Report of the Senate Environment, Communications, Information Technology and the Arts References Committee
The Heat Is On: Australia's Greenhouse Future
Table of Contents

Chapter 3

The framework convention on climate change and the Kyoto Protocol         (Part a)

[The Kyoto Protocol] established a single measure of environmental performance – a measure to drive economic and industry performance, to be a trigger for innovation and perhaps to be a catalyst for a new brand of knowledge economy. [1]

The Framework Convention on Climate Change [2]

Early developments in the climate change negotiation process

3.1 In 1979, the First World Climate Conference [3] recognised climate change as a serious problem. Following discussions on the possible effects of climate change on human activities, this scientific gathering issued a declaration calling on the world's governments `to foresee and prevent potential man-made changes in climate that might be adverse to the well-being of humanity'. The Conference also endorsed plans to establish a World Climate Programme (WCP) under the joint responsibility of the World Meteorological Organization (WMO), the United Nations Environment Programme (UNEP), and the International Council of Scientific Unions (ICSU).

3.2 A number of intergovernmental conferences, focusing on climate change, were held in the late 1980s and early 1990s. [4] Together with mounting scientific evidence, these conferences helped to air international concern about the issue. Stakeholders included government policy-makers, scientists, and environmentalists. The meetings addressed both scientific and policy issues and called for global action.

3.3 At the `Conference on the Changing Atmosphere' in Toronto in 1988, the UN General Assembly took up the issue of climate change for the first time and governments representing industrialised countries voluntarily pledged to cut CO2 emissions by 20 per cent by the year 2005 (the so-called `Toronto target'). [5]

3.4 As a result of this meeting, in 1988, the WMO and UNEP established the Intergovernmental Panel on Climate Change (IPCC). Further discussion on the IPCC and the findings of its assessment reports is found in chapter 2.

3.5 In 1990 the IPCC's First Assessment Report was published and confirmed scientific evidence supporting the presence of substantial human induced climate change. It further claimed that 60 to 80 per cent cuts in CO2 emissions over the next few hundred years would be needed to stabilise the growing concentration of greenhouse gases in the atmosphere. It had a catalytic effect on both policy-makers and the general public and provided the basis for negotiations on a framework convention on climate change and recommended that negotiations should be launched for the development of a global climate agreement. [6]

3.6 The UN General Assembly opened negotiations on the United Nations Framework Convention on Climate Change (UNFCCC) and established an Intergovernmental Negotiating Committee (INC) with a mandate to develop the Convention. [7]

3.7 The Second World Climate Conference in 1990, also supported the call for a framework convention on climate change. Sponsored by WMO, UNEP and other international organisations, this key conference featured negotiations and ministerial-level discussions among 137 states plus members of the European Community. The final declaration supported a number of principles later included in the UNFCCC. These principles included:

• climate change as being a `common concern of humankind';
• the importance of equity between nations;
• the `common but differentiated responsibilities' of states assigns the lead in combating climate change to developed countries;
• the special needs of developing countries;
• the importance of promoting sustainable development; and
• the precautionary principle. [8]

3.8 The INC met for the first time in February 1991 to develop the UNFCCC. In May that year final negotiations concluded and, as a first step towards addressing the issue, industrialised countries agreed to bring their CO2 emissions back to 1990 levels by the year 2000. However, the emissions commitments in the UNFCCC were not to be legally binding. [9]

3.9 On 9 May 1992, the UNFCCC was adopted in New York by the INC and opened for signature at the 1992 Rio Earth Summit in Brazil.

3.10 Article 2 of the UNFCCC states that its objective is to achieve:

… the stabilisation of greenhouse gas concentrations in the atmosphere to a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved within a time frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner. [10]

3.11 The UNFCCC contained no firm or binding commitments on emissions levels, but did lay down some general principles and objectives which would shape the negotiations leading up to the Kyoto Summit in 1997. It specified that:

• developed countries (most members of the OECD plus the states of Central and Eastern Europe undergoing the process of transition to a market economy - known collectively as Annex I countries) should take the lead with abatement measures;
• that the climate and economic vulnerabilities of developing states should be recognised; and
• that abatement should be consistent with sustainable national development and not infringe the goals of an open and supportive international economy. [11]

3.12 Parties to the UNFCCC committed themselves to:

• develop, update and publish national greenhouse gas inventories;
• begin the development of programs and policies for climate change mitigation;
• promote the development and transfer of clean and emissions-reducing technologies;
• cooperate in managing the impacts of climate change on affected communities and ecosystems; and
• promote research into climate change, technology, and policy; increase education and training; and promote the cultivation of sinks and reservoirs to absorb greenhouse gases. [12]

3.13 In addition, the Parties agreed to take climate change into account in their relevant social, economic, and environmental policies; cooperate in scientific, technical, and educational matters; and promote education, public awareness, and the exchange of information related to climate change. [13]

3.14 The Annex I Parties were required to describe the adopted policies and measures designed to work towards returning greenhouse gas emissions to 1990 levels by the year 2000. They were also required to give projections through to the year 2000 of how their policies will affect emissions and sinks. These projections were to be subjected to a regular review process. A team of experts from developed and developing countries, and from international organisations, was to be assembled for each review by the Convention's Secretariat. However, the negotiations of the Kyoto Protocol in 1997 have superseded these objectives with individualised targets for each Annex 1 country to be met on average over the first commitment period, from 2008 to 2012, with 1990 as the base year.

3.15 The sharing of information by governments is central to the working of the UNFCCC. The Convention requires its members to submit `national communications' to the Conference of the Parties (CoP) [14] on a regular basis. This information, about national greenhouse gas emissions, international cooperation, and national activities, is reviewed periodically so that the Parties can track the Convention's effectiveness and draw lessons for future national and global action. The first communications were submitted in September 1994 by Annex I Parties.

3.16 In December 1992, Australia became the ninth country to ratify the Convention. By 21 March 1994, the UNFCCC entered into force having received the required 50 ratifications. [15]

3.17 A watershed was reached at the Berlin Conference of the Parties (CoP 1, the Berlin `Climate Summit'), held in 1995, when a large group of developing countries stated that the UNFCCC commitments were inadequate and called for industrialised nations to accept binding emissions reductions. The Parties agreed to the `Berlin Mandate' to develop a Protocol or other legal instrument by the time of the Third Conference of the Parties (CoP 3), which was to have contained binding reductions within specified time frames extending beyond 2000 to 2005, 2010 and 2020. [16] The Berlin Mandate also stated that the negotiating process would not introduce any new commitments for the developing countries. The Mandate recognised that the share of global emissions from developing countries will need to grow to meet their social and development needs. [17]

3.18 In December 1995, the IPCC produced the Second Assessment Report on the science of climate change. The Report was written and reviewed by some 2,000 scientists and experts world-wide. Its findings underlined the need for strong policy action and concluded that `the balance of evidence suggests that there is a discernible human influence on global climate. [18] Further details of the findings of the Second Report is included in chapter 2.

