a change.
We talked about many things in our two plus two. I won’t give you a detailed breakdown of what we talked about. We focused on things where we can most useful collaborate, on supply chains, on joint regulation, on harmonisation, and we’ve agreed on a process to take those conversations going further. As you would expect, I hope, between Australia and New Zealand, we didn’t really stick to the script. I’ve been to many of these things. It’s not my first rodeo. You normally sit across the table from your ministerial counterparts, with the flags in the middle, with the talking points agenda agreed by your officials in advance and run through the motions.
None of that. We threw all that out and just got on with the job. Speaking very frankly, very openly, as mates about what we have to do together. And that’s as you would expect and it’s the most productive way. And certainly, that’s the way that James and I have worked together, become very close friends and collaborators over the last 12 months, domestically and internationally. When there’s an argument on at COP when we are fighting a good fight, there’s a small group of Ministers who are on the phone to each other strategising and James and I are amongst those Ministers about how we’re going to fight for better outcomes on mitigation and other things. And certainly we had to do that at Sharm el Sheikh last year and we may or may not have to do it in Dubai later in this year. We’ll see how we go. But any arguments that we have, we’re on the same side and collaborating closely.
Of course, this builds on what we’ve done in Australia over the last 12 months and the need to act. I don’t think I need to tell this group about the need to act, but I just underline a few key points. We’ve both been through it in our two countries over the last 12 months and the associated period. And in New Zealand I know that a third of New Zealand residents have been impacted by Cyclone Gabrielle. In Australia, we’ve had the 2019/2020 bushfires which destroyed the equivalent area of bushland as to landmass of New Zealand. The same landmass of New Zealand was destroyed by the Black Summer bushfires. Around 30 people directly killed, many more died by exposure to smoke inhalation; millions, a billion animals killed, by some measures, various parts along the – from insects up to mammals destroyed. A massive impact on our country.
And we all know that natural disasters are increasingly unnatural. They are increasingly frequent and will continue to be so. And that’s just natural disasters. I think even more about the slow burn, the impacts on human health from climate change. We’re adding one day a year of heatwave every five years. That means that more people will die. I represent a suburban electorate about an hour’s drive west of Sydney. Most people don’t have air conditioning. The tree canopy is effectively non-existent in most parts of my community. When it gets hot, it gets very hot. For elderly people, simply an extra day of heatwave will lead to more deaths, coronary events et cetera. These are the scale and the reason for this action. We also in Australia, and I know in New Zealand, see this very much, as I said, as an economic opportunity to act.
We in Australia want to be the renewable energy superpower of our region. We’ve always been an energy-producing country and an energy-exporting country and we will continue to do so, but that energy will change. Increasingly renewable. We have opportunities to export that through submarine cables which we’re looking to build between Australia and Singapore. Green hydrogen will be exported right across the world. There’s huge interest in Australian green hydrogen. Germany, for example, wants to buy our green hydrogen, and, in fact, the German Government, the Government of the Federal Republic has invested in Australia’s green hydrogen projects actually with real money, alongside ours, to develop green hydrogen projects in places like Illawarra, Port Augusta, to actually see a pile of projects to come out.
Our approach in Australia over the last 12 months, very briefly, has really been staged very carefully in a meaningful way to ensure that we are dealing with policy by policy and making the progress we need to make. We’ve got a lot of catching up to do after, I say in a nonpolitical way, objectively, I think, 10 years of inaction. What we’ve done first is pass the Climate Change Act, set our national targets in legislation. We didn’t have to do that. We could have just notified – we did notify the UNFCCC of our new targets, but we then thought it was important to enshrine them in the law of the land, send a signal to the rest of the world that not only has the Government changed, but the Parliament has changed and we’re a stable welcoming environment for renewable energy. I’ve got to say, that has worked.
I’ve had the chief executive of one of the world’s largest renewable energy companies who’s visited Australia once in the last six months; he’s coming again in a couple of weeks, which is pretty unusual for a global chief executive to visit Australia twice in a year, because he says Australia is now the key market for renewable energy investment around the world as far as he’s concerned. A European company, probably the world’s biggest investor in renewable energy power now sees Australia as the key market for him. I asked him why and he said, “Because you’ve legislated your targets. You have to meet those targets as a country”, and that means we have a stable and welcoming environment. That’s pretty important moving to the first sector that we’re dealing with in electricity. I’m also the Minister for Energy, which is to change our renewable energy mix – our energy mix from around a third renewable energy today to 82 per cent by 2030. That is a huge lift. That is very hard work to get from around a third up to 82 in seven years or, as I like to say to remind everyone just how urgent it is, 79 months to do this task. And we’ll do it through a whole range of policies and initiatives.
