PM: Today, the Minister and I have launched an Australian Global Carbon Capture and Storage Institute. This Global Carbon Capture and Storage Institute, to be located in Australia, forms a core part of the Government's climate change strategy and a core part of dealing with Australia's future environmental and economic challenges.
If you go to climate change, coal fired power stations globally represent about 40 per cent of the problem. Therefore, we have got to deal with that, not just for the next year or two but out for the next decade and beyond, out to the middle of the century.
Look at the future plans of China and India, so much of it depends on the future of, their dependency on coal fired power stations. So the practical challenge is what are we going to do about it.
And part of the practical response lies in carbon capture and storage. This technology or technologies, because there is a group of four of them, best known, have been out there in the scientific community and partly in the corporate community for some time.
But the problem is this, as of 2008 worldwide there is not, to the best of our knowledge, a single at-scale integrated carbon capture and storage project in the world. This is a massive problem. The G8, a meeting that I attended in Hokkaido only a few months ago, has committed itself to 20 at-scale projects by 2020, and for those to have been commenced by 2010, which is only a couple of years from now.
As we have examined this over the last three to four months, the Minister and myself and our departments and our advisers working with other governments around the world have not yet identified a dedicated machinery to turn that vision into reality.
That is, to bring these projects into reality.
And that is why this global carbon capture and storage institute of ours comes into being. What is it to do? Four things: Firstly to make sure that we can facilitate those projects in reality by in part assisting with the organisation and finance for them, ideally through private consortia but leaving open the possibility of public participation as well.
And the reason for that is, and we had a discussion on this with industry just before, the start-up costs for movers in this industry are huge. That partly explains why that so few at-scale projects in any of the technologies across the world at present, and non in multi-integrated technologies at present.
So the first function is to facilitate projects. And in part, that will mean the organisation of finance and, if necessary, government participation in it as well.
The second is to ensure that we have a dedicated and integrated research capacity. There is so much going on around the world which is not coordinated, it's time this was brought under a single roof. That is, for Austalia to be the go-to place globally for information about how you do carbon capture and storage projects.
We have a lot of good expertise out there at the moment with the CSIRO and the CO2 coordinated research centre. But we need to make sure that the global pool of knowledge is brought together as well.
Third thing is to make sure that we're also the go-to place on regulatory and legislative questions. The work Martin has done in the last few days in bringing in the legislation to parliament on the off-shore storage legislation is really important. It's world first. And around the world the big debate at the moment (inaudible) what sort of regulation and legislation you need for on-shore and off-shore storage to make these projects work.
And finally, communication. To get all the information on where projects are, how they could be financed, what the technology is, what the science is, and what the regulatory information is and how it can be deployed, making sure that is disseminated across the world.
If I could just conclude with this. Climate change is a threat for the future. It is a threat also for the future of our coal industry in Australia. Therefore, we need to act on it. Not enough has been done globally on this. This proposal from Australia is our effort to close that gap. And therefore, it is the proposal that I'll be taking as the cornerstone of my address to the United Nations General Assembly next week. Because we need to get buy-in from other governments. We also need to get buy-in from global corporations to turn this into reality.
Overnight, we had one letter from the British Government, from the British Prime Minister, indicating his full support for this initiative. That's one government. We've got a lot more to do and our officials have been at work for some months with other governments around the world. There is much more to be done. Over to you Martin.
FERGUSON: Thank you.
Australia is one of the world's energy superpowers. We are rich in coal and rich in gas.
In the fight to reduce CO2 emissions, Carbon Capture and Storage therefore is bread and butter to Australia and bread and butter to the global community.
We are also a nation which has got to lead and invest in technology so as to solve the problems that confront the world from an environmental point of view and also guarantee our economic future because coal is our most valuable export as a nation.
It's the lifeblood of not only our national economy but also key regional communities around Australia. That's why in the context of technology we have to put all shoulders to the wheel and the feedback from industry today with respect to the leadership position adopted by the Prime Minister in initiating this global carbon capture and storage was very, very positive.
The discussions today were not only attended by representatives of our electricity generators - and you shouldn't forget that 80% of Australia's electricity actually comes from coal fired power stations - but also key coal industry companies such as Xstrata, BHP and Rio Tinto.