3.19 The IPCC Third Assessment Report is due to be completed in 2001. The IPCC will produce a series of technical papers and special reports before the Third Assessment Report is published. Likely outcomes are discussed in chapter 2 of this report.

3.20 The Second Conference of the Parties (CoP 2), in July 1996, achieved little direct progress on CO2 emissions reduction targets. However, with the support of the US, the majority of Ministers present at the meeting signed the `Geneva Declaration'. The Declaration stated that:

• the new IPCC science provided the basis for `urgently strengthening action';
• the world faced `significant, often adverse impacts' from climate change; and
• legally binding `significant overall reductions' in greenhouse gas emissions should be negotiated by the next Conference of the Parties. [19]

The Kyoto Protocol

The negotiations

3.21 In December 1997, the Conference of the Parties (CoP 3) adopted the Kyoto Protocol, the culmination of 30 months of negotiations. The Parties finally accepted legally binding greenhouse gas emissions commitments for all Annex I countries and outlined specific new policies and measures which could be used to meet them.

3.22 The 1997 Kyoto Conference agreed upon the six types of emissions [20] for which emissions targets were to be set; established multi-year budget periods to accommodate sudden shifts in the economies of Parties; assigned a series of differentiated targets for nations and groups of nations; and went some way to defining an acceptable definition of sinks. Most nations agreed to a reduction of emissions during the first five year `commitment period' from 2008 to 2012, and in relation to 1990 as the base year.

3.23 In Kyoto, the European Union (EU) `bubble' (emissions from a group of countries [21]) agreed to reduce emissions to 92 per cent of 1990 levels, the US 93 per cent, Japan 94 per cent, and Canada 94 per cent. New Zealand was allowed an increase to 101 per cent and Australia 108 per cent of their 1990 emissions levels. The overall aggregate effect of the Protocol, across all countries with targets, is a reduction of 5.2 per cent globally by 2010 in comparison with 1990 levels. [22]

3.24 However, the figures need to be considered in relation to the changing emissions levels across nations through the 1990s. EU emissions were just below 1990 levels, the rest of the OECD countries had increased emissions by 6 to 10 per cent and the former `Eastern bloc' countries saw falls of between 15 and 50 per cent. Thus, the overall effect of the UNFCCC Annex I countries' commitments at Kyoto, if met, would only be to stabilise the level of developed country emissions at 1990 levels, and would have little impact upon developing country emissions. [23]

3.25 By themselves, the Kyoto commitments will make little impact upon future global warming and represent only a first step in stabilising global concentrations of CO2. It has been estimated that the agreed reductions in emissions will hold back global temperature increase on average between 4 to 14 per cent by the end of the century, that is, by between 0.08ºC and 0.3ºC. These figures can be compared with a rise, from 1860 to 1998, of global surface temperatures of 0.6ºC, and IPCC mid-range projections of an additional increase of 2.0ºC by 2100. The projected impact on sea-level rise is similarly modest, with a reduction in the anticipated rise of only one centimetre by mid-century and a few centimetres by the end of the century. [24] Sea levels have risen between 10 to 25 cm since the end of the 19th century and mid-range IPCC projections suggest a further rise of 50 cm by 2100. [25]

3.26 According to the Prime Minister's Science, Engineering and Innovation Council (PMSEIC) the Kyoto Protocol `was a watershed in the global greenhouse debate', [26] bridged an important threshold in negotiations and created a new framework and machinery for future abatement action:

It established a single measure of environmental performance – a measure to drive economic and industry performance, to be a trigger for innovation and perhaps to be a catalyst for a new brand of knowledge economy. [27]

3.27 Optimists look to the second commitment period, after 2012, to achieve the restructuring of national energy economies with the introduction of new technologies, infrastructure and industries. There is also an expectation that developed country actions, serving as a positive example, will help draw developing nations into future commitments to emissions reduction. [28] However, uncertainty has been created by the reluctance of the US Congress to ratify the Protocol and the slow progress in drawing developing nations into the commitment process. [29]

3.28 The Protocol was opened for signature in March 1998 and, as at 13 January 2000, it has received 84 signatures. Details may be found in appendix 4.

Other features of the Kyoto Protocol

3.29 Countries have a degree of flexibility in how they make and measure their emissions reductions. Joint fulfilment, or `bubble' agreements between developed countries are encouraged (Article 4). [30]

3.30 The Kyoto Protocol also establishes three innovative `flexibility mechanisms' designed to assist developed nations meet their targets. These include:

• Emissions Trading - (Article 17) which allows UNFCCC members to trade unused emissions credits - effectively to redistribute Kyoto emissions targets without affecting the global emissions total. Members will also be able to acquire `emission reduction units' (ERUs) by financing certain kinds of projects in other developed countries.
• Joint Implementation (JI) - (Article 6) which encourages Annex I countries (and companies) to transfer to, or acquire from other Annex I countries, ERUs for reductions over and above those which would otherwise occur. [31] It is planned that JI will be operational from the first commitment period in 2008.
• The Clean Development Mechanism (CDM) - (Article 12) introduced to assist Parties not included in Annex I in achieving sustainable development and in contributing to the ultimate objectives of the UNFCCC. The CDM is a means by which developed countries may claim credits for emissions reductions in developing countries, while developing countries gain investment and access to improved technology. [32] It also assists Parties included in Annex I in achieving compliance with their quantified emission limitation and reduction commitments under Article 3. [33] Participation is voluntary and may involve public and private entities. [34] CDM is planned to be introduced as soon as the outstanding aspects of the mechanism have been negotiated by the Parties and certified emission reductions (CERs) will be used to assist in achieving compliance up to and in the first commitment period. [35] The provision for this early crediting in the CDM is unlike anything else in the Protocol.

3.31 These proposals have created definitional and operational issues yet to be resolved and were the subject of controversy during the Protocol negotiations. All three mechanisms raised issues of:

• how transparency, efficiency and accountability can be assured;
• to what extent the trading of permits, ERUs and CERs can be used to deliver the overall Annex I commitment;
• liability for traded units which are based on unfulfilled contracts;
• how to resolve the assessment of baselines for CDM and JI projects;
• the factor that the banking of CERs is allowed from 2000 for use in the budget period but that ERUs cannot be banked and thus have no commercial significance until 2008; and
• the question of developing countries. Without their participation the three Kyoto mechanisms will have little chance of success. Developing countries are expected to be major contributors of greenhouse gases by 2010. There may be problems with implementation of long term projects because of weak legal and institutional frameworks. In addition, there are fears in Annex I countries that the costs of abatement resulting from Kyoto commitments may result in industries relocating to developing countries to avoid the restrictions (a situation commonly termed `carbon leakage'). [36]

3.32 The mechanisms were promoted strongly by the US and other OECD countries, and treated as the object of suspicion by the EU, China, India and other G77 States. The Parties have agreed to defer their more detailed negotiations and the design of these mechanisms to later meetings. [37]