We’ve got the Rewiring the Nation policy, which is a $20 billion investment by us as the Commonwealth Government in transmission. We already have the biggest transmission grid in the world. The Australian National Energy Market is the longest line of transmission in the world. The engineering students here present might find that exciting, that we have the world’s largest energy grid. We need to make it larger. We need to build 10,000 kilometres of transmission lines because the renewable energy mix needs to be moved around the country a lot more – a lot differently to traditional fossil fuel energy. We’re doing that. I’ve signed agreements with the Governments of New South Wales, Victoria and Tasmania, with more agreements to be announced in the not-too-distant future, to build that transmission.
We have agreed with the States and Territories to a thing called the Capacity Investment Mechanism, which is again to provide that stability and certainty so we in the Commonwealth will underwrite millions of dollars of renewable energy investment by guaranteeing a floor price through the Capacity Investment Mechanism. That will be important. We are going down the offshore wind route. I’ve declared the first offshore wind zone, which is off Gippsland in Victoria. We’re about to declare the second zone and we’ll have more zones declared later in the year, which will be important. We know that offshore wind is important. It’s very windy at times; where it’s not windy onshore, it’s very, very windy, windier than on the land and has strong community support because it links into those areas undergoing economic change, those areas that previously have coal fired power stations. That’s electricity.
We’ve got industry. I won’t bore you with the finer details but we just passed our big industry emissions reforms through the Parliament – hard work to get the numbers through both houses of Parliament. But we got there. That’s equivalent to taking two thirds of the cars off Australia’s roads. Emissions reductions out of our safeguard reforms, our industry reforms. That’s a big deal. As I said in the parliamentary debate when we were getting this through, you don’t reduce emissions unless you reduce from your biggest emitters. The 215 biggest emitters are covered. Anybody who emits more than 100,000 tonnes a year of carbon has to reduce emissions by five per cent a year. Pretty straightforward in many ways. A very complicated reform but pretty straightforward at its core. That’s the industry approach.
Moving now to transport, we’ve announced that we will adopt fuel efficiency standards. You’re way ahead of us. Australia and Russia are the only two developed countries in the world without fuel efficiency standards, which means we’re a dumping ground for inefficient vehicles. And I say to Australian - international manufacturers, “Why don’t you send more electric vehicles to Australia?” They say, “Minister, because you don’t make us. We send them to where they make us.” There’s an 18-month waiting list for an electric vehicle in Australia partly because they send them to New Zealand, because you’re making them. Well, we’re going to start making them too, and we’re designing the finer elements of that now. That’s an important reform. That’s not company I like being in, being one of only two developed countries, with Russia. I may have said in Parliament – when the Opposition said they were going to oppose our fuel efficiency standards, I reminded them that Australia and Russia are the only two developed countries without fuel efficiency standards and perhaps suggested that that was their Nyet-zero policy, to oppose our fuel efficiency standards by keeping company with Russia. I did suggest that and the Opposition didn’t appreciate that.
Then, of course, we’ll move on to agriculture and something that James and I and the team have spoken about at great length. It’s about 16 per cent of emissions, much more here in New Zealand, but we’re not going to do it without dealing with agriculture, be we’ll do so in a way that is an open and responsive and inclusive conversation with farmers. And I find that farmers in Australia get it. There’s a very active group of, I think, 16,000 farmers called Farmers for Climate Action, which is working with the Government on sensible policies, whether it be soil sequestration, electrification of farming equipment, dealing with the vexed issue of methane.
So, sector by sector within the framework of those targets, legislated, one of only 38 countries that have legislated a climate act, together with New Zealand, which sends that signal and then sector by sector approach. That’s what we’ve done in the first 12 months. I’m pleased with that but far from satisfied. We’ve got so much to do – so much to do to meet those targets that we set; 82 per cent and 43 per cent emissions reduction is a big task, coming at it in 2022, which is when we started to meet those targets by 2030. It would have been much better to start in 2015 or 2012, take your pick, anywhere before 2022, but we didn’t have that choice. We had to start in 2022.
And again, of course – I’ll finish on this point, I won’t talk about it, but simply as a marker to say, of course, then restoring with friends like James in New Zealand, sensible international leadership, sensible international approach, with that framework requiring real mitigation, recognising that we do need to transition out of fossil fuels, which, you know, Australia is a big fossil fuel producer, historically has been. It’s countries like us as big fossil fuel producers we need around the world making that transition and leading that conversation, and it’s certainly the approach we take.
We’ve done pretty well in the first 12 months, but we have a lot, a lot more to do and it’s great to do it with New Zealand wherever we can, working cooperatively and harmonising the approach. Certainly, our approach, whenever we see an opportunity to do that, we will continue to do that and we’ll get on with the job in Australia because that is the task that is before us in the next seven years to keep that dream or that hope of 1.5 alive. It’s a big task. It’s an essential task and it’s one we’re absolutely committed to. Thanks for coming out this morning.