In addition to their very strong endorsement we also received absolute support from the scientific community, representatives of the environmental non government organisations such as the WWF, the Climate Institute and also key representatives of the labour force working in these activities such as the CFMEU and the AWU.
I simply want to say from our nation's point of view we have to be at the forefront of putting in place both domestically and internationally solutions to carbon capture and storage. Obviously we have been making progress, we have already got the world's biggest carbon capture demonstration plant in the Otway in Victoria. That has the support of the Australian Government, the Victorian Government, industry and the scientific community.
We are also hopefully soon to be the first nation in the world to actually put in place offshore carbon capture and storage legislation. It passed the House of Representatives yesterday afternoon, it will soon move into the Senate and I have come a long way in terms of my engagement with the Opposition and we are very close to reaching agreement hopefully with respect to a couple of outstanding issues which will enable that legislation to pass the Senate.
I simply want to say that as an energy superpower it's our responsibility to lead and our global institute is about pulling together the global community to actually focus in a proper way in putting in place key demonstration plants sooner than later.
PM: Just to conclude before taking your questions. Australia is the world's largest coal exporting country. Therefore this is core business for Australia to provide global leadership on carbon capture and storage, that's what we are doing.
Over to you.
JOURNALIST: Prime Minister, doesn't this Institute in terms of the international negotiations also take a little bit of the pressure off Australia in terms of the targets it sets and the ETS it establishes in the early stages?
PM: Well our intention with these projects of course is to reduce greenhouse gas emissions and therefore in terms of meeting our long-term targets that's part and parcel of the process.
Just talking to some of the industry guys inside - plainly, this is a core pillar of the Government's overall climate change strategy. The Carbon Pollution Reduction Scheme, energy efficiency, renewable energy. But with this sector, which represents such a huge slice of electricity generation in Australia, 80 per cent plus, and such a huge slice globally, this is an important area to achieve real results. And it is, to go to the core of your question, it therefore assists if we get it right in bringing down our carbon emissions much earlier.
JOURNALIST: Prime Minister, how many of these projects do you expect to be in Australia and by when if you are looking at fast tracking it from the G8 date?
PM: Look, our objective is to have the global Carbon Capture Storage Institute up and running from January next year. That's our ambition. And this is quick given the amount of time pulling an organisation together that involves the participation not just of government, but industry, and other associations, and also foreign governments as well. That's what we intend to do.
Secondly in terms of Australian projects, that is what the institute will assist in determining. But can I say, look across Australia. You've got the La Trobe Valley, you've got the Hunter Valley, you've got the Queensland coal fields. Here are important areas where we need to be looking in terms of bringing up at-scale projects.
JOURNALIST: Where will it be based?
PM: Yet to be determined, it'll be in Australia.
JOURNALIST: (Inaudible) the industry, quite a few (inaudible). Are they spending enough money on advancing these technologies because you're going out of your way to help preserve their profits - shouldn't they be doing this?
PM: What I said in our last gathering with industry, and Martin and I sat down with industry representatives initially on this at CEO level last week (inaudible). What I said to them is that this is a threat, an economic threat to the nation, an economic threat to your industry, and that's why we've all got to have skin in this game. And we mean that.
JOURNALIST: (Inaudible)
FERGUSON: (Inaudible) I have established a low emissions coal council. That will begin meeting today, which brings together those representatives. The Prime Minister also announced yesterday a task force going to actually doing the necessary work to establish where we can actually sequest the carbon.
In terms of industry, can I say, they understand the need to do more. But they wanted some leadership. They have responded positively in our discussions last Friday and today. Basically they are on board, they needed someone to pull it together because all around the world people were talking about this but no one was pulling it together. We will be working closely with the International Energy Association, we have already indicated to them that we are prepared to take this lead.
But also, which is part of the international activities pulling together more closely with the carbon sequestration leadership forum.
The industry knows this is about investing in their future, and they are very supportive of the Government's initiative.
PM: Matthew, just to finish on that point. The truth is, some are and some are not. I think what they all recognise from our discussions last week is that they all need to do more and they have all said to us that they are crying out for national and global leadership on this. This has been a litany of good intentions around the world. This has been an exercise where there are so many aspirational statements out there that you could pack them in the boot of your car and still have room left over. I mean, they're all there.
