Australia's reluctance to ratify the Kyoto Protocol is hurting business

Whether or not the Australian Government ratifies the Kyoto Protocol has far-reaching consequences for Australia’s environment, industries, trade development and growth.

Our involvement or absence could significantly impact on the flow of trade and investment to Australia.

The Federal Government will not ratify the protocol until the economic impact of doing so is fully assessed.

Yet business is becoming increasingly concerned about the potential adverse implications of not ratifying and being isolated from the rest of the global economy and international processes.

The European Union and media have been reminding Prime Minister John Howard of this prospect during his visit there this week.

The Kyoto Protocol refers to an international agreement or treaty developed under the United Nations Framework Convention on Climate Control to reduce greenhouse emissions to agreed targets.

It establishes commitments to limits on the emissions that developed countries produce and sets out ways to achieve them such as trading carbon credits.

The practical details were refined and concessions on limiting greenhouse emissions were made to several countries, notably Russia, Japan and Australia last year.

Developed countries have committed to reduce greenhouse gas emissions by about 5 per cent of 1990 levels by 2010. Australia is permitted to increase its emissions by 8 per cent by 2010-12 and won other concessions such as allowances for land clearing and carbon sinks.

The developing countries, including China and India, were not allocated limits on emissions in the protocol despite predictions that their emissions will exceed those from the developed economies by 2008.

The Bush Administration has stated that the US will not ratify the protocol over concerns about the impact on its economy and will pursue its own greenhouse gas emission reduction program through energy efficiencies and technology advances.

In the past few weeks, the European Union and Japan became the latest to sign up, while Russia and Canada are expected to ratify within the next few months.