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The Multilateral System and the Environment – Great Expectations and Even Greater Challenges

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Speaker: Mr Peter Woolcott, Australia's Ambassador for the Environment

University of Queensland

Can I thank Ove for this invitation. I regard it as a great honour to have been asked to speak to you today on the multilateral system and the environment.

I came to know Ove when I was asked to coordinate the Federal Government's response to the threat of an 'in danger' listing of the Great Barrier Reef by UNESCO's World Heritage Committee. He is passionate about the Reef and a strong and constructive advocate for its protection.

It is also a great pleasure to follow on as a speaker from Penny Wensley, a former Ambassador for the Environment, Governor of Queensland and boss of mine. Penny, like Ove, continues to play a vital role in helping meet the challenges that confront the Reef.

What I want to talk initially about is the complexity of the multilateral system, the great expectations the public have of it and the challenge it poses for us. I will start with the bigger picture and then zero in on two particular environmental issues that I have been, and continue to be, involved in – climate change and the Great Barrier Reef.

Underpinning what I will say is the view that multilateralism matters enormously. Having spent years in the multilateral trenches I well know that it can be a slow moving and frustrating business. The preference to work through issues bilaterally or in smaller groupings whenever you can is entirely understandable.

However, the array of transnational issues that cannot be addressed without cohesive and widespread international cooperation are confronting: climate change, the oceans, migration and refugees, terrorism, cyber, pandemics and potentially food and water constraints.

Expectations and the demands on the multilateral system have never been greater and this is happening at a time when the very system is struggling to cope.

And multilateral governance is struggling for three primary reasons.

First, the international system is changing dramatically. The diffusion of power as a consequence of the emergence of new powers has challenged both the existing institutional arrangements and the old way of doing business. The global institutions created by the West are under stress.

Twenty years ago, the US and Europe could often dictate the terms of the debate. If they wanted to push something through strongly enough they could do so.

Now it is different. The game has changed.

There are no longer any one or two hegemonic powers and power is shifting to coalitions in a multipolar world.

What are known as the BRICS (China, India, South Africa, Brazil and Russia) have come to occupy critical positions in the system. While other emerging powers like Indonesia, Turkey, Egypt, Pakistan and Nigeria are similarly focussed on occupying a place at the top table and preserving their political and economic freedom of movement.

We are also dealing with a much more fluid ideological landscape. A significant number of these emerging powers want the West's material progress but do not want to sacrifice their own cultural identities and political traditions. The West's vision of modernity and human rights is under challenge. Nationalism, state sovereignty, state capitalism and religious identity are growing forces and are being used to strike at fundamental concepts such as freedom of expression and the responsibility to protect.

Secondly, behind this shift in the power dynamics is the increasing pace of globalisation and the extraordinary wealth transfer from West to East. I will pick this theme up again when we discuss climate change.

And thirdly, not only is there a shift in national power, but there is a shift in the very nature of power. As a result of new communications technologies exemplified by social media – power is moving to coalitions and networks that are able to effectively influence State actions, particularly in liberal democratic societies.

What characterises them is their ability for mass organisation, speed and multiple and diverse actions. And we see this very much in the environmental space.

The strength of these networks, whether they be civil society, sub-national entities or business groupings, will only grow and increasingly questions will arise as to how they should exercise this power and to who they are accountable.

These factors greatly complicate decision making and are putting significant stress on international governance at a time when we need the system to work effectively.

We are seeing work-arounds and the emergence of new groupings such as the G20, the growing significance of regional bodies, and the development of institutions outside the formal UN structures, for example in such crucial sectors as health, with the development of GAVI and the Global Fund.

These groupings can often work more pragmatically and effectively than the UN machinery. They are less driven by ideology and less resistant to change.

But with regard to the big global environmental challenges of climate and oceans we are going to need a global solution.

We have little choice but to tackle the array of environmental issues requiring international solutions through the current multilateral institutions. The onus still has to be on making the multilateral system fit for purpose.

To do this we will need to be strategic, creative and flexible in our approach. To build variable coalitions of interest including, where necessary, outside the formal UN structures, and seek to pragmatically work with the emerging powers.

