International River Symposium

Speech

Speaker: Secretary of the Department of Foreign Affairs and Trade, Mr Peter N Varghese AO

21 September 2015

The idea that humans can adversely affect the planetary environment in which we live – whether you are talking about impacts on wildlife, the health of rivers or the oceans, or the atmosphere we breathe – is a relatively new one.

Prior to industrialisation, the idea that we could fish out our waters, or change the composition of the air, would have seemed fanciful at best, mad at worst.

The Earth was generally seen as a divinely-created, fixed natural order – a tableau in which human life took place.

But the evidence for human impact on the environment is overwhelming, whether you are talking about species loss, access to water or climate change. 

Today, we understand the environment as fragile and interwoven, and that we, as a uniquely-powerful, highly-technological species, can indeed have an impact on it.

Increasingly, the environment is seen as a global public good – something whose care lies, inherently, beyond the power of any one nation.

And in a globalised world, we better see the connections between the environment and economic development.

Some argue that the post industrial revolution developed world took a “wreck and repair” approach: the pursuit of economic growth regardless of environmental impacts, with the hope that the environment could later be repaired.

Whatever the validity of that argument, it is not an approach we can take anymore.  And nor can we afford to regard protecting the environment and creating economic growth as a zero sum game

Water – a global risk

Earlier this year, the World Economic Forum released the 2015 version of its flagship ‘Global Risks’ report. 

The report ranks global risks according to both likelihood and impact. 

The number one global risk in terms of impact over the next 10 years was water crises. 

Not weapons of mass destruction, the spread of infectious diseases, conflict between states or fiscal crises.

Water.

In a dry continent like Australia, access to water has been fundamental to our social and economic development. 

It shaped the lives of Australia’s first inhabitants for tens of thousands of years and, from the earliest days of European settlement, securing a reliable water supply has been a driving force behind national development.

The world’s rivers and aquifers are under pressure from the growing combined demands of agriculture, industry and households. 

Water is already a scarce commodity but, in the future, it will become even more precious.

The WEF report outlines in detail the global water challenge:

“Global water requirements are projected to be pushed beyond sustainable water supplies by 40 per cent by 2030.  Agriculture already accounts for on average 70 per cent of total water consumption and, according to the World Bank, food production will need to increase by 50 per cent by 2030 as the population grows and dietary habits change.  The International Energy Agency further projects water consumption to meet the needs of energy generation and production to increase by 85 per cent by 2035.”

Clearly, we will need to change our use of water and secure more reliable and plentiful sources of water in the years ahead. 

But that won’t be easy - economies are developing at a speed and on a scale never before seen. 

The world is in the middle of a major economic and social transformation that is shifting millions of people out of poverty across South and Central America, Africa and Asia.

Perhaps it’s no surprise that the environment has suffered in the process. 

Nowhere is this more obvious than in our own region – the Indo-Pacific.

Environment vs Economy: the Indo-Pacific

In recent decades, Asia has re-emerged as a region of first order economic and strategic significance. 

The combination of large populations and industrialisation is bringing the region back to the preeminent place it had in the global economy until the end of the eighteenth century.

China’s economic growth over the past few decades has had no parallel in history.

Just twenty-five years ago, China’s share of global GDP was about 2 per cent.

Today, it is 15 per cent.

That’s an incredible rate of change in just one generation – but it has not been without cost. 

China’s economy is highly energy intensive and its growth has relied largely on heavy industry.

The environment has suffered as a result.

Air pollution is now a very real threat to human health. 

Earlier this year, The Economist aptly called it an ‘Airpocalypse’.

China’s challenges in relation to water are no easier.

In April, the Hong Kong-based NGO, China Water Risk, painted a bleak picture of China’s changing waterscape. 

It found that water demand is likely to exceed supply by 2030. 

China’s energy and agriculture industries are thirsty. 

Currently, 97 per cent of China’s power generation requires water to generate on a daily basis.

China’s leadership is acutely conscious of these environmental challenges.  It is already taking steps to redress the “economic development at all costs” model that, while pulling hundreds of millions of people out of poverty, has exacerbated environmental problems.

