2nd Sustainability Summit: Asia 2007- Comment by Australian High Commissioner Mr John McCarthy

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2nd Sustainability Summit: Asia 2007
Comment by Australian High Commissioner
John McCarthy
11 December 2007, New Delhi

"Australia, India and Sustainability”

• Foreign Minister Mukherjee, Ashok Khosla, Yogi Deveshwar, distinguished participants.

• When Ashok asked us over six months ago whether Australia would be “Partner Country” for the Sustainability Summit, we readily agreed.

• It is now axiomatic that the need to address climate change, while allowing for continued economic growth and social development, is one of the key sustainability challenges facing the international community today, and I am fortunate in having the opportunity to make a few points just days after Australia ratified the Kyoto Protocol. I also am fortunate in having the opportunity to acknowledge India’s share in the Nobel Peace Prize, received by one of her sons, Dr R.K. Pachauri on behalf of the International Panel on Climate Change.

For Australia, climate change poses fundamental implications for our way of life, and the way we conduct business.

This is not only because most reports suggest we could be one of the regions most affected by the impact of climate, but because Australia is a major international supplier of resources and home to some of the world’s biggest resources companies.

More specifically, it has implications for our burgeoning economic relationship with India:

India is now Australia’s fastest growing export market, and it has moved up to become our fourth largest merchandise export market. Most of these exports are energy and minerals.
India and Australia derive considerable mutual benefit through trade and investment in the resources sector.
And Australian resources are contributing to India’s impressive growth.

If India’s growth is to be sustainable, it will need major investments and resources flows which incorporate the deployment of low-carbon energy technologies across a wide range of sectors.

Australian investment and resources will be part of this equation.
It is both our interests to get it right.

This Summit allows us all to explore how these challenges can be solved, and opportunities exploited, by aligning policies and practices with commercial considerations to scale up trade and investment in a sustainable manner.

I would like to discuss sustainability from three perspectives:

First, Australia’s approach to climate change.
Second, Australia and India’s mutual interest in sustainability.
Third, provide a few comments on some of the sectors that will be examined in Summit.

Australia’s Approach to Climate Change

• The first official act of Australia’s new Government was to ratify the Kyoto Protocol.

• Australia has committed to:

Meeting our Kyoto target;
Reducing emissions by 60% on 2000 levels by 2050;
Establishing a national emissions trading scheme by 2010; and
Establishing a 20% target for renewable energy by 2020.

• These actions are a tangible demonstration that the Australian government – and the Australian people who voted it in – are serious about addressing climate change.

• Australia also believes that the world community needs to engage in meaningful action to tackle climate change with all economies contributing to shared global goals in ways that are equitable, and environmentally and economically effective. This is the current challenge in Bali.

• Climate change and environment considerations have already prompted profound changes in Australia’s way of life and business practices;

Our farming community have adapted to take account of Australia’s unique environment.
We have made great strides in ‘best practice’ mining techniques and technology.
New buildings have to meet stringent new energy efficiency guidelines and old buildings are being systematically retrofitted.
We are investing heavily in solar and other renewable technologies.
Even the way we approach gardening has changed with over-watered lawns gradually becoming a thing of the past.

Mutual Interests in Sustainability

• Sustainability issues are clearly becoming an increasingly pressing policy preoccupation for India as well.

• Exemplary examples abound:

Delhi’s CNG powered fleet should be an example to the world, and I note other major Indian metros plan to follow suit;
Delhi’s installation of a world-class metro is a significant achievement as mass transit becomes an increasingly important option for reducing transport emissions.
India is a world leader in wind technology, and at the forefront of efforts to commercialise biogas and biodiesel
India has some of the best and cleanest technology in the world in particular industries such as cement.
I also acknowledge the leadership of those in India working on green buildings.

• I applaud those companies in India – as well as Australia – that through their commitment to corporate social responsibility are demonstrating to the world what can be done to address environment and sustainability issues.

• I would also note, however, that entrepreneurs in both countries are also focused on the bottom line, as clean technology makes commercial sense.

When energy and resources are accurately priced, low carbon options are financially attractive.
Shareholders are also increasingly factoring environment considerations into their investment decisions.

• Australia and India’s mutual interests in promoting clean development options for meeting growing resources energy demands have found a constructive vehicle through the Asia Pacific Partnership on Clean Development and Climate (AP6) where we work together on the deployment of clean technologies across a range of sectors from steel, aluminium to renewable and coal mining.

Partnerships for Action

• Finally, a few comments on some of the themes under discussion in the Summit where Australia has serious standing.

• First, the mining sector:

Our mining sector underpinned our overall prosperity and exploration and mining have contributed to the development and well-being of many local communities.
Australia has opted for a modern mining industry that welcomes foreign direct investment. Our open investment regime encourages economies of scale in the mining sector.
We are highly tuned to international price signals as resources are held in private hands.

Efficiency is tantamount, and little is wasted.

We would argue our approach also encourages investment in the most efficient and clean technologies available.

Developing a long life mine using state-of-the-art, low emissions extraction techniques, is a high cost endeavour.

Our speakers will address this issue in greater detail.
We do not presume to argue that our experience applies directly to India. Our situations differ considerably because of our very different demand, demographic and development profiles. And each country must choose its own development path.

I would merely note that it is Australia’s experience that a liberal and internationally competitive mining regime operating under clear and transparent regulation can be a huge stimulant to national prosperity.

And the income accrued through an efficiently applied royalty system can provide states with the ability to advance their development and sustainability priorities across a broad range of sectors.

• Second, on food security:

Agribusiness is another key to our economy.
We would also not presume to lecture on this – we have learned for our mistakes as well as our successes.
Australia and India recently conducted a study on the potential for Australian participation in the Indian food processing industry. This may assist India to find solutions to some of the problems it faces in getting its food products to consumers, which would assist in boosting India’s food security.
It is clear to us that agriculture is a sector in which the potential mutual benefits of cooperation are significant, and where we can learn from each other’s experience.
A particular focus for both countries in the years ahead will be addressing the challenges to agribusiness through climate change.

• Third, while not the subject of a separate session, I want to briefly mention water:

It is an issue for both Australia and India as countries face scarcity of water, which is the most important resource of all.
It will not be long until water issues receive as much attention as climate change.
Water must be available to all, with the needs of the poor and the disadvantaged in both India and Australia foremost in our consideration. That said, we cannot continue to treat water like a “free good” in the economic sense, as it leads to abuse of a scarce resource.
How to align our policies and program to take account of these needs is a dilemma confronting both countries, and one in which we should further share out knowledge and experience.

Conclusion

• Australia and India have the potential to establish a great economic relationship, of the sort Australia already enjoys with Japan, China and Korea.

• Our ability to do this will, however, be influenced by the extent to which we are able to successfully tackle the issues being addressed at this summit – how to promote growth today in a way that allows for continued prosperity in the future.

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