3.33 In addition to the development of the above measures, the Parties are bound to develop the compliance system outlined in the Protocol. Further work is also required on provisions for the land use change and forestry sector (sinks), methodologies for estimating emissions and removals, and reporting obligations. [38] The shape and nature of the Protocol's compliance system and the definition and rules to be adopted on sinks, are likely to be key issues to be negotiated and agreed at CoP 6 in November 2000. [39]

3.34 During the Kyoto negotiations two distinct negotiating blocs emerged among the Annex I countries - the `umbrella group', consisting of Australia, Canada, Japan, Iceland, New Zealand, Norway, the Russian Federation, the Ukraine and the US, and a group which included most other Annex I countries, led by the EU. [40] The umbrella group has made a joint submission on the rules for the operation of the Kyoto mechanisms, where it seeks market-based, transparent and uncapped (unlimited) arrangements. [41]

Australian policy and the Kyoto flexibility mechanisms

3.35 The Prime Minister's 1997 statement contained the provision of `$6 million for facilitating Australian involvement in the Kyoto project-based mechanisms such as the Clean Development Mechanism and Joint Implementation'. [42] This funding was largely focused on facilitating commercial involvement in projects in developing countries and meeting the additional costs incurred by business in undertaking such a project. [43]

3.36 Methods for promoting international partnerships in the context of the CDM and JI of the Kyoto Protocol include:

• AusAID funds for programs which contribute to abatement and adjustment to climate change, worth $154 million to November 1997;
• coal energy and training programs;
• efforts to channel Australian expertise in clean energy through the Australian Energy Systems Exporters Group (AUSTENERGY);
• International Centre for Application of Solar Energy (CASE) programs to promote and facilitate the sustainable application of solar and renewable energies in developing countries; and
• the promotion of international greenhouse partnerships with Australian industry in JI and CDM projects focused on the Asia-Pacific. [44]

3.37 Australia supports the National Strategy Study Program (NSSP), a collaborative initiative between the World Bank and bilateral donors. The Australian NSSP aims to build capacity of developing countries in the Asia-Pacific region to explore the opportunities and potential benefits of participating in the CDM. It also helps them to explore their role in the CDM, identifying potential investment projects and developing national policies regarding the CDM. Australia will provide $3 million to be used for the execution of selected climate change-related studies in the Asia-Pacific region. [45]

3.38 An International Greenhouse Partnerships Office has also been set up within the Department of Industry, Science and Resources. [46] International Greenhouse Partnerships are aimed at laying the groundwork for Australia and cooperating countries to benefit from mutually beneficial greenhouse gas mitigation projects under the project-based Kyoto mechanisms, CDM and JI. Cooperating countries are expected to benefit through enhanced investment, technology transfer and human resource development, and Australian investors will be able to secure greenhouse gas mitigation credits from such projects. [47]

3.39 Currently, Australia's overseas aid program is funding programs and projects that help to abate greenhouse gas emissions and facilitate adaptation to climate change. [48] In addition, Australia has commitments of approximately $46 million to the Global Environment Facility (GEF) [49] climate change program since 1991 to assist with the introduction of:

• renewable energy technologies;
• agricultural research projects;
• environmental management projects;
• forestry and land management activities; and
• adaptation and abatement assistance to vulnerable small island states in the Pacific. [50]

3.40 Australia now has nine approved greenhouse projects in five countries (Chile, Fiji Islands, Indonesia, Mauritius and the Solomon Islands). Five new projects on fugitive emissions, fuel conversion, energy efficiency and renewables were endorsed recently. The Program is also building awareness of the project-based Kyoto mechanisms by staging bilateral workshops in cooperating countries and training and development courses in Australia. [51]

Australia and Kyoto: A Special Case?

Arguments in favour

3.41 During the negotiations for the Kyoto Protocol, the Australian Government made a claim that Australia has a distinctive set of national circumstances and challenges which will have an impact on efforts to achieve effective climate change abatement. Michael Grubb highlighted these national circumstances in the climate change negotiations when he pointed out that:

Cooperation and action to limit climate change is complex because serious responses could reach deep into countries' economic and political interests. [52]

3.42 Mr Vivek Tulpule, representing ABARE, more recently argued that:

What we have said in the past is that Australia needs to worry about its target relative to other countries because we believe - and our modelling shows and other people's modelling shows - that Australia would have been more severely affected by the European-style targets that were being proposed at that time. [53]

3.43 While it is estimated that Australia's emissions account for only 1.4 per cent of total global emissions, it is the largest emitter per person in the industrialised world. [54]

3.44 Australia's economy, trade profile, energy use and other circumstances were argued as being unique among Annex I Parties in that:

• Australia's population, while small, has been increasing rapidly when compared with the growth of other OECD countries. In the period 1985 to 1992, Australia had a population growth rate that was higher than all other Annex I countries with the exception of Turkey. This in turn has influenced Australia's growth in energy consumption;
• Australia has vast distances separating urban centres within the country and even greater distances separating Australia from other countries. Traversing these distances has implications for Australia's transport sector and energy usage;
• changing land-use patterns and Australia's large forestry sector accounted for around one-fifth of Australia's greenhouse gas emissions in 1990. While most developed countries have relatively stable patterns of land usage, land use patterns in Australia are still undergoing significant change;
• Australia is the world's largest exporter of coal, bauxite, alumina, lead, titanium and zircon and one of the world's leading exporters of gold, iron ore, aluminium, nickel, zinc and uranium. Mineral resources and resource processing industries are energy-intensive industries and generate 8.5 per cent of Australia's GDP;
• agricultural and pastoral properties on Australia in 1994 to 1995 covered almost two-thirds of Australia's land surface. Agricultural emissions are a very important component of Australia's emissions profile accounting for 17 per cent of emissions;
• Australia has a significant export link with developing countries in the Asia-Pacific region;
• Australia's abundance of fossil fuel resources has influenced energy choices and the structures of the economy. Australia's energy sector is highly reliant on gas and coal. Subsequently, Australia is a large producer of fossil fuel-based products and continues to be heavily reliant on energy and greenhouse-intensive production processes and export. Australia's manufacturing sector is more dependent on fossil fuels than any other OECD country (with the exception of Iceland) and energy and greenhouse-intensive goods account for over 80 per cent of Australia's merchandise exports; and
• trade specialisation has caused Australia's economy to become more energy and greenhouse gas intensive. The country's trade profile means about 20 per cent of the country's greenhouse gas emissions are embodied in exports (notably aluminium and agricultural products). Similarly, emissions associated with Australia's highly greenhouse-intensive exports are attributed to Australian sources rather than to the countries consuming these exports. Australia is a significant net exporter with nearly 70 per cent of Australia's total energy production destined for overseas markets. [55]

3.45 Prior to CoP 3 in Kyoto, the Australian Government argued vigorously that, since Australia is heavily dependent on fossil fuels for export revenue, and relies on fossil fuels as the chief source of domestic energy, uniform emissions reductions targets would be very costly and would impose a disproportionate economic burden on Australia compared with other Annex I countries. [56]

3.46 The Government advocated a form of `differentiation', that is, allocation of different targets between Annex I countries, on the basis of equal economic cost per capita for each Annex I country. The Australian Government claimed that this proposal was consistent with the UNFCCC's reference to `common but differentiated responsibilities'. [57] Australia would, under this proposal, have more lenient targets than most other countries.