The Government understands well these changes and pursues our values and interests at all the various tables whether it be the UN Framework Convention on Climate Change or the UN Security Council.

And it does so in a way that is flexible to new ideas and works around the UN's ossified regional group system, such as through our involvement in MIKTA and the G20.

Let me now turn to the two environmental issues I want to address and how we are seeking to play our hand.

In looking at these issues I want to reflect on how the three general challenges I have just outlined – the diffusion of power, economic globalisation and the growing role of non-state actors – plays out.

First – climate change.

The issues do not get any bigger in terms of a collective problem. They engage a complex web of concerns around the growing impact of climate change, the economic structure and competitiveness of nations and concepts of equity and fairness.

Left unchecked it will magnify existing problems and increase pressure on resources including land, water, energy, food and fish stocks. It has the potential to erode development gains, undermine economic growth and compound human security challenges.

The policy responses will require coordinated action in an unprecedented way across economic and ideological divides.

The stakes are high and the multilateral institutional tools at our disposal compromised. Part of the problem is history. In the multilateral setting we tend to rely on the outcomes of old battles, whether they be previously agreed language or previously agreed processes, and ways of conducting ourselves.

This is ok if we are content with incremental progress. But we are not and we need to change the very basis in which we address climate change.

The global community first started to tackle climate change with the creation of the UN Framework Convention on Climate Change – the UNFCCC. The Convention took 16 months to negotiate, and entered into force in 1994. The Framework Convention is only that – a Framework. It doesn't obligate any country to take action to address climate change, but it did set up a divide between the developed world and the developing world.

So in 1997 we agreed to the Kyoto Protocol which set binding emission targets for a few select countries. It took two and a half more years to negotiate the details of Kyoto, and eight years to enter into force.

But the Protocol now covers only 13 per cent of the world's emissions. And many big economies never joined, while others which did subsequently walked away.

In Copenhagen in 2009 we tried a third time to reach a multilateral agreement on climate change – but failed again, due in large part to the weight of expectations and poor orchestration.

Our fourth, and current, attempt started in 2011. Countries are aiming to strike a new global climate change agreement. This effort will culminate next month in Paris at the UNFCCC Twenty First Conference of the Parties – or COP21.

What Australia wants from Paris is a strong and effective legal agreement that is applicable to all countries and drives serious reductions in emissions while ensuring economic prosperity. It has to be an agreement that reflects the real world and the way it has changed and continues to change.

We are, however, stuck with an outmoded Convention that divides the world into the developed and the developing country camps (or Annex 1 and non-Annex 1 countries).

And it assigns them very different obligations and responsibilities – all based on GDP levels from 1992. China, Singapore and Korea, for example, are all deemed developing countries for the purposes of climate action.

We have little chance of tackling climate change based on these divisions. Let me reinforce this point with a few statistics – in 1992 only three non-Annex 1 countries (or to put it more simply developing countries) were among the 12 largest emitters.

Today this has risen to seven. Moreover, Non-Annex 1 countries now represent almost two-thirds of total emissions and this will be nearly three-quarters of global emissions by 2030.

Not only is the engineering obsolete, the decision making machinery is cumbersome. The 196 Parties to the Convention must take decisions by consensus.

While it is right that responses to global problems endorsed by most countries have a legitimacy that agreements negotiated among smaller groups lack, the reality in the UNFCCC is that nothing is agreed until everything is agreed, and decisions usually result in lowest common denominator outcomes.

The UNFCCC reflects in a microcosm the problems of the wider UN. We are between multilateral worlds – the old world dominated by the West can no longer dictate nor finance alone the solution. The new world has not yet arrived and the emerging powers are reluctant to take on responsibilities which might compromise their freedom of manoeuvre and economic development.

Success at Paris is not a given. As I said, change is hard. The negotiations have been intense and often unproductive. Brinkmanship will continue into the endgame.

Having painted a fairly gloomy backdrop let me throw some splashes of colour on the canvas – for there is cause for optimism in Paris.

The French have been providing strong leadership as the President of COP 21. They are vertically integrated from top to bottom with a clear message. The horror of what took place in Paris last week will only strengthen this resolve.

