Interview with Fran Kelly, ABC RN

Fran Kelly: Dan Tehan is the Minister for Trade, Tourism and Investment. Minister, welcome back to Breakfast.

Dan Tehan: Pleasure to be with you, Fran.

Fran Kelly: In the past few hours China and the US has released this statement, a rare statement I think it should be said these days, committing to cutting their emissions further. These are the two biggest emitters and, in the statement, China agreed to phase down coal consumption during the country's next five year plan which starts in 2026.

As Trade Minister, China's our largest coal market, is the writing on the wall for Australia's coal exports?

Dan Tehan: Well, to start with Fran, can I just say this is welcome that the US and China will co-operate in this way, as you've said, as the two largest emitters, it is great to see that both of them are committing to this action. We'll look forward to, obviously, seeing the detail around what is proposed, but this is obviously welcome news.

When it comes to our position on this, obviously, we understand that the world is moving, that the world is transitioning and we understand that that transition is taking place, that's why we're investing in new fuels like hydrogen. We understand that if China is going to look to replace its imports of coal over time that they're going to need new energy alternatives to be able to replace that with, and we want to be part of that picture. And that's why we're putting money into the research and development of hydrogen because we understand that new fuels and new energy sources will be required, and we want to make sure, as the globe transitions, we're very much part of that, and our resources sector will be very much part of that.

Fran Kelly: The climate change envoy for China, Xie Zhenhua, told delegates at Glasgow that China and the US have realised, quote, "We need to take our due responsibility and work together and work with others in the spirit of cooperation to address climate change."

Where is Australia's heightened ambition?

Dan Tehan: Well, our heightened ambition is there in what we're investing to make sure that we work in partnership with other countries to do exactly what China and the US have agreed to do. So, at the moment, we've got, for instance, we're negotiating a green economy agreement with Singapore, we've got partnerships when it comes to technology that will get us to where we need to get to by 2050 with Japan, with South Korea, with Germany, with the UK, with the US.

So, we're very much investing in similar partnerships to make sure that we're developing the technology which will enable us to achieve, as a globe, net zero emissions by 2050.

Fran Kelly: Okay. But what about our public stated ambitions? The draft agreement we've seen released overnight at COP26 urges parties that haven't submitted new or updated 2030 targets to go back to the drawing board and find more emissions reductions and report again in 12 months' time.

Now Australia is one of those countries. It's not a large club, Australia is one of them. Will Australia support that call in the draft communique to revisit and restrengthen and strengthen our midterm target?

Dan Tehan: Well, this is a draft communique, as you…

Fran Kelly: Well, will we argue for that phrase to be kept in or kept out?

Dan Tehan: I'm not privy or party to the ongoing discussions around that draft communique, so we'll wait and see what the final communique has said. But we've made very clear that we will meet our commitment, which is the 26 to 28 per cent reduction by over 2010 figure.

But we've also said that, you know, we also think that we will be able to get to a level of about 35 per cent so we're not only going to meet our target, but we're going to beat our target. You have got to remember…

Fran Kelly: Yeah sure, but the Prime Minister took that position to the COP26 summit and it was not recognised as a formal agreement, and that's why this COP26 is calling on countries, which would include Australia, to come back to the table with increased formal ambition.

Will Australia at least pledge to do that? Rather than try and knock this phrase out of the draft communique, will Australia say, okay, if we are going to meet and beat it, we'll come back next year and we'll commit to 35 per cent, which is still below what scientists are saying is required?

Dan Tehan: Well, once again, as I've said, I'm not privy to these ongoing discussions and negotiations that are going on at the moment, but what we made very clear is when we make our commitments we'll honour them. And our track record when it comes to Kyoto, when it comes to Paris, is that we meet our targets, and in both instances we've beaten them. So, this puts us in a pretty unique club, Fran. Not many other countries have actually been able to sign up and meet and beat these targets.

Fran Kelly: Okay.

Dan Tehan: In both instances. So, we'll continue obviously to…

FRAN KELLY: Not everyone sees it that way though, Minister. I mean earlier in the week here on Breakfast we spoke with the UK's top climate adviser, Lord Deben. He told us that Australia's lack of ambition would be disadvantageous in global trade. Let's hear that.

[Excerpt plays]

Already the British/Australian trade deal is under huge pressure in this country, because we don't see why we should import things from Australia, unless Australia meets the same standards and it does the same things towards dealing with this huge global issue.

