A paper delivered to the Lavoisier Group Conference, May 2000

Opening Address

Hugh Morgan, AO

The story is told of the great Conservative Prime Minister, Benjamin Disraeli, and a clergyman who was giving him a hard time with respect to one of the frequent crises of Church of England doctrine, and administration, which plagued Disraeli during his various terms in office.

This particular divine, a "liberal" dean of one of the famous cathedrals, on one occasion button-holed Prime Minister Disraeli at a garden party, and started listing his complaints about the refusal of the Church of England to move with what he saw as the spirit of the times. This dean, like other cathedral deans of his time, enjoyed the incomes and emoluments seldom seen today. Disraeli, who had known serious financial hardship during his career, was no doubt mindful of this when, having put up with the Dean's harangue for as long as he could, he fixed him with a cold look and said:

" Mr Dean,---I pray you, Sir,---remember this; no doctrine, Sir, no dean."

I will return to this theme at a later stage.

The scientific foundation, upon which the entire Kyoto Protocol edifice is constructed, is simply explained. Carbon dioxide is a gas which is present in the atmosphere in concentrations of about 350 parts per million. It is essential to life on earth in that every plant needs CO2 to live. CO2 is to plants what food is to animals, and what low-cost energy is to contemporary civilisation. Unlike oxygen or nitrogen, CO2 has the property that it is transparent to ultra-violet radiation but opaque, up to a point, to infra-red radiation. It shares this property with water vapour and a number of other gases such as methane which are present in the atmosphere.

Atmospheric concentrations of carbon dioxide have been increasing for more than a century and the global warming theorists assert

The chain of