This leadership has been matched by the US and China. There is a strong sense that the world's two largest emitters are working collaboratively for an agreement in Paris – although they have slightly different visions as to what that agreement will look like.

These are all critical differences to what unfolded in Copenhagen. There are others –in particular the utilisation of what is the clever strategy of having States announce their Intended Nationally Determined Contributions – that is, their post-2020 emissions targets – before Paris.

To date, 161 countries have announced post-2020 targets, including all of the G20 economies and covers nearly 92 per cent of global emissions.

While they vary in ambition and detail, it is a remarkable achievement and the number will go higher still before we reach Paris.

So the deal in Paris will be built around these nationally determined targets. Let me be clear – Paris is about negotiating agreement text not about negotiating targets.

But in setting targets in this bottom up way we have, in fact, recognised the limits of multilateralism in addressing climate change.

We have recognised that top down multilateralism which imposes emissions targets on countries doesn't work. That if we are to ensure a global, effective and durable solution then we need to set up a system that while it might be self-determined, is subject to public and peer pressure, subject to review and transparency and cognisant of the science.

We have also learnt that a successful climate deal needs participation before ambition. It needs all countries on the same footing for taking action, before we can ramp up that action. It would be pointless to have a deal on paper if the US or China won't sign up.

So the agreement in Paris will be framed by what countries can accept given their national circumstances. For example, we expect that only the obligation to have a target–not the target itself–will be legally binding. An approach that gets around the US' difficulties with treaty ratification.

The international community is, guided by the science, seeking to limit the rise in global temperature to below 2 degrees Celsius.

Now there is no expectation that Paris will show that we are on track for the below two degree goal. The reputable NGO, Climate Tracker, has in fact said that should all the INDCs be implemented as is, we would be on a 2.7 degree pathway.

But what we want the agreement to do is set out a strategy to build global action over time which has all countries similarly engaged and provides us with a pathway to stay under the 2 degree goal.

Australia has been working for three things in the agreement:

First to see all countries, especially major economies, commit to mitigation efforts that are nationally determined but also meet minimum quality criteria mitigation.

Secondly to ensure accountability and transparency in how States are meeting their commitments. We need this in order to judge how we are tracking collectively against the below 2 degree goal and to see whether our neighbours, trade partners and competitors are doing what they say.

This transparency will build confidence which, in turn, will build greater ambition.

And thirdly, a durable process which will allow us to build action over time to keep within the 2 degree guard rail through a regular periodic process that prompts States to revisit and update their national mitigation efforts through five-year cycles.

Developing countries have argued that this agreement must give equal status to adaptation. We understand these concerns and have sought to be constructive in addressing this. The Paris outcome should encourage mainstreaming of adaptation and promote the sharing of best practice.

We need to assist the most vulnerable to manage and adapt to the economic and security implications of climate change. And we need to build disaster response capacities and strengthen economic and governance resilience within countries.

These objectives are very much part of Australia's overseas development program.

For the small island states, particularly in the Pacific, climate change is an existential challenge. Our development program in the Pacific is focussed on climate resilience and building in disaster response capacities.

Despite the occasional heightened rhetoric from the South Pacific, at the practical level we work closely with them in pursuit of an ambitious Paris Agreement.

We also know that Australia needs to prioritise resilience to climate impacts nationally and through international partnerships and we will produce a National Climate Resilience and Adaptation Strategy which Minister Hunt will release at Paris.

Paris will be an intense few weeks and there are many contentious issues yet to be resolved. These include loss and damage, legal form, transparency and accounting, cycles, compliance and long-term goals.

But the two biggest issues are finance and differentiation. These are inextricably linked. Ultimately it may well come down to the ask by the developing world in regard to climate finance in order to secure their participation in a common and legally binding agreement to tackle climate change.

An OECD report was released in Lima in October which showed that the developed world is well underway to meeting its commitment from Copenhagen to provide US$100 billion per year in climate finance from all sources by 2020. The OECD reports shows that in 2014 the developed world provided US$63 billion in funding from all sources to the developing world. The methodology to count this was conservative.

The Paris negotiations are focussed on how to reference post-2020 finance but obviously how we are tracking on our pre-2020 finance commitments are important in building trust.