Given, you know, COP, 40 states responsible for more than 40 per cent of global aviation emissions have committed to a new decarbonisation target, 30 countries joined in agreement to pursue zero net emission vehicles, an agreement was reached on green shipping corridors. We've now got the draft communique urging countries to come back to the table in a year if they haven't lifted their 2030 targets.

As Australia's Trade Minister, is it naive to think Australia won't be left behind or pay a price in trade terms if we're not seen to do more?

DAN TEHAN: Well, one of the real risks, and I've made this very public ever since I've been Trade Minister, is the protectionist forces will use climate change to try and push their agenda. And I'd say, just on the point that we just heard previously, I hope that that UK commitment would also involve around agricultural subsidies, because we know from land use and agricultural subsidies they count for 25 per cent of global emissions. Yet when it comes to the UK, when it comes to the US, we don't hear anything about the impact of agricultural subsidies on emissions and what they're doing to address this issue, and this is an area where there is 25 per cent of emissions, which basically, at the moment, aren't being dealt with.

So, all of us, all of us, need to play our part and do our bit, and when we target particular sectors we have to understand that there are sensitivities in some of those sectors. But they've got sensitivities as well and they shouldn't just brush over areas where we need to see commitments from them, which will be hard for them, because they use protectionism, obviously, when it comes to agriculture. They don't like moving in that area but we will be there pushing them in these areas as well. This is why these negotiations are very important.

Fran Kelly: Let's go to subsidies, the issues of subsidies. At a virtual APEC meeting on Tuesday night, Ministers including yourself and the Foreign Minister Marise Payne agreed to quote "rationalise and phase out inefficient fossil fuel subsidies" and quote "explore options for a voluntary standstill of subsidies".

What does that mean in practical terms? Fossil fuel subsidies, as the latest figure I could find, costs the Federal taxpayer more than $7 billion annually. What were you agreeing to phase out there in terms of fossil fuel subsidies?

Dan Tehan: Well, what we said— agreed was as APEC countries we would look at this issue. We would look at what the impacts are of these subsidies and look at what are the alternatives that you could use if you were looking to phase them out over time.

So very much the preliminary work to look and see, okay, what are these subsidies that are being used by APEC countries? Which of them, obviously, could you look at? Which are the ones that you might get consensus, remembering that APEC is a consensus-based organisation, that you would look at to see, okay, over time, what might you do to be able to reduce the impact of some of these subsidies.

Fran Kelly: Okay. On another issue, former Prime Minister Paul Keating was at the National Press Club yesterday. He spoke, he criticised the AUKUS submarine deal, which he's done before but also Australia's approach to China. He said we've misread China's expansion of its interest, which he said was to its west along the belt and trade routes between Wuhan and Istanbul, not to the east. And is he right?

Dan Tehan: Look, I didn't hear Paul Keating's address so I have seen the media reports of it. What I would say is that when it comes to the Australian Government what we want to do, obviously, is have very constructive engagement when it comes to China but also, we need to understand that there is a very changed geo-strategic environment in the Indo-Pacific that we are now dealing with. We understand that we need to deal with that from a position of strength as best we can, and that's the approach that we're taking.

Fran Kelly: Okay. Just finally and briefly, in September you said China could not join the new version of the TPP, the Comprehensive Progressive Agreement for a trans-Pacific Partnership, unless it convinced members of its track record of compliance with existing trade agreements and WTO rules. What would Beijing have to do for Australia to allow it to join? Lift the bans and pick up the phone? Is that it?

Dan Tehan: Well, what we want to make sure for any country that accedes to the CPTPP is that they would meet the gold standards that that agreement has. All the countries that came together to negotiate the CPTPP have committed to trade liberalisation and putting the rules in place that you need to adhere to as part of that trade liberalisation process. So, we want to make sure that in spirit and in law any country that joins the CPTPP knows what they're signing up to.

And as part of that they would have to be able to engage on the market access, and the UK is going through the accession process at the moment. We've got to be able to discuss market access at a Ministerial level, it's very complex. There are obviously a lot of sensitivities in dealing with that market access and we think that common sense would dictate that that would have to occur at the Ministerial level given the nature of these trade agreements.

Fran Kelly: Okay. All right. Dan Tehan, thanks very much for joining us.

Dan Tehan: Fran, can I just say, because I don't know whether I'll speak to you again before you leave, but well done on a stellar career at Radio National. It's always been a pleasure to talk to you and good luck with whatever the future may, wherever it may lay.

Fran Kelly: Minister, thank you very much. Thank you.

Dan Tehan: Cheers, bye.