3.47 The United Nations review team, for the first Australian National Communication in 1994 to the Intergovernmental Negotiating Committee for the UNFCCC, agreed that `Australia is in many respects unique' and:

… [t]he team recognize[d] the complexity of Australia's system of government where the Federal Government has limited constitutional powers to implement measures, and where progress depends on establishing partnerships with state and local governments. [58]

3.48 The team acknowledged the leadership of the Council of Australian Governments (COAG) to implement commitments under the Convention. The broad range and quality of a number of climate-related research activities being carried out in the country was also recognised, as well as research in the pure and applied sciences on climate change issues, including expected impacts of and adaptation to climate change.

3.49 Support for the negotiations, designed to provide Australia with a special emissions target set in the context of national circumstances, is noted in a number of submissions including the Department of Resources Development (WA), Wesfarmers CSBP, and the Minerals Council of Australia.

3.50 The Department of Resources Development (WA) argued that:

The preparation of national greenhouse initiatives must be implemented in respect of national strategic policy priorities and within the context of the Prime Minister's statements referring to protection of Australia's international competitiveness and the mining sector.

… any move to control greenhouse gas emissions by restricting expansion or development of new projects would have a major impact on the Western Australian and Australian economies.

… new developments will potentially locate in countries that are not signatories to the Kyoto Protocol, with no benefit to the global environment but a real cost to the Australian economy. [59]

3.51 Wesfarmers CSBP told the Committee:

… if Australia somehow or other falls into an international line with a short time frame that keeps the Kyoto mechanism at 25 or 26 countries and ignores the other 170, there is a very real risk that countries like ours will have a really difficult time, because every product we are manufacturing is competing against direct imports, particularly in the case of fertilisers in Western Australia at the moment. [60]

3.52 The organisation explained that they were concerned that `if the time lines are too short, or they are skewed against one country in favour of another, then companies like ours will have a very hard row to hoe' and stressed that they:

… would not support greenhouse gas costs whether they are permits or taxes that apply only to Australian-based companies and not imported. We would find it a very difficult situation if we were to have, for example, something like a carbon tax or an emission permit attached to our plants in Australia producing a product which someone else could bring in over a jetty without that cost while still creating the CO2 somewhere else in the world. From that it follows in our view that it would be very difficult for Australia to act unilaterally with greenhouse because we are such a small part of the world and we are a trading nation, whether importing or exporting. [61]

3.53 Richard Wells, Executive Director, Minerals Council of Australia explained:

We argued in Kyoto that the Australian economy is very different and deserves recognition in any international target setting. Therefore, we were very much supportive of the view that we could not afford, as an economy, to take some of the cuts that other countries did that do not have such a dependence on fossil fuel and fossil fuel dependent industries. We still argue that the Australian economy has special characteristics. There is nothing to apologise for; it is part of our competitive advantage which benefits the Australian community. But what we need to do is be responsible about bearing our share of the burden in achieving these things internationally, so it is the same position. [62]

Outcome of the negotiations and the agreed target for Australia

3.54 On the basis of the case it presented, the Australian Government achieved a differentiated emissions target of 108 per cent over 1990 levels in the 2008 to 2012 period, a target that is 13 per cent higher than for most OECD countries.

3.55 This agreed target was supported in several submissions to the Committee, but other submissions expressed concern about the adverse implications for achieving future targets.

3.56 His Excellency Ralph Hillman, Ambassador for the Environment, said that:

This outcome was seen as a good achievement for Australia. We had the concept of differentiation accepted in the negotiations, we had sinks included in a way that accommodated our interests and we were given a plus eight per cent target, which recognised Australia's particular economic circumstances. [63]

3.57 However, the Australian Conservation Foundation noted that Australia could be faced with an equivalent or greater cut to emissions in the second and subsequent commitment periods. Mr Don Henry, Executive Director of the Australian Conservation Foundation suggested that:

Australia will not be allowed to get away with very flexible interpretations of exactly what our Kyoto target means. I would imagine that will be the international pressure that will be on us because it would set an example that would totally undermine some of the efforts and dimensions particularly to bring developing countries either into the mechanisms at the moment or more vigorously into the overall effort. [64]

3.58 Although the negotiated 2008 to 2012 target has given Australia some `breathing space', this could quickly disappear if a national framework for effective abatement actions to reduce emissions in the energy sector is not developed. Ms Tristy Fairfield from the Friends of the Earth (Fitzroy) explained:

We need to accept the fact federally that we are going to get much tougher emissions targets after the 2012 commitment period. We have not actually made any real change towards achieving the targets that we have got. [65]

…

By moving so slowly we are failing to recognise that we are going to have much tougher emissions targets after the next round, particularly if we fail to meet the soft targets we got in this round. After 2012 we do not seem to have any long term vision. … there are no real on-the-table plans for the post-2012 commitment period. [66]

3.59 Senator the Hon Robert Hill, Minister for the Environment and Heritage, also warned that Australia may be left vulnerable when targets are established for post-2012 periods. Senator Hill pointed out that the agreed target for Australia:

… should not be interpreted, however, as a signal that we can continue to rely on driving economic growth through the increased emission of greenhouse gases. The Kyoto outcome has given Australia the breathing space required to make the structural changes in our economy.

The international trend, in fact, appears to be significantly moving toward a `decoupling' of economic growth from a related growth in emissions. In other words, developed nations are growing their economies without a corresponding increase in greenhouse emissions. [67]

3.60 He went on to argue that Australia needed to join this trend:

The ability of developed nations to decouple their economic growth from emissions growth will have major implications when the international negotiations begin to determine the first round of post-Kyoto Protocol reduction commitments. Nations which have achieved this decoupling will be well placed to meet these further commitments. Nations which continue in the ways of the past will inevitably face an even tougher, more costly task. It seems sensible that Australia should take precautionary action now to ensure it does not fall into this latter category. [68]

… it's not just the cost of action which must be considered but the cost of inaction. [69]

3.61 One other problem perceived by a number of submissions is that emissions growth in Australia has already exceeded the target agreed in Kyoto and future cuts in expected growth of emissions are necessary. [70] Ms Gwen Andrews, Chief Executive of the Australian Greenhouse Office (AGO) acknowledged, before the Committee, that the Australian projections of the effect of existing measures on reducing business as usual have moved from 118 per cent to a projection that may go as high as 123 per cent above 1990 levels. [71] In July 2000, the AGO announced that Australia's latest National Greenhouse Gas Inventory showed a 16.9 per cent increase overall in emissions from all sectors (excluding land clearing) from 1990 to 1998. [72]

3.62 The PMSEIC, stated that meeting the negotiated commitment will require a cut of 35 per cent, or 135 Mt (million tonnes of CO2 equivalent), from expected growth by 2010. [73]

3.63 Mr Michael Rae, representing the World Wide Fund for Nature, told the Committee that, because Australia has been highlighted as being a special case, there will be considerable additional international attention on the need for Australia to achieve its target in the first commitment period:

IPCC is saying that we need between 50 and 70 per cent reductions immediately to stabilise emissions. That is clearly the sort of target we should be going for at a global level. I think Australia was particularly fortunate at Kyoto to win the target it did, looking at a very narrow view, and I cannot imagine that the international community will allow us to persist in not meeting our own obligations.

