Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

Senator Boswell has raised a number of legitimate questions. There were quite a few polemic debates surrounding some of the questions, but I will attempt to address at least two matters, one of which I have some first-hand knowledge. That goes to the issue of the arrangements for developing countries. This issue was in fact discussed at the recent IMF and World Bank meetings of Treasury and Finance ministers which were held approximately two months ago and at which I represented Australia. I took part in discussions about, firstly, the level of contribution to developing countries and, also, the governance parameters as to how that money would be administered and paid to those countries that would be eligible. I can provide an update from those discussions that were held at the World Bank and IMF meetings. I also understand these matters were considered by the Treasurer, Mr Swan, when he was at a meeting of G20 finance ministers and treasurers in Scotland about four weeks ago. The latest details that I can give you are comments from the Prime Minister himself at the Commonwealth Heads of Government Meeting of 28 November. The Prime Minister outlined Australia’s parameters and principles in our approach to the particular issue that you raised, Senator Boswell. I can refer you to his comments. The Prime Minister said:

One of the proposals which has been advanced by the British Government, and by others, has been for a fast-start fund to assist in overall climate change financing, underpinning an agreement at Copenhagen. Australia today has said that should such a fast-start fund come into being, then it should be governed by the following principles. Firstly, fast-start assistance should represent a substantial increase on existing climate change funding allocations, and use existing distribution channels to ensure fast-start finance is not delayed. Second, focus on the most vulnerable, least developed countries. A large number of these are small island states.

Third, ensure adaptation activities are adequately and transparently funded, separately from mitigation activities. Fourth, to focus mitigation finance on time-critical activities, including reducing deforestation and forest degradation, otherwise called REDD. And fifth, increase the capacity of developing countries to absorb significantly scaled-up climate finance in the post-2012 funding arrangements, including through leveraging private investment flows.

This is the set of five principles that was circulated at the Commonwealth Heads of Government Meeting which the Prime Minister spoke to on behalf of Australia. The Prime Minister further said:

Australia is of the view that such a fast-start fund can assist in bringing about a good outcome at Copenhagen, but most critically, assist those most vulnerable states dealing with adaptation challenges now.

I have already referred to the particular difficulties that small island states face. The Prime Minister further said:

The Association of Small Island States worldwide includes some forty plus States, twenty of whom are here represented at this Commonwealth Heads of Government meeting.

Small Island states in the Pacific and the Indian Ocean and of course here in the Caribbean as well. The particular vulnerabilities facing small island states from climate change is acute. In our own region in the South Pacific, we are particularly mindful of the challenges in Kiribati and Tuvalu …

Elsewhere coastal inundation is also an issue. In fact, for some of these island countries it is a threat to their very existence. The Prime Minister further said:

For these reasons, what Australia has proposed today is that if the United Nations agrees to establish a fast-start fund to assist with adaptation tasks for the most vulnerable states, then five to ten percent of that fast-start funding should be dedicated to small island states.

This is of particular relevance in our own region, where we have states already being directly affected by inundation and other consequences. It is also relevant in the Indian Ocean with states such as the Maldives …

Apparently at CHOGM, the head of government spoke very powerfully about the challenges which his country faces from inundation. I also know from my representative capacities with the Pacific Islands Forum Economic Ministers Meeting and the Pacific Islands treasury and finance ministers meeting that this is an issue of significant focus. Rising sea levels are a threat to the existence of a number of these island states. It was also a matter of discussion at the Pacific Islands finance ministers meeting, again, where I represent Australia.

They are the principles that Australia has outlined with respect to assistance for underdeveloped countries—as you term them, Senator Boswell. It is an important issue because, as I have said, there are many of these small island states who face absolute calamity. To come to your first question regarding the number of permits, at a five per cent cap in 2020, initial permits as at 2011 are estimated to be 450 million. The permits have to be acquitted under the scheme, which means you do not necessarily have to build up a large excess pool.