The amounts required are enormous, both for adaptation and for a low emissions future. The recent Bloomberg Energy Report stated that up until 2040, US$12.2 trillion would be required for power generation and some 78 per cent of this for the developing world.

Much of this finance will have to come from the private sector and will also require an expanding country donor base, so the negotiations revolve around how to reconcile different narratives. For the developed countries it is about the importance of establishing enabling environments that are attractive to the private sector, about an expanded donor base that reflects the financial reality of 2020 and effectiveness. For the developing world it is more about business as usual and the quantum.

Australia is playing its role in climate finance. Minister Bishop announced a AUD$200 million contribution to the Green Climate Fund and climate resilience has been mainstreamed into Australia's development assistance program.

Australia has been elected this month to co-Chair the Green Climate Fund which is a tribute to the competence and pragmatism we bring to the issue. It will also allow us to ensure the Pacific Island States and other smaller vulnerable countries have better access to sources of global climate finance.

Earlier I spoke in general about a shift in the nature of power. How, as a result of new communications technologies, power is moving to coalitions and networks. You can see this clearly in the climate change negotiations.

And the multilateral system is still struggling to manage this reality and to move beyond Governments.

Civil society has always played a highly constructive role and will continue to do so. They might be styled as observers but they are in fact often participants. They not only pressure governments but are often part of developing countries negotiating teams.

What is changing dramatically now is the role of business and industry. The private sector and innovation are going to be critical in tackling climate change. They had viewed the UNFCCC as irrelevant at best. In the negotiations a business peak body representative was given one to two minutes to speak at the end of a session. Few government delegates listened, and it was therefore unsurprising that few in business had taken notice of the UNFCCC.

One of the things that has changed is that the national determination of targets has created the necessary domestic conversations with stakeholders.

In Australia we have seen commitments from a host of major companies, including ANZ, the National Bank, BHP Billiton and AGL.

In Paris there will be a series of themed action days and non-government meetings involving business, industry, NGOs, cities and other sub-state actors.

The aim is to create a link between the on-ground action by these organisations and the political leadership that the multilateral process provides from Governments.

The French have been exceptional in driving this change which recognises the private sectors crucial role in tackling climate change through the provision of climate finance and innovation.

In this regard, the recent announcement by Bill Gates of his preparedness to commit US$2 billion to research and development to tackle climate change shows how the ground is changing.

This more expansive approach to engendering climate action beyond just states gets around a core criticism of multilateralism: that once an institutional solution is imposed it cauterises the need to think about the problem anymore.

The Paris action days will seek to turn this criticism on its head by using institutional processes to think more deeply and widely about how to act on climate change.

What is also changing is the relationship between civil society and the corporate sector. There is an increasing understanding that they do not need to be on opposite sides of the divide and can work constructively together.

The statement of Joint Principles by the Australian Climate Roundtable is an impressive illustration of this collaboration.

These groups have real and growing power in the multilateral system and with power comes both responsibility and accountability.

So how will Paris work out? It is hard to predict but my sense is that the real danger is not that there will be no agreement but that it will be a minimalist agreement. That Paris will principally put a bow around the INDCs.

That much of what we want in terms of transparency, accountability, durability and review may be lost.

At the Ministerial and negotiator level we are working hard to avoid this and for an ambitious and durable agreement.

Within the UNFCCC, Australia has developed significant multilateral muscle. We are effective operators and play the honest broker role well, especially from our role as chair of the Umbrella Group – a negotiating group that includes the US, Japan, Russia, Canada, New Zealand and Norway. The outcome on how emissions targets are captured in the Paris agreement will be due in no small part to Australia's 2009 idea of creating a schedule for commitments.

We, including the French, are all also engaged in seeking to manage expectations in a realistic way. Let me repeat it – Paris will not put us on track to keep global warming below 2 degrees – but that should not lead to a "Copenhagen moment" with headlines the morning after the conference saying we have failed.

Paris is a waypoint–not the final destination–for our effort to tackle climate change. What is different about Paris, compared to our past efforts, is that we are building a wider "silver buck shot" approach which better harnesses national, bilateral and non-government efforts. That builds into the agreement a dynamic and durable process that puts us all on the dance floor and allows us to work to keep within the 2 degree goal.