But I don't see any machinery to make it work. Because of the gap, the investment gap, involved in first movers at large scale projects. And that's where Government has got a role to play.
JOURNALIST: It's no doubt a worthwhile project. But just making a broader point that in the ten months of your Prime Ministership you've progressed from local committees to national summits to regional forums and now a global institute. All you've got left is an intergalactic symposium. What would you say to pensioners who would say they don't want their Prime Minister in New York next week, but here with the parliament sitting, representing them and doing something for them in these troubled times?
PM: The challenge of climate change is real. It affects everybody. If we don't get this one right, it affects the economy and jobs. We're talking about Australia's largest export here, which generates tens of billions of dollars worth of revenue each year. And let me tell you, we the public revenue, benefit from that hugely.
I'm on about long term protection of the revenue base. That's the first thing.
The second is that while in the United States I will be meeting with the UN's economic regulators about the global financial crisis, and with other global leaders on it. And the reason is, this is by it's very definition, a crisis which whereby the impact in one institution rapidly ricochets across the world. The amount of time the Treasurer and I have spent on the phone in recent days talking to people in other parts of the world has been huge. In my meeting, for example, with the Chairman of the New York Federal Reserve, key questions which I will be talking about is what is the prognosis? Are there any other concerns across the system? If so, where? And what can be done to prepare? And you know something, that's a very bread and butter concern for Australians.
JOURNALIST: Isn't that what the regulators have been doing on a daily basis? (Inaudible)
PM: That sort of information exchange occurs at different levels. But you know something, when the time comes that you also need some action taken somewhere, you've also got to be able to pick up the phone directly, or speak to people directly, about what needs to be done quick smart.
So, information gathering is one thing, getting action in defence of Australia's financial institutions is another. And that's why it's really important.
Also I'd draw your attention to a comment made just the other day on this particular question where, I think someone else said recently in terms of their presence in the United States:
“There is a very great concern about the situation here in America, and that's really the reason I'm here. The security for mortgages, for homes, for jobs of Australians are dependent in large measure on international developments coming out of the United States. To this credit crisis. Which is why it is important for me as Shadow Treasurer to be there.” That was by Mr Turnbull earlier this year.
The truth is, it's a global financial crisis. We're all engaged. My job as Prime Minister is to act in the national economic interest and those three days in the United States, that's exactly what I'll be doing, both on the global financial crisis, but also on concrete action on climate change.
JOURNALIST: You seemed to suggest on radio this morning that Australia could face a difficult 2008, but things could get better on the economy in '09. I'm not sure if I heard that correctly, but do you think this global shakeout hasn't got a long way to go? And what concrete grounds do you have in suggesting that next year could actually be (inaudible)
PM: What I did this morning was respond to an interviewer's question about how long this crisis would take to wash through. And therefore, what the long term prognosis for the real economy was, was simply cite statements by the Head of the IMF Strauss-Kahn, who pointed to a recovery of sorts in 2009. The head of the IMF I've spoken to a few times before, has historically been pretty dark about how the global economy was going to go when I spoke to him first in Washington earlier this year. Much darker than many other people I have spoken to. I noted therefore carefully what he had to say most recently about the prognosis for 09.
But you know you can't put a time limit on this, you just can't but it's important to be balanced in our statements. There are real problems across the global financial markets now, we all know that. But in Australia we must also focus equally and emphasise equally the underlying strengths of this economy and the elements of that strength as well.
JOURNALIST: Given that you and Malcolm Turnbull are both now quoting Malcolm Turnbull. This morning he said that he wanted a bipartisan approach to the economy; he is willing to sit down with you at anytime. Are you also in lockstep with him on that?
PM: Can I say that if there is to be an act of bipartisanship, it can start very close to here, about 100 metres or so that way and slightly over there it is called the Senate. $6 billion worth of bipartisanship.
I notice that someone said this morning that $6 billion actually wasn't much money. Well can I say it is. If you want for example to fund long-term reform of pensions and of retirement incomes policy in Australia, $6 billion is not a piece of loose change, it's a lot of money. So a good test of bipartisanship is unblock the Budget measures in the Senate, very simple.
JOURNALIST: In Afghanistan, were Australian soldiers involved in the death of a Governor in the Southern Province that you know of?
