Interview with Leon Byner
5AA

Wednesday, 1 November 2006

(Adelaide Time)

SUBJECTS: Climate Change

BYNER:

Good morning and thanks for your time.

TREASURER:

Good morning Leon, good to be with you.

BYNER:

Likewise.  Can you explain to the people of South Australia, because it certainly has been a subject of great interest, there are two things I need to know.  First of all, why Australia will not ratify Kyoto and explain what the nuts and bolts meaning is, that if we did and other countries didn’t sign it, it would cause job losses.

TREASURER:

Well Kyoto is an agreement between some of the countries of the world, the developed countries of the world, on emissions targets – the targets that they will have to restrain their emissions.  And Australia, by the way, is aiming to hit its target.  So, whether we sign Kyoto or not, we are working towards hitting our target.  In fact, we are doing a much better job in meeting our target than many of the other countries that have ratified Kyoto.  What we say about Kyoto however, is it is all very well for the developed economies of the world to have signed this, but it is not going to make much difference.  The estimates are that without Kyoto emissions will increase 41 per cent and with Kyoto they will increase 40 per cent.  In other words it hardly makes a big difference.  And the reason why it hardly makes a big difference is that big countries that have very large carbon emissions aren’t part of it, big countries, particularly developing countries like China and India. 

BYNER:

So how would that impact on our jobs for example were we to sign it, even if it was a symbolic gesture?

TREASURER:

Well we have signed it, it is whether we ratified it.  Well, it is a question really of how you think this is going to go.  In Britain and this is just a British proposal coming out of the Stern Report, they are talking about increased taxes to restrain emissions.  Now, in Britain for example, petrol costs about $2.20 a litre and they are talking about that being far too low and putting it up.  So, if you went down that proposal of putting new taxes on oil and petrol, petrol which is say, $1.20 a litre, could go to $2.50, $2.60.  And if you had petrol prices doubling or more than doubling as a result of new taxes, well that obviously would impact on jobs.  So, it is really a question of what you think should be done to try and reduce emissions.  The tax route, and that is one of the proposals that they are looking at in Britain, the tax route definitely would cost jobs. 

BYNER:

So what about carbon trading?

TREASURER:

Well carbon trading is another proposal that you know, I think if you could get a full global agreement you could, this could be one of the things in your armoury.  At that point you would say, well if somebody for example wants to operate a coal power station and if they can do it, if they can buy credit off somebody who is planting a new forest, let us say.  And that is quite conceivable but again, if you don’t have the major emitters in the system, if you only have some countries in a carbon trading system then all you do is essentially you move the carbon consumption to the countries that are outside rather than the ones that are inside.  The other thing that I should say that I think is very, very important here is technology.  I announced a grant last week to build the largest solar power plant in the world, in northern Victoria, which will hook onto the grid and supply South Australia and Victoria and the other thing which really is going to make a big breakthrough if it can be done is what they call clean coal technology, technology that will allow us to use coal but will reduce the emissions considerably. 

BYNER:

Do you think carbon trading is a likelihood in the near future and do you believe that in years, enough people will sign it to make it work?

TREASURER:

Well I don’t think it is at all feasible if you have got large emitters such as the United States, China and India that are outside the system.  Between those three countries you have got about 50 per cent of the worlds carbon emissions.

BYNER:

Treasurer, at one point, a little while ago Australia gave about a billion dollars to countries such as India and China and a few others to develop green technology.  Why would we not have used that money within Australia, developed our industries here and value added as opposed to giving countries such as the ones I have mentioned that kind of money.

TREASURER:

I have to go back and have a look, Leon, but I don’t believe we just gave money to China and India.  We gave some money to Indonesia coming out of the tsunami, but…

BYNER:

Oh no.  No, no, no, this is was done a while ago.  It was in Parliament that, there wasn’t a lot of debate about it, but it was to help countries and encourage them to develop green technology and I just thought at the time, well if we are going to spend big dollars, it is really within Australia where we should be spending that money.

TREASURER:

Well I agree with that and we have got a $500 million fund which is called the Low Emissions Technology Demonstration Fund out of which I announced this proposal for the solar generator which is in northern Victoria up in the Mallee and also John Howard is going to announce a new proposal here in Australia today.

BYNER:

So your view is, that Australia will sign and ratify an agreement as long as the countries with whom we either trade and compete are also prepared to do the same thing.  But what you have got to say to that though is that if everybody waits back for somebody to sign, countries do have to take the lead. 

TREASURER:

Well the thing about Kyoto though, was there was only really the developed world.  It never actually tried to bring in the developing economies and what the developing economies say is they say well, it is all very well for you Europeans to now say carbon emissions should be cut, that is because you have been through your industrial revolution, you have used up all of your natural resources, we are going through the phase that you were going through 200 years ago, if you want to stop us doing what you did because you have done it and finished.  That is the argument they put.  And if you went to China Leon, and said, well look, you know, I know you have all got a very low standard of living here in China, I think the per capita income in China is about a quarter of what it is in Australia and you have got to close all of your power stations.  I don’t think the Chinese would agree with you.  And China has 1.3 billion people, it is the largest population in the world.  So I think it is much more realistic to say to countries like China and India which obviously want to pull their populations out of poverty, power obviously has to be provided to increase their standard of living but it has got to be done in a better way.  It has got to be done in clean coal technology, it may well be, in China’s case, in nuclear and if we can have breakthroughs in relation to solar and in relation to other renewables, those as well. 

BYNER:

Treasurer, thank you for joining us today.

TREASURER:

It is great to be with you Leon.  Thanks.