The Paris agreement must reflect and build on the real world action that has already moved well past old political divisions so rampant in the United Nations and establish partnerships for the future. It is a huge test for the system.

The Great Barrier Reef

Let me now turn to the other issue I want to talk about: the Great Barrier Reef.

It is one of the natural wonders of the world. It is part of the identity of Queenslanders and of all Australians.

The World Heritage Committee of UNESCO is the arbiter of what is and what is not World Heritage. And World Heritage listing brings significant economic and reputational benefits.

The Great Barrier Reef World Heritage area was inscribed in 1981 under all four natural criteria. The Reef was always a multiple use area. It is the size of Germany and supports nearly 70,000 full time jobs and is worth AUD$5.6 billion a year to the Australian economy from tourism alone. More than AUD$40 billion of exports leaves its ports every year.

Managing marine sites is always complex, particularly one this size which involves such diversity, many faceted use and strong Indigenous connections.

The Committee's concerns over the Reef first emerged in 2011 following the approval of Liquefied Natural Gas facilities on Curtis Island in the World Heritage Area. These concerns continued to gather at pace and at the World Heritage Committee meeting in Doha in 2014 a decision was made to consider it for "in danger" listing at their next meeting in Bonn in 2015.

The Australian Government reacted to these concerns with a major coordinated whole-of-government campaign to avoid an "in danger" listing.

This involved working closely with the Queensland Government and all the stakeholders of the Reef in the development of a long-term plan to ensure the Reef retained its Outstanding Universal Value.

It also involved a major campaign that utilised Australia's worldwide diplomatic network to engage every World Heritage Committee member to get our technical message across and to refute the negative counter-campaign by activists.

The Government recognised that an "in danger" listing would have had significant implications for Australia. It would have had a detrimental impact on Australia's foreign and trade policy interests – including investment in the Reef region. It would have sent a negative signal about the health of the Reef, impacting on tourism as well as cast Australia's management of World Heritage sites in a negative light.

It was also a wake-up call for Australia, that as custodians of the Reef, we had a responsibility to ensure that we were protecting and improving it.

On 1 July the World Heritage Committee unanimously rejected efforts to list the Great Barrier Reef as World Heritage "in danger". The decision was a welcome and hard earned outcome.

The decision to not list the Great Barrier Reef as World Heritage "in danger" was characterised by the Committee as a win for the Reef, and a win for the World Heritage system. The extent of dialogue over the 2050 Reef Plan with UNESCO, and the technical advisors to it–the World Heritage Centre and the International Union of the Conservation of Nature–was unprecedented and has set a new model for cooperation.

As a result we have re-positioned Australia as a leader in the management of World Heritage sites.

Our success in avoiding an "in danger" listing was underpinned by major policy changes to address concerns raised by the Committee. These included restrictions on marine disposal of capital dredge material, limits on port development and an additional AUD$200 million contributed from Federal and State governments to address the critical issue of water quality in the Reef region. The Reef 2050 Plan called for by the Committee demonstrated the seriousness of our efforts and was crucial to our success.

The action is backed by substantial financial resources, with more than AUD$2 billion dollars projected to be invested in managing and protecting the Reef over the coming decade.

The issues confronting the Reef are substantial and documented frankly in the 2014 Great Barrier Reef Outlook Report. Climate change, water quality and, in particular, nutrient run-off from land and crown-of-thorns starfish are the crucial challenges facing the reef.

The Australian and Queensland Governments are taking action to tackle them all. It will require sustained, concerted action over years and decades – action set out in detail in the Reef 2050 Plan.

There is no single or short-term solution, but by working to reduce the pressures we can control, whether they are from the quality of water entering the reef, coastal land use, shipping and fishing, we support the Reef's Outstanding Universal Value and its resilience to withstand climate change and cyclones.

Some environmental activists sought to use climate change and mining issues to portray to the World Heritage Committee an unremittingly gloomy picture of an industrialised and dying reef.

The Committee saw through this and understood the fact that all maritime World Heritage sites face pressure from the impacts of climate change.