I think it would be a very clear responsibility of government to signal to the community that that particular apportionment of emissions is unlikely to continue for a very much longer and the Australian people and the Australian economy will have to adjust. The question is whether we do that in an orderly fashion or whether we get a very painful shock to the system as the international community brings us to account. [74]

3.64 There is a strong argument to suggest that under the targets established for the second commitment period, to be negotiated after 2005, Australia will face a more stringent target well below 100 per cent. This prospect requires leadership from government and recognition from industry that serious abatement action needs to begin now.

Concern that Australia has presented a `special case'

3.65 Other submissions also expressed considerable concern that Australia had presented a special case at Kyoto. Climate Action Network Australia (CANA) objected to the Australian Government's negotiation in Kyoto and claimed that:

This is a dishonourable position and one that Australia should disown immediately. It is unjust, inaccurate and hypocritical… . [75]

3.66 The Australia Institute argued that the Australian proposal for differentiated targets was seen as being driven primarily by self-interest. [76] It added:

At home and abroad, Australia was increasingly characterised as a `pariah nation', bracketed with the OPEC countries and seen to be pursuing narrow self-interest with little regard for the environment or the diplomatic implications of seeking special concessions. [77]

3.67 Also, Professor Ian Lowe [78] pointed out:

At the moment Australia is the only major carbon intensive economy that has not undertaken to reduce its emissions. [79]

3.68 It may be argued that Australia's reputation will be further affected by Australia's interest in maximising the scope of the Kyoto flexibility mechanisms. In the lead up to the next Conference of the Parties, Australia has been seeking very broad definitions in relation to sink activities, CDM projects and emissions trading rules. Australia's stance on these issues could be interpreted as a preoccupation with minimising the requirement for stronger greenhouse abatement measures.

3.69 In its submission to the Committee, the Australia Institute challenged a number of the arguments made by the Australian Government at Kyoto when negotiating a special case for emission targets. [80] The Institute addressed the claim that Australia's fossil-fuel dependence makes it harder for the country to cut emissions and argued that this was unsubstantiated by economic modelling results. The Institute pointed out that:

… the opposite is more likely to be the case. In determining the cost of emission reductions, the key test is not the relative amount of fossil fuel burnt but how efficiently a country burns it. As an economy reduces its emissions it will start with the cheapest abatement measures (energy savings) and then move to the more expensive measures by replacing energy-using equipment and switching from high-emission sources such as coal to low emission sources such as natural gas and nuclear power. [81]

3.70 The Institute also explained that exports of fossil fuels have no impact on Australia's greenhouse gas emissions, as emissions are counted in the country in which the fuels are combusted. [82] In this case only energy used in mining, processing and transporting fuels appear in Australia's emissions inventory. In relation to transport the Institute argued that, although Australia is a big country:

… most travel in Australia occurs in urban areas and, accordingly, the size of our country has only a small impact on total travel requirements. Secondly, when compared to other developed countries, the share of emissions from transport in Australia is about average. [83]

The economic modelling of the special case

3.71 To support its argument in Kyoto at CoP 3, the Australian Government requested the Australian Bureau of Agricultural and Resource Economics (ABARE) to provide estimates using the MEGABARE model of the economic costs to Australia of cutting emissions. The Australia Institute submission to the inquiry noted that:

The model results in 1995 indicated that real Gross National Expenditure (GNE) would fall below the `business-as-usual' path by amounts ranging from -0.27 per cent in the year 2000 to -0.49 per cent in 2020. [84]

3.72 The model and its predictions have since been the subject of criticism. The Australia Institute argued that:

… the MEGABARE model failed to allow for technological change in response to policies to cut emissions, excluded assessment of the benefits of reducing emissions, ignored emissions from land clearing, seriously overstated the likelihood of jobs going off-shore, and employed various presentational ticks that gave a grossly misleading picture of the economic costs of reducing emissions.

Economists outside of ABARE concluded that the MEGABARE model did not provide accurate or reliable estimates of the economic impacts of emission reduction policies and should be disregarded. [85]

3.73 The Committee questioned ABARE about the nature of the peer review of the work of that organisation. [86] Dr Fisher, representing ABARE, explained to the Committee that:

[Any review] depends on when these things are being published. For example, we released the document you have before you, the one we put in as the submission, using our own internal review system, but the content of that is now subject to the energy modelling forum processes and we will use the feedback we get from that as input into the next document that we produce later this year. [87]

3.74 However, the Australia Institute claimed that:

The Minister revealed that most of the funding for the modelling work had been received from businesses and business organisations involved in the fossil fuel industry… . These organisations paid $50,000 for a seat on the Steering Committee overseeing the modelling work. [88]

3.75 The submission from the Australia Institute also argued that `ABARE did not subject its work to a proper process of peer review' [89] and by:

… limiting membership of the Steering Committee to organizations willing to pay $50,000, ABARE had failed to protect itself adequately from `allegations of undue influence by vested interests'. Its practices `could create a reasonable public perception that the research projects were weighted in favour of the interests of Australian industry'. [90]

3.76 The Australia Institute, has more recently commented:

We all know that, prior to Kyoto, the ABARE's modelling was enormously influential in the political debate, it was the basis of the whole of the Australian Government's position, and yet no one was acknowledging the extraordinary arbitrariness of the ABARE model, and indeed of other models. I have heard today from Vivek [Research Director, Trade and International Policy Branch, ABARE] that these figures are two years old and now are sharply different. The costs now estimated by ABARE are markedly lower than they were prior to Kyoto. If we had known that two and a half years ago, does that mean the Australian Government's position in the lead-up to and at Kyoto would have been markedly different? [91]

3.77 The Minister for the Environment and Heritage, Senator Hill has remarked that:

ABARE's work since Kyoto has actually indicated that the cost of compliance may not be as great as originally expected. [92]

3.78 Dr Hamilton argued that other modelling techniques have shown that investment in energy efficiency would substantially reduce the estimated economic costs of bringing about large reductions in greenhouse gas emissions and that these sort of results are not reflected in the calculations from the ABARE GTEM [93] model. [94] He added that:

[I]t is impossible to use ABARE model results to draw any conclusion about the desirability or otherwise of policies because they only assess the costs of emission reductions, they do not make any estimate of the benefits of reducing emissions. [95]