Likewise, any discussion of regional environmental challenges would be incomplete without mention of India, now the world’s fastest growing, major economy.

Like China, India’s decision-makers are grappling with the dual challenges of developing its economy and preserving its environment.

Earlier this year, The Economist reported that the lives of nearly 700 million Indians would, on average, be over three years longer if national standards for air quality were met.

According to the World Health Organization, New Delhi is the most polluted city on the planet.

In relation to water, India, too, faces significant challenges.

In April, it was widely reported in India that the Central Pollution Control Board had found that the number of polluted rivers had gone up from 121 in 2009 to 275 in 2015.

While China and India will almost certainly remain economic powerhouses for the remainder of this century, their future growth is not without risk. 

Handled well, increasing rates of urbanisation and development could drive economic growth and opportunity for decades to come.

Handled poorly, the greater the chance that environmental constraints will hinder future growth.

That would have far-reaching implications for the global economy.

Given the stakes for all countries, the world should do all that it can to avoid the environment, and notably water, from becoming a greater source of conflict.

The International Institute for Sustainable Development contends that environmental factors are linked to conflict in a variety of ways often obscured by more visible issues, such as ethnic tension and power politics.

Given what we know about the world’s future water needs, it is not difficult to imagine that, in coming decades, access to water could become a much greater source of conflict.

The challenge of multilateralism

No country can tackle environmental issues in isolation. 

The environment is a global challenge which requires a coordinated response from the international community as a whole. 

Today, however, reaching a multilateral consensus is proving increasingly difficult.

We need it more than ever, but the global multilateral system is under intense pressure.

Part of the reason for this is that it is now a much more congested and contested field. 

In 1945, the United Nations had 51 members. Today, it has 193.

By and large, the multilateral system we have today has served Australia well. 

But the emergence of new powers, the march of globalisation, the rising influence of non-state actors and the transfer of wealth and power from the West to the East have changed the dynamic.

At the heart of the multilateral system is a tension between national power and global democracy.

The multilateral system rests on the equality of all states.

But – paradoxically – power has always rested with the handful of states with the strategic and economic weight to shape events.

The story of multilateralism is the constant quest to expand the reach of the former and constrain the raw power of the latter. 

It works best when states with power accept that their broader interests are served by promoting public goods and by a system of international rules and norms which apply to all.

Today, shifts in the distribution of economic and strategic weight are reshaping the dynamics of multilateral cooperation. 

Emerging powers are no longer willing to accept rules they did not write or outcomes which they perceive do not take their interests into account.

Some do not share the core values and interests of the West.

Others are wary of interventions in national affairs.

Others still have shown little interest in taking a leadership role.

These challenges are clearly in play when it comes to the environment.

There have of course been some notable successes.

The 1987 Montreal Protocol is widely considered to be the world’s most successful environment protection agreement. 

The Protocol, which sets out a mandatory timetable for the phase out of ozone depleting substances, includes obligations for developed and developing countries.

To date, 197 countries have ratified the Montreal Protocol – the world no longer fears a depleted ozone layer.

By any measure, it’s an outcome worth celebrating.

But one wonders whether an agreement of this size and scale would be able to be negotiated today.

The Montreal Protocol was negotiated and signed by just 24 countries and the then European Economic Community.

I think if you offered any international climate change negotiator today the opportunity to reach consensus with fewer than 50 countries, they would leap at the opportunity.

Climate change

The difficulties in forging a global consensus is particularly evident in relation to climate change where a grand bargain has remained elusive.

While the risks associated with climate change are well documented, the world is no closer to agreeing a response that avoids passing the problem on to the next generation.

In 2015, the international community has the opportunity to move beyond recent international summit failures to articulate a coordinated agenda to address the most pressing environmental risks facing the planet.

Later this year, the international community will endorse the Sustainable Development Goals, an update of the Millennium Development Goals, agreed 15 years ago.

The environment features prominently.  Indeed Goal 6 is focused exclusively on water.

In November, the world will meet in Paris to negotiate a new global climate agreement as part of the United Nations Framework Convention on Climate Change Conference.