They also recognised that Australia was playing its part in taking strong and effective action on climate change and that the management of the Reef is world's best practice.

There is no doubt that the threat of an "in danger" listing was a potent means of leveraging pressure on the Australian and Queensland Governments as well as potential investors with regard to the Reef.

Environmental activists have also demonstrated an acute awareness of the power of this issue in the public and its remains a very significant fundraising tool for them, both in Australia and internationally.

That said, an actual "in danger" listing would have done great harm to the reputation of the Reef and Australia with consequent economic ramifications. It would have also buoyed the efforts of certain groups to dissuade investment around the Reef and more widely in Australia.

As a Government we need to be clear-eyed about the likely continued utilisation of the UN World Heritage system by environmental groups and the economic risks this poses to Australians interests. Environmental activists have identified the World Heritage system as an effective tool to advance their agendas.

We have secured strong international support for our actions but the implementation of the Reef 2050 Plan will be watched closely both by Australians and by the Committee itself.

We are now focussed on implementing the many actions in the Reef 2050 Plan. There is significant stakeholder involvement in this. The Government is working with cross sectoral interests through a Reef Advisory Committee, Chaired by Penny Wensley, and taking independent scientific advice from the Independent Expert Panel, chaired by the Chief Scientist.

It should be noted that the development of the Reef 2050 Plan involved intensive engagement with all stakeholders including WWF. This consultation process was important to the credibility of the Plan.

Let me turn briefly to the World Heritage system itself.

The membership of the World Heritage Committee is decided by an electoral system recently restructured to provide greater weight to regional groups such as Africa. The political driver for this is to increase their influence and to promote the cultural heritage of non-European sites.

On the World Heritage Committee most of the experience and expertise of members is in cultural heritage and there is not the same detailed understanding of natural site management.

Another facet of the institutional weakness of the UN is again on display with the World Heritage Committee. It is severely under resourced and the talent and dedication of a few key advisors in the World Heritage Centre and IUCN keeps the whole system afloat.

Resource constraints mean both members and the technical advisers are often heavily reliant on environmental NGOs and the media as sources of information.

As such, decisions are heavily influenced by civil society and this brings me back to my earlier point about the changing nature of power and the importance of civil society in these emerging dynamics.

In this context, I want to acknowledge the role that WWF has played over the Reef. They did not ultimately call for an "in danger" listing, but rather sought to keep the pressure on Government whilst also choosing to work with us as part of the stakeholder group on Reef issues.

Others chose to play it differently and utilise more traditional campaign tactics.

I would also note that business is stepping up its role in preserving the Reef, and the Reef Foundation is a good example of this engagement.

The collaboration we are now seeing between business and civil society in the climate change arena is something that would be highly desirable in regard to the Reef. It should not be seen as a zero sum game.

To conclude, I have sought to give you a sense of how complex the transnational environmental issues are that we need to manage and how the multipolar world we now find ourselves in presents enormous challenges.

We should never be too linear with projections as events in the world are a bit too unpredictable and messy for that. But what does seem clear is that the multilateral system will continue to be challenged by the growing diffusion of economic and political power and by technological change.

We have left a place that was familiar and supported the international norms that we had helped create. We are moving towards a new destination and its shape remains shrouded. The one thing that is clear is that others will use the system to pursue their interests however narrow or wide they may judge them.

The West is no longer seen as necessarily the source of answers and it no longer holds all the levers.

In working our way through this evolving multilateral order it will be crucial that Australia remain active and ambitious. We have little choice but to engage multilaterally and to strive for an international rules-based order.

This will require continuing strong leadership and creativity in thinking about the multilateral governance of issues. As always our foreign policy will need to reflect our values whilst keeping a firm eye on how best to pursue our interests – both in terms of the right structures as well as the right outcomes.

The final message I want to leave with you is the need to engage ever more actively with civil society and business. They have always had a stake in the outcomes, but they are now crucial players in shaping them. The fact is we all need to re-think how to best manage the challenges of the current multilateral system and how to maximise our effectiveness.

This points to the merits of an even more collaborative approach between Government, civil society and business in an increasingly uncertain multilateral environment.

Last Updated: 18 November 2015
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