Monday, 19 August 2002
Hon Pete Hodgson
Speech Notes

Business Leadership On Climate Change

[Address at release of New Zealand Business Council for Sustainable Development guide for NZ businesses on greenhouse gas emissions accounting and reporting, Auckland]

I'm delighted to be here to celebrate the successful completion of this latest phase of your climate change project

You are already providing much-needed leadership and guidance to New Zealand business on the potential business opportunities arising from climate change

Today you are also helping businesses to understand and account for their own greenhouse gas emissions, by producing a practical guide that is both elegant in its design and accessible in its content.

As international markets in emissions emerge it will be important for businesses to understand their emissions and look at ways of reducing them — often to the benefit of their bottom line — or at trading opportunities as markets develop.

The government has been delighted to partner with the NZBCSD on this project and it has been a pleasure working with you. Climate Change is one of those issues where close collaboration between business and government is of mutual benefit.

The government’s intention was to ratify the Kyoto Protocol before the Rio + 10 summit in Johannesburg. As you will have gathered, the election campaign got in the way. It has cost us two or three months. But policy development has been delayed hardly at all, because the public consultation process was not much disrupted.

Officials are currently finalising a series of cabinet papers to nail down our final policy, taking account of the consultation results. The decisions made will provide clarity as to the way ahead - but there will be an ongoing process of policy refinement as the nature of the post-Kyoto world becomes clearer.

So we are still very much on track both to ratify the Protocol and to confirm the general framework of our domestic policy.

There is now some fresh impetus behind the Protocol internationally. As you will recall, the Protocol enters into force once 55 countries, including countries representing 55 percent of developed country emissions in 1990, have ratified.

As of 14 August, 79 countries have ratified the Kyoto Protocol including the 15 member states of the EU, Japan, Norway, Iceland and a number of Eastern European countries. Developed countries that have ratified now total 36 percent of 1990 developed country CO2 emissions. This will shortly rise to 39 percent, with Poland’s Parliament having recently approved ratification.

The Kyoto Protocol would then enter into force following ratification by the Russian Federation. This is expected later this year or early next year, when Russia has completed a domestic ratification process similar to New Zealand’s.

Even those countries close to New Zealand that have said they do not intend to ratify are making some progress.

Australia, at both federal and state government levels, has many worthwhile initiatives under way. Despite its decision not to ratify Kyoto at this time, Australia maintains that it can get close to its Kyoto target. So they will be doing many of the things that we will be doing - although they may face higher costs than New Zealand if they don't have access to Kyoto mechanisms.

The USA has a growing number of large corporates taking on voluntary emissions targets, some under the auspices of the Pew Centre on Global Climate Change, while many state governments are adopting rigorous climate change policies. California, for example, has just passed legislation that will require all new cars sold in the state to meet fleet-average greenhouse gas emission standards.

The New Zealand government fully intends to be part of the concerted international effort to combat global warming.

As the Maui gas field runs out and we move into the post-Maui era, New Zealanders will begin to sense the meaning of a carbon-constrained future. The replacement gas fields will be much smaller. Maui and the associated Think Big developments are coming to an end. We have used that large resource very quickly and it is now all but gone. Non-sustainable resource use has that effect.

Reducing fossil fuel dependence reduces the risks of reliance on something that is intrinsically unreliable. It also creates significant opportunities, as the work of your council has shown.

We commend those businesses in the vanguard of exploring the business opportunities of the carbon-constrained world. I look forward to the next phase of work from the Business Council with keen interest.

Thank you Rodger, Eric and the rest of the business council team, and PricewaterhouseCoopers, for inviting me to this event - and congratulations.

Ends

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