The third annual PACIA Interface Meeting 2011 was held at Parliament House in Canberra on Tuesday 22nd March. The event was strongly attended by more than one hundred senior representatives from industry, government, opposition and the Commonwealth Parliament.
The Hon. Greg Combet AM MP, Minister for Climate Change and Energy Efficiency, addressed the assembled audience regarding the Gillard Labor Government’s plan to place a fixed price on carbon prior to transitioning to an emissions trading scheme. PACIA President Ross McCann, Executive Chairman of Qenos, gave the below remarks on behalf of the Australian chemistry industry.
Parliament House Canberra, Tuesday 22nd March, 2011
Ladies and Gentlemen welcome to the PACIA Interface Meeting at Parliament House. What a great opportunity this is for leaders from the Australian chemistry industry to meet with senior political and departmental decision maker and to discuss important issues for our industry and Australia.
I am especially pleased that tonight we have joining us The Hon. Greg Combet AM MP, Minister for Climate Change and Energy Efficiency. Greg has graciously agreed to join us here tonight, to engage with industry and take us through the Federal government’s policy response to climate change.
We have with us tonight The Hon. Mark Dreyfus, Parliamentary Secretary for Climate Change and Energy Efficiency, The Hon Catherine King, Parliamentary Secretary for Health and Ageing, Senator Christine Milne, Deputy Leader of the Australian Greens; and many members and senators, including those representing other important government and opposition portfolios. We also highly value the very strong senior representation from key government departments across the spectrum government and public policy.
From industry we have representatives from a large number of significant companies including; chemicals manufacturers, raw material suppliers, plastic product manufacturers, importers and distributors, transport and logistics companies and professional services providers to industry.
The theme of the event is ‘The Business of Chemistry’ and it is part of PACIA’s broader program for ‘The International Year of Chemistry 2011’, led globally by UNESCO and IUPAC. I should also mention that today – the 22nd March - is World Water Day and is another important opportunity to showcase our industry’s significant contribution; to ensuring clean and safe access to drinking water and better management of this valuable and increasingly scarce resource.
The International Year of Chemistry is a worldwide celebration of the achievements of chemistry and its contribution to the well-being of mankind. The year aims to increase the public appreciation of chemistry in meeting world needs, encourage interest in chemistry – particularly among young people – and generate enthusiasm for the creative future of chemistry. The year also coincides with the 100th anniversary of the Nobel Prize being awarded to Madame Marie Curie, in recognition of her services to the advancement of chemistry.
As the peak industry body, our particular focus is on ‘the business of chemistry’ in Australia; including primarily the chemicals and plastics sectors. Our aim is to highlight the strategic importance of the Australian industry and ensure that its significant contribution is properly recognised by government, the media and the community.
We have been using this opportunity to raise awareness for what is Australia’s third largest manufacturing industry, with an annual turnover of more than $33.6bn and employing some 83,000 Australians - many in small to medium sized enterprises. We have been promoting the industry as central to the Australian economy and supply chain, given that the industry’s outputs feed directly into almost every other sector of the economy.
The industry provides essential materials to automotive, construction, healthcare and pharmaceuticals, education and information technology, packaging, consumer appliances and many more important sectors.
Climate Change and Carbon Pricing
The timing of the event is particularly important given the Federal Government’s recent announcement that it will be pursuing a pricing system that would start with a fixed price on carbon, followed by a move to a full emissions trading system in several years.
PACIA has long supported action to address the challenge of climate change. We recognise that it is a global problem that requires a global solution; and any response by Australia must take this fact into account.
It is an unfortunate reality that unilateral action runs the risk of imposing greater costs on the Australian economy with little to no net environmental benefit. Therefore policy responses to climate change must be linked internationally. If we agree that this is a global problem, then Australians should not be asked to pay more for abatement than elsewhere.
Above all, we must get the timing and design of any scheme right, and this must be done in a way that recognises what is truly happening around the world.
Should the Government commit to pricing carbon prior to a comprehensive global agreement; that importantly covers all of Australia’s competitors, then appropriate transitional assistance will be critical. Otherwise there is a very real risk of undermining the long-term viability of our industry in Australia.This is driven by the fact that trade in chemicals and plastics is truly global - our competitors are not just Europe and the US, or even China. They are found throughout Asia and the Middle East, and this trend is increasing.
Nearly all PACIA members are highly trade exposed, and yet transitional assistance under the former CPRS model only offered assistance to a section of our members - and at varying rates. This issue will need to be resolved moving forward.
We also stress that this should not be a debate about the capacity of industry to pay, but rather the development of a policy framework that recognises and addresses the reality that we do not have a global agreement and that our industry is already under significant competitive pressure from a range of policy and cost burdens.
Where possible, we are hopeful that chemicals and plastics will continue to be manufactured in Australia. We believe we do it as well, if not better than anywhere else in the world.
Chemistry industry as a solutions provider
I want to stress that we are not an industry looking for a handout. Our industry has a very positive story to tell.
We are strongly focused on reducing our own emissions and our broader environmental footprint - through successful initiatives such as the PACIA Sustainability Leadership Framework and its practical programs.
But much more importantly, the industry is a ‘solutions provider’ and is uniquely placed to contribute to climate change mitigation and adaptation .The industry develops the products and services that reduce greenhouse gas emissions when used by downstream consumers; and the industry is the true industry of ‘green jobs’.
A recent study by McKinsey and Co found globally that for every ton of CO2 the industry emits in manufacturing, our customers save between two and three times the emissions when using these products. And thanks to continuing developments, these emissions savings are growing.
The biggest levers for emissions savings enabled by the industry were found to be; insulation materials, chemical fertilizer and crop protection, advanced lighting solutions, plastic packaging, marine antifouling coatings, synthetic textiles, automotive plastics, low-temperature detergents, energy efficiency, and plastics used in piping. As you can see the products and services that provide the solutions we need will be developed and manufactured by our industry.
I’d like to make one final observation. While my remarks have focused mainly on climate change policy, the industry is engaged in a broad cross section of public policy. This is clearly demonstrated by the attendance here tonight of wide a range of parliamentarians and officials from many departments.
We have key interests in regulatory reform, security, trade, energy and environment policy – as well as innovation, science and research to name a few. It is all too easy to get caught up focusing on a particular area and we must recognise that it is all part of a bigger picture. Each area of policy has a cumulative effect on industry, for better or for worse. Indeed, there is little point in achieving reform in one area if the benefits are immediately negated by another.
However, we are confident that if we can all look at the whole picture and each gain a better understanding of the part we play - then collectively we can make things better. We thank you all for being here tonight and working with us to ensure a vibrant and sustainable industry in Australia.
Ends. Check against delivery.