3.79 Mr Alan Pears, representing the Sustainable Energy Industry of Australia (SEIA), also expressed criticism of the ABARE model:

… not only I but many others see ABARE's analysis as being the absolute worst-case, most pessimistic, scenario because it actually means replacing a lot of our coal-fired power stations by renewable energy and pursuing almost no energy efficiency by 2020. It is a very high cost scenario. [96]

3.80 Mr Pears explained that:

When we start putting this analysis into perspective, we find that something like 85 per cent of Australian industry will benefit under a very conservative costing analysis of greenhouse response. When we look at the industries that are supposedly adversely affected, we have to recognise that ABARE's analysis assumes those people will do very little to change. [97]

3.81 Dr Brian Fisher, Executive Director of ABARE, explained to the Committee that the model produced for the Kyoto negotiations in 1997 had been superseded by new premises which have emerged post-Kyoto:

All of the simulations done pre-Kyoto were done in a policy world where we thought that we would only be dealing with one gas, namely carbon dioxide. We were talking about uniform percentage reductions for every country. As it turned out, we agreed at Kyoto that we would include six gases in the coverage and we would differentiate targets.

There is quite a substantial difference and impact on Australia and on its sectors as a consequence of moving from a ten per cent reduction in emissions against the 1990 base versus an eight per cent increase. There is a radical difference in terms of the impact on sectors as a consequence of inclusion of gases like methane and nitrous oxide. [98]

3.82 Dr Fisher concluded that the early modelling:

… was based on correct presumptions at the time but as a consequence of the negotiations and agreement to include totally different coverage we have a new set of model results. [99]

3.83 He emphasised that the Committee `should not rely on those results because they were done in a totally different environment for a totally different set of policy settings' and that MEGABARE is not a model ABARE uses any more. He explained that ABARE now uses a model called GTEM which incorporates the greenhouse sensitive gases carbon dioxide, methane and nitrous oxide. [100] Dr Fisher added that ABARE is:

… currently working on [their] next set of projections and those will be re-leased once [they] finalise [their] analysis of [their] fuel and energy survey, which is a biennial activity. [101]

3.84 At a Round Table on Global Warming held before the Committee, Mr Vivek Tulpule, Research Director in Trade and International Policy at ABARE, noted:

The quality of the data just keeps improving all the time. As we have the resources and the funding to improve the quality of the data, we do that. [102]

3.85 However, Mr Tulpule added that the Australian Government, at the time of the Kyoto Conference of Parties, `would have been informed by models that ranged across the top end of what people were saying, and the bottom end'. [103] He emphasised that:

Both of those models, despite the fact that these curves are at different levels, came up with pretty much the same conclusions. Those conclusions were that Australia would be more severely harmed as a result of the independent abatement EU styles of policies that were being proposed at that stage, despite the positions of these curves. The second thing they found was that emissions trading would help Australia achieve emission reduction targets at a much lower cost than would independent abatement. [104]

3.86 Mr Tulpule noted:

At a global level, modellers everywhere are worried about how you model technological change. How do you incorporate this properly into greenhouse models in order to be able to assess the sorts of policies that governments are now actually putting on the table, which are to do with R&D - especially in the United States - and which are to do with technological improvements? [105]

3.87 Ms Eileen Claussen, President of the Pew Center on Global Climate Change also pointed out that: `[m]any of the economic models that are used to develop the cost estimates are unrealistic' [106] and that `different countries have interpreted the language in the treaty differently, and this has affected their assessment of whether and how they will be able to reach their targets'. [107] Ms Claussen suggests that there is a clear need to `renegotiate the targets or the timetables'. [108]

Recommendation 4

The Committee recommends that future work undertaken by ABARE on the economic impact of climate change and greenhouse gas abatement should:

• be subject to wide-ranging peer review to ensure open and objective reporting; and
• incorporate opportunities for low cost and negative cost abatement.

(Chapter 3 - Part b)

 

Footnotes

[1] Prime Minister's Science, Engineering and Innovation Council, From Defence to Attack: Australia's Response to the Greenhouse Effect, 25 June 1999, p 3.

[2] See appendix 3 of the report for key dates in the climate change negotiation process.

[3] unfcc.de/resource/iuckit/fact17.html (17/07/00), p 1.

[4] The key events were the Villach Conference (October 1985), the Toronto Conference (June 1988), the Ottawa Conference (February 1989), the Tata Conference (February 1989), the Hague Conference and Declaration (March 1989), the Noordwijk Ministerial Conference (November 1989), the Cairo Compact (December 1989), and the Bergen Conference (May 1990), unfcc.de/resource/iuckit/fact17.html (17/07/2000), p 1.

[5] greenpeace.org/~climate/politics/reports/conferences.html (18/07/00), p 1.

[6] unfccc.de/resource/process/components.response/landmarks.html (17/07/000, p 1.

[7] United Nations General Assembly Resolution 45/212.

[8] unfcc.de/resource/iuckit/fact18.html (17/07/00), p 1 (also see /fact17.html).

[9] Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, pp 115-17.

[10] Cited in Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, p 37.

[11] Cited in Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, p 37.

[12] Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, pp 39-40.

[13] unfcc.de/resource/iuckit/fact18.html (17/07/00), p 1.

[14] Conference of the Parties established as the supreme body of the Convention responsible for: periodically reviewing the obligations of the Parties and institutional arrangements under Convention; promoting and facilitating the exchange of information on measures adopted by the Parties to address climate change and its effects; promoting and guiding the development of comparable methods for preparing inventories of greenhouse gas emissions by sources and removals by sinks; and establishing subsidiary bodies necessary or the implementation of the Convention (B Graham, M Hinchy, B Fisher and V Tulpule, Climate Change Negotiations – the Kyoto Protocol, Outlook 98, Proceedings of the National Agricultural & Resources Outlook Conference, Commodity Markets and Resource Management, Volume 1, 3 – 5 February 1998, ABARE, Canberra, 1998, p 67).

[15] unfccc.de/resource/process/components.response/landmarks.html (17/07/00), p 1. As at 20/07/98 the Convention has been ratified by 175 countries and the European Union, unfccc.de/fccc/conv.

[16] Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, p 47.

[17] Greenpeace, Guide to the Kyoto Protocol, Greenpeace International, October 1998, p 3.

[18] United Nations, The International Response to Climate Change, Climate Change Information Kit, Climate Change Information Sheet 17, unfcc.de/resource/iuckit/fact17.html (17/07/00), p 2.

[19] greenpeace.org/~climate/politics/reports/conferences.html (18/07/00), p 2.