PM: My advice is that the ISAP, International Security Assistance Force and the Government of Afghanistan are currently involved in an investigation of this incident. The facts are unclear at this stage according to my advice. As soon as they become clear then we will have something further to say.
JOURNALIST: Is help for pensioners which you've promised next year some time in jeopardy if parliament doesn't pass the measures proposed by the government in the Senate?
PM: Can I just say Governments rely upon predictability of their finance. And the measures that we have got blocked in the Senate are reasonable measures and if the Liberal party was being responsible they would enable those measures to be used to fund other reform programs. And I have got to say there are a range of those which we need to do, pensions and retirement income policy is one of them. But there are many other areas as well and I would again appeal to the Liberals in the Senate to cease being economically irresponsible and start being responsible, unblock those measures because the reform programs which the Government has committed to are substantial and they are expensive.
JOURNALIST: (inaudible). Have you received any advice on what that impact might be and are you having to look at any early trimming of Budget spending figures?
PM: I think that question had best be directed to the Treasurer. I think I would say by way of general principle that when you have a softening of global economic growth and a softening of Australian economic growth, that obviously that will have some impact on Government revenues over the course of the financial year.
But I would suggest you put that specific question to the Treasurer.
JOURNALIST: Mr Rudd, Mr Ferguson mentioned before that there is already a carbon sequestration leadership forum. Is it not doing a good enough job, why is this necessary and did you have the power generation sector saying to you we really need this institute you are talking about?
PM: I will turn to Martin as well on this but absolutely. If there is a clarity in calls from industry it's let's get this going, they have made public statements to that effect just now. But it's to close the information gap, it's to identify projects and to organise finance. And to turn all these aspirational statements into reality and that's really important.
Secondly in terms of the existing international bodies and I have made reference to them in the remarks I made before in speaking to industry and other representatives - a lot of good work's going on out there, but you know something, it is not very well coordinated.
What we are trying to do is to bring it together not just to make Australia the go-to place for this critical technology for the future, but also to make a real difference in turning a project concept into reality at large scale and do it quick.
FERGUSON: Our global institute is about bringing all sectors together in a coordinated practical way. Obviously there has been some work done to date, but what you really need is to get everyone in the room - Government, the private sector, the scientific communities - to actually turn it into reality.
Hence the need for a global initiative, hence the good support we have received today from industry, the labour force and environmental NGOs, and the positive feedback we have been receiving over weeks and months from our global engagement in terms of the discussions we have had with a range of nations. The Prime Minister has referred to the positive feedback last night from Gordon Brown. I have a departmental officer who is also at this very moment engaged in discussions overseas, for example we had very good discussions in Norway yesterday.
We are pulling it together in one organisation that can actually deliver for a change rather than just talking about it.
PM: Last one.
JOURNALIST: Mr Rudd there has been a lot of concern or analysis about regulations in relation to the global financial issues. I know that your feeling has been that we have got the regulations more or less right. But are you concerned about whether we have got the balance right between promoting long-term investment and (inaudible) short selling for example and the hedge funds. Have you got any concerns about the activities of Hedge funds and the you think that we might need to look at Australia's regulations in order to clamp down on some of those practices?
PM: On the question of short selling the Government welcomes the measures announced recently by the US regulators on that 48 hours ago. I understand that the FSA has done the same in the United Kingdom. In Australia my advice is that some months ago again based on the earlier recommendations of the Financial Stability Forum in which we participate, the Minister Chris Bowen currently has a proposal out with industry on the future of short selling.
We believe that this together with other areas of the financial markets need to be not just closely examined but acted on. Transparency is one set of measures we have referred to already, but as far as short selling is concerned I draw your attention to what Chris Bowen has been doing already and this was well ahead of the developments of the last week or so.
JOURNALIST: (Inaudible) this morning that the Families and Communities portfolio is important but not part of the main action or the main game in politics. What do you think pensioners would think about that given that he is responsible for pensioners?
PM: Well I notice that day in day out the Liberals now talk about pensions - they didn't talk about them last year - now talk about pensions yet the Liberal party spokesman responsible for pensions says it's not important.
I think that speaks volumes about the political opportunism alive in this debate. I mean I find it stunning that Mr Abbott could have said that, but out of the mouth of Mr Abbott often proceeds deep truths about what's really going on in the minds of the Opposition.
Thanks very much.