Last month, the Australian Government announced a plan to cut carbon emissions by 26 to 28 per cent of 2005 levels by 2030.

If Australia were to meet this target, it would represent a substantial step towards decarbonising our economy.

There is also hope that today’s emerging economies could rely on new technologies – such as renewable energy sources – to avoid the “wreck and repair” approach. 

Australia’s water challenge

As a large country with a relatively small population, Australia faces a different set of environmental pressures compared to other countries – developed or developing.

Yet we are not immune to the challenges posed by balancing economic growth and the preservation of the environment, particularly when it comes to water.

Australia is the driest inhabitable continent on earth, with the least amount of water in rivers, the lowest run-off and the smallest area of permanent wetlands of all the continents.

Only 6 per cent of the Australian landmass is arable.  

We have some of the worst soil in the world. 

Like anywhere else in the world, the environment has suffered as a result of human activity.

A number of Australian ecosystems are under threat –Australia’s environment is exceptionally fragile.

The good news is that Australia has a strong record of environmental management – the decision by the World Heritage Committee to not list the Great Barrier Reef as “in danger” this year was a significant vote of confidence in our ability to care for a critical environmental asset.

Yet we often take for granted the contribution that a healthy environment, and particularly access to water, makes to our economy.

In Australia, water reform is economic reform.

Consider the Murray-Darling river system, the subject of my speech to this conference last year. 

The Murray Darling River Basin produces about one-third of Australia’s food supply. 

In total, the Basin contains about 40 per cent of Australia's farms and 70 per cent of Australia’s irrigated land area.

Australian Water Partnership

As I said at this symposium last year, dealing with water scarcity – driven by endless historical bursts of drought and drying – has been central to our national history.

Australia is recognised as a world leader in the fields of water management and reform.

Water reforms have helped Australia maintain our agricultural production during periods of drought.

We want to share our expertise with the world. 

Water, agriculture and fisheries is one of the six priority areas under Australia’s aid program.

In our region, Australia is supporting sustainable economic development, improving water security and reducing the environmental and social impacts of water scarcity.

For decades now, Australia – with other donors – has been helping support the countries of the Mekong manage a resource that supports tens of millions of people.

In India, we are helping improve water management across the Indus, Ganges and Brahmaputra basin.

Today it gives me great pleasure to officially launch the Australian Water Partnership – an investment of $20 million over four years through which Australia will provide further help to countries in our region to improve the sustainable management of their water resources.

I acknowledge the Chair of the AWP, Dr Kaye Schofield AM, who has joined us here on the dais for the launch.

I wish Kaye and the broadly based Australian Water Partnership committee well as they work to strengthen Australia’s engagement with the region and contribute to overcoming water scarcity and insecurity as a key constraint to economic development.

The Partnership will enable Australian public and private sector water experts to engage with international agencies and with the water sectors in the Indo-Pacific.

The four core themes or areas of focus in Australia’s water reform journey can be summarised as: 

  • Understanding the water resource base
  • River basin planning and water allocations framework
  • Governance reforms & Institutional strengthening
  • Managing demand and improving efficiency

The Australian Water Partnership is offering assistance and cooperation on these four themes to the regional and international community.

It will build on the strong foundations provided by decades of development cooperation between Australia and our partners, many of whom are here today.

Conclusion

Ladies and gentlemen, we are at a moment in history when we cannot be certain of either the strategic or economic trajectory of our region or beyond.

The world is struggling to balance the needs of its people with the needs of the environment.

Now, more than ever, the international community needs to come together and find a global solution.

In the years ahead, the task of identifying a means of addressing our biggest environmental challenges will only grow more urgent. 

Australia understands both the development needs of emerging economies and the challenges posed by environmental constraints.

Ultimately, the future of the environment and the global economy will depend on the world’s collective capacity to take action and respond effectively.

Australia is well placed to participate in this search for solutions.  We have a long history of multilateral diplomacy.  We are a generator of ideas.  Our technical expertise on the environment ­­­and especially on water management is strong.  In short Australia stands ready to make a practical and constructive contribution.






Last Updated: 21 September 2015
Peter Varghese AO, Secretary, Department of Foreign Affairs and Trade