[20] `Anthropogenic (human) sources of six greenhouse gases are to be included in national greenhouse gas emission inventories, including emissions from land use change. However, for the purposes of calculating the base period inventory, emissions form land use change are not included when defining the emission targets unless land use changes were a net source of emissions in 1990. The six greenhouse gases covered by the Protocol are carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride' (Frank Jotzo, Edwina Heyhoe, Kate Woffenden, Stephen Brown and Brian Fisher, Kyoto Protocol: Impact on developing countries and some implications for the design of the Kyoto mechanisms, Outlook 2000, Proceedings of the National Outlook Conference, Natural Resources, Volume 1, 29 February – 2 March 2000, ABARE, Canberra, 2000, p 48). The six gases are to be combined in a `basket', with reductions in individual gases translated into `CO2 equivalents' that are then added up to produce a single figure (unfcc.de/resource/iuckit/fact21.html (17/07/00), p 1). Countries also have a choice of baselines for the synthetic gases, 1990 or 1995.

[21] The Protocol provides in principle for the establishment of `bubble' arrangements between any group of Parties that choose to fulfil their commitments jointly. It also requires transparency in the way particular bubbles may operate… . [These] Parties, such as those comprising the European Union, may fulfil their (aggregate) commitments jointly (as a `bubble'). In the event of the European Union not meeting its aggregate Kyoto commitment, each member party will be responsible for meeting the target inscribed for it in its instrument of ratification (Frank Jotzo, Edwina Heyhoe, Kate Woffenden, Stephen Brown and Brian Fisher, Kyoto Protocol: Impact on developing countries and some implications for the design of the Kyoto mechanisms, Outlook 2000, Proceedings of the National Outlook Conference, Natural Resources, Volume 1, 29 February – 2 March 2000, ABARE, Canberra, 2000, p 49).

[22] greenpeace.org/~climate/politics/reports/conferences.html (18/07/00), pp 2-3.

[23] Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, pp 118 and 155.

[24] Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, pp 156-57.

[25] Intergovernmental Panel on Climate Change, IPCC Second Assessment Synthesis of Scientific-Technical Information Relevant to Interpreting Article 2 of the UN Framework Convention on Climate Change, clause 2.7.

[26] Prime Minister's Science, Engineering and Innovation Council, From Defence to Attack: Australia's Response to the Greenhouse Effect, 25 June 1999, p 3.

[27] Prime Minister's Science, Engineering and Innovation Council, From Defence to Attack: Australia's Response to the Greenhouse Effect, 25 June 1999, p 3.

[28] Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, p 158.

[29] Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, p 255 (US ratification) and pp 103-07.

[30] Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, pp 122-24.

[31] `Annex I Parties may trade among themselves emission reduction units (ERUs) resulting from projects aimed at reducing anthropogenic emissions by sources or enhancing anthropogenic removals by sinks of greenhouse gases in any sector of the economy… . Such projects have to provide a reduction in emissions or an enhancement of removals by sinks additional to any that would otherwise occur... . The ERUs may not be acquired if such action is not in compliance with obligations under Articles 5 and 7. … The ERUs are to be supplemental to domestic actions for the purposes of meeting commitments under Article 3' (Peter Cameron, `From Principles to Practice: the Kyoto Protocol', Journal of Energy & Natural Resources Law, 18(1), February 2000, p 1-18 at p 8).

[32] greenhouse.gov.au/pubs/factsheets/fs_cop5.html (17/07/00), p 3.

[33] `The operational details surrounding the CDM have yet to be negotiated. To qualify as a CDM project, the project activity must result in reductions in emissions (removal of carbon dioxide by sinks) that are additional to any that would occur in the absence of the certified project activity… . Under the CDM, the certified emission reductions (CERs) obtained from the year 2000 onward can be used toward meeting Annex B emission reduction targets in the first commitment period… . The Protocol stipulates that a share of the proceeds from the CERs will be used to cover administrative expenses and to assist developing countries that are particularly vulnerable to the adverse effects of climate change to meet the costs of adaption (Article 12.8)' (Frank Jotzo, Edwina Heyhoe, Kate Woffenden, Stephen Brown and Brian Fisher, Kyoto Protocol: Impact on developing countries and some implications for the design of the Kyoto mechanisms, Outlook 2000, Proceedings of the National Outlook Conference, Natural Resources, Volume 1, 29 February – 2 March 2000, ABARE, Canberra, 2000, p 61).

[34] Peter Cameron, `From Principles to Practice: the Kyoto Protocol', Journal of Energy & Natural Resources Law, 18(1), February 2000, p 1-18 at p 8.

[35] Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, pp 135 and 202 ff.

[36] Peter Cameron, `From Principles to Practice: the Kyoto Protocol', Journal of Energy & Natural Resources Law, 18(1), February 2000, p 1-18 at p 9.

[37] Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, pp 87-102; Kyoto Protocol to the United Nations Framework Convention on Climate Change, December 1997, Articles 6, 12 and 17.

[38] unfccc.de/resource/process/components/response/respkp.html (17/07/00), pp 1-2.

[39] Proof Committee Hansard, Canberra, 9 March, 2000, p 3.

[40] ABARE, Submission 106, p 880.

[41] Australian Greenhouse Office, Submission 169, p 1685.

[42] Statement by the Prime Minister of Australia, the Hon John Howard, Safeguarding the Future: Australia's response to climate change, 20 November 1997, http://www.greenhouse.gov.au/ago/safeguarding.html (17/07/00).

[43] Statement by the Prime Minister of Australia, the Hon John Howard, Safeguarding the Future: Australia's response to climate change, 20 November 1997, http://www.greenhouse.gov.au/ago/safeguarding.html (17/07/00).

[44] Australian Greenhouse Office, The National Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse Response, 1998, pp 31-37.

[45] Australian Greenhouse Office, Submission 169, p 1687.

[46] isr.gov.au/resources/netenergy/greenhouse/partnerships/index.html (04/09/00), p 3.

[47] Australian Greenhouse Office, Submission 169, p 1687.

[48] AusAID, The Overseas Aid Program and the Challenge of Global Warming, 1999, p 2.

[49] The GEF is the financial mechanism of the Framework Convention on Climate Change.

[50] Australian Greenhouse Office, Submission 169, p 1686.

[51] Australian Greenhouse Office, Submission 169, p 1687.

[52] Michael Grubb, The Kyoto Protocol: A Guide and Assessment, The Royal Institute of International Affairs, London, 1999, p 27.

[53] Proof Committee Hansard, Canberra, 16 August 2000, p 901.

[54] Using official totals for 1995 supplied to the UN by the 35 Annex B (industrialised) Parties to the Kyoto Protocol, the Australia Institute calculated that Australia had the highest emissions per capita at 26.7 tonnes: `this is twice the level for all other wealthy countries (13.4 tonnes) and 25 per cent higher than emissions per person in the US (21.2 tonnes). While the US has higher emission per capita from energy (20.6 tonnes compared to Australia's 17.6 tonnes), Australia has much higher levels of emissions from agriculture and land-use change', (The Australia Institute, Submission 79, p 2).

