Address to Carbon Market Institute

Thank you Peter for your invitation to speak at this important event - important because the multilateral decisions countries take here in Lima and next year in Paris are only as strong as domestic policies at home.

Today I will speak about Australia's domestic climate change polices.

Let there be no doubt.

The Australian Government is committed to meeting our 2020 emission reduction target, as we have met the targets we have set in the past.

At the same time as meeting our past targets we have achieved economic growth of 53 per cent while increasing our population by 23 per cent.

Environment and economic aims can co-exist.

For climate policy to be successful over the longer term, these goals must be pursued together. They must be mutually inclusive aims.

This is the underlying principle of Australia's climate change policy.

It is a principle that requires strong partnerships with business in delivering sustainable and enduring climate CHANGE policy.

I appreciate the constructive role that the Carbon Market Institute and its membership have played in the development of the Emissions Reduction Fund.

And I certainly acknowledge the role of the Panellists – from the Australian Industry Greenhouse Network, the International Emissions Trading Association, Baker& McKenzie and BHP Billiton [Correction: Panel participants were: Business Council of Australia, International Emissions Trading Association and Sustainable business Australia. The Carbon Markets Institute facilitated the panel] – in helping develop Australia's climate policy over a number of years.

The centrepiece of the Australian Government's commitment to reduce emissions at home is the Emissions Reduction Fund.

This fund has three elements: Crediting, Purchasing and the Safeguard mechanism. This is how it works:

Emissions reductions that have been independently certified will be credited.

Credited emissions reductions will then be purchased by an independent regulator through auctions. The lowest bids are bought first. And payment will be made under a contract tied to the delivery of reductions.

The third element of the Emissions Reduction Fund is the safeguard mechanism. This will commence from 1 July 2016. It will safeguard public money spent on reductions by setting emissions baselines for large industrial facilities.

Some critics have characterised our approach as a soft grants program.

It is not. We are creating a market and will be procuring certified abatement under enforceable contracts.

It builds on Australia's own experience.

Since 2011, our incentives approach has been reducing emissions in the land sector through the Carbon Farming Initiative, while delivering economic and environmental wins.

This includes native re-vegetation to reduce erosion, improving water quality, and providing habitat for native species.

In Australia's north, savanna fire management is also helping us to reduce emissions, while creating new and valued employment opportunities for Indigenous communities.

The Emissions Reduction Fund expands on this experience and opens up opportunities for emissions reductions across the economy.

New opportunities will be created to clean up power stations and capture coal mine gas, to clean up emissions from waste water and sewerage plants, and to improve commercial building and household energy efficiency.

Adopting technologies that are more energy efficient will, in turn, help reduce the energy costs of businesses and households.

The Emissions Reduction Fund is a constructive approach to climate change that has a direct benefit to both the environment and the community.

It is why the Government made a significant $2.55 billion investment for the fund to purchase low cost, genuine emissions reductions and just to put it in context, $2.55 billion dollars would be the equivalent to the United States investing $25 billion.

The Emissions Reduction Fund has passed through the Parliament, and the first auction will be held in early 2015.

The Government is getting on with delivering what the Australian people asked us to do at the last election.

Alongside the Emissions Reduction Fund, the Australian Government has range of complementary measures. This includes supporting a sustainable renewable energy sector through a goal of achieving a "real" 20 per cent share of Australia's electricity from renewables by 2020.

In 2001, Australia set our first – indeed, the world's first – mandatory renewable energy target.

The 'RET' as it is known, was expanded and extended in 2009 to deliver this 20 per cent share for renewables.

Under this scheme, households and businesses have installed more than two million solar systems and project investors have built more than 5,000 megawatts of large-scale renewable generation capacity.

Renewables produced about 14 per cent of our electricity in 2013.

And by 2020, we are on track to eclipse our target, and produce a full 26 per cent – of all our electricity needs from renewables.

However we are working domestically to set a "real" 20 per cent target in 2020 to restore competitiveness for Australia's industry and to ensure certainty for the renewables sector.

In taking climate action we are also looking at research and development of new technologies and I think our track record speaks for itself.

We support both the environment and business. We support innovation and transformation. We encourage ongoing research and development.

Let me give you two examples.

First Australia's Renewable Energy Agency – known as ARENA – increases renewable uptake and helps make renewable energy solutions more affordable.

It does this by supporting technologies and projects throughout the innovation chain – from research in the laboratory to large scale projects.

ARENA has committed over $1 billion to more than 200 projects.

Industry has matched this investment with more than $2 billion, taking the total investment in renewable energy through ARENA to around $3.5 billion, which is a significant, by any definition, in any Australian industry.

Second, Australia is committed to supporting low emissions technologies through carbon capture and storage (CCS).

CCS is a concrete example of how Australian businesses can drive innovative and smart climate change solutions - both in Australia and other countries.

The Australian Government has committed more than $300 million to low emissions coal technology research and development.

Projects in Australia include the world class geological storage test site in the Otway in Victoria.

And I should mention that the Gorgon LNG facility, in my home state of Western Australia, is well advanced. The Gorgon Project is one of the world's largest natural gas projects and the largest single resource development in Australia's history. AND THIS PROJECT is using best practice in emissions management.

I reiterate that the Australian Government is firmly committed to reducing our emissions to 5 per cent below 2000 levels by 2020.

Next year, we will review our international targets and settings in the context of negotiations for a new global climate change agreement. This review will focus on the real and comparable actions of other countries, including the major economies and our trading partners.

Australia is absolutely committed to playing its role, and to meeting our climate change targets and that is why yesterday I announced that Australia has pledged $200m over four years to the Green Climate Fund bringing the total of that fund to date to an excess of $10 billion which is a significant achievement in anyone's prediction.

We will reduce emissions at the same time as lifting economic growth, increasing productivity and providing better standards of living for our people, and throughout our region.

That is our commitment and that is what we will achieve.

- Ends -