[55] United Nations General Assembly, Executive Summary of the National Communication of Australia, 26 October 1995, A/AC.237/NC/4, p 3. See also Department of Foreign Affairs and Trade, Australia and Climate Change Negotiations, An Issues Paper, September 1997, pp 4-6 at dfat.gov.au/environment/climate/accn/overview.html (02/02/00); Australian Greenhouse Office, Submission 169, p 1682; and The National Greenhouse Strategy: Strategic Framework for Advancing Australia's Greenhouse Response, Australian Greenhouse Office, Canberra, 1998, p 100.

[56] The Australia Institute, Submission 79a, p 583.

[57] The Australia Institute, Submission 79e, p 2311. The Institute explained that: `The phrase `common but differentiated responsibilities' was first used in the Framework Convention and reiterated in the Berlin Mandate'. However, the Institute pointed out that: `the phrase referred to the `common but differentiated responsibilities and respective capabilities between developed and developing countries. It is important to recognise this because the Australian Government used the phrase to give legitimacy to its differentiation argument in the lead-up to the Kyoto Conference. This was intended to give the impression that the Framework Convention and the Berlin Mandate provided the principle on which the Australian case was based. This was a misuse of the wording of the Convention for it was never understood to apply to `differentiated responsibilities' among the rich countries'.

[58] United Nations General Assembly, Summary of the report of the In-Depth Review of the National Communication of Australia, 14 December 1995, FCCC/IDR.1(SUM)/AUS, p 2.

[59] Department of Resources Development (WA), Submission 67, p 502.

[60] Proof Committee Hansard, Perth, 17 April 2000, p 522.

[61] Proof Committee Hansard, Perth, 17 April 2000, pp 522-23.

[62] Proof Committee Hansard, Canberra, 10 March 2000, p 75.

[63] Proof Committee Hansard, Canberra, 9 March 2000, p 2.

[64] Proof Committee Hansard, Melbourne, 21 March 2000, p 195.

[65] Proof Committee Hansard, Melbourne, 20 March 2000, p 161.

[66] Proof Committee Hansard, Melbourne, 20 March 2000, p 162.

[67] Senator the Hon Robert Hill, Opening Address to the Insurance Council of Australia's Canberra Conference, 10 August 2000, Department of the Environment and Heritage, Media Release and Speeches, environment.gov.au/minister/env/2000/sp10aug00.html (13/08/00), p 3.

[68] Senator the Hon Robert Hill, Opening Address to the Insurance Council of Australia's Canberra Conference, 10 August 2000, Department of the Environment and Heritage, Media Release and Speeches, environment.gov.au/minister/env/2000/sp10aug00.html (13/08/00), p 3.

[69] Senator the Hon Robert Hill, Opening Address to the Insurance Council of Australia's Canberra Conference, 10 August 2000, Department of the Environment and Heritage, Media Release and Speeches, environment.gov.au/minister/env/2000/sp10aug00.html (13/08/00), p 4.

[70] Australian Conservation Foundation, Submission 191, p 2015.

[71] Proof Committee Hansard, Canberra, 22 June 2000, p 686.

[72] Australian Greenhouse Office, Media Release, National Greenhouse Gas Inventory for 1998 released, 13 July 2000, greenhouse.gov.au/media/nggi98.html (21/07/00), p 1.

[73] Prime Minister's Science, Engineering and Innovation Council, From Defence to Attack: Australia's Response to the Greenhouse Effect, 25 June 1999, p 2.

[74] Proof Committee Hansard, Sydney, 23 March 2000, p 444.

[75] Climate Action Network Australia, Submission 193, p 2033.

[76] The Australia Institute, Submission 79a, p 584.

[77] The Australia Institute, Submission 79e, p 2312.

[78] Professor Ian Lowe, Griffith University, gave evidence before the Committee in a private capacity.

[79] Proof Committee Hansard, Brisbane, 26 May 2000, p 559.

[80] The Australia Institute, Submission 79a, p 579.

[81] The Australia Institute, Submission 79a, p 580.

[82] The Australia Institute, Submission 79a, p 581.

[83] The Australia Institute, Submission 79a, p 583.

[84] The Australia Institute, Submission 79a, p 580.

[85] The Australia Institute, Submission 79e, pp 2313-14.

[86] Proof Committee Hansard, Canberra, 23 June 2000, pp 819-20.

[87] Proof Committee Hansard, Canberra, 23 June 2000, p 559.

[88] The Australia Institute, Submission 79e, pp 2315.

[89] The Australia Institute, Submission 79e, pp 2316.

[90] The Australia Institute, Submission 79e, pp 2317.

[91] Proof Committee Hansard, Canberra, 16 August 2000, p 899.

[92] Senator the Hon Robert Hill, Opening Address to the Insurance Council of Australia's Canberra Conference, 10 August 2000, Department of the Environment and Heritage, Media Release and Speeches, environment.gov.au/minister/env/2000/sp10aug00.html (13/08/00), p 4.

[93] `The Global Trade and Environment Model (GTEM) is derived from the MEGABARE model and the GTAP model. The most significant features that distinguish GTEM from MEGABARE are the extended coverage of greenhouse gas emissions, the inclusion of interfuel substitution and emission reduction responses in noncombustion greenhouse gases… . Global computable general equilibrium models such as GTEM have the capacity for estimating the impacts of international climate change policies on key economic variables and emissions. The economic variables considered include the prices of consumer goods and inputs into production, sectoral and regional output, trade and investment flows between regions and, ultimately, national income and expenditure levels in Annex B and non-Annex B regions (Cain Polidano et al, The Kyoto Protocol and Developing Countries: Impacts and implications for mechanism design, ABARE, 2000, p 74).

[94] Proof Committee Hansard, Canberra, 16 August 2000, p 900.

[95] Proof Committee Hansard, Canberra, 16 August 2000, p 903.

[96] Proof Committee Hansard, Melbourne, 21 March 2000, p 230.

[97] Proof Committee Hansard, Melbourne, 21 March 2000, p 230.

[98] Proof Committee Hansard, Canberra, 23 June 2000, p 820.

[99] Proof Committee Hansard, Canberra, 23 June 2000, p 821.

[100] Proof Committee Hansard, Canberra, 23 June 2000, p 825.

[101] Proof Committee Hansard, Canberra, 23 June 2000, p 825.

[102] Proof Committee Hansard, Canberra, 16 August 2000, p 891.

[103] Proof Committee Hansard, Canberra, 16 August 2000, p 896.

[104] Proof Committee Hansard, Canberra, 16 August 2000, p 891.

[105] Proof Committee Hansard, Canberra, 16 August 2000, p 901.

[106] Eileen Claussen, President of the Pew Center on Global Climate Change, Kyoto – the best we can do or fatally flawed?, Royal Institute of International Affairs Conference, London, 20 June 2000, p 40.

[107] Eileen Claussen, President of the Pew Center on Global Climate Change, Kyoto – the best we can do or fatally flawed?, Royal Institute of International Affairs Conference, London, 20 June 2000, p 5.

[108] Eileen Claussen, President of the Pew Center on Global Climate Change, Kyoto – the best we can do or fatally flawed?, Royal Institute of International Affairs Conference, London, 20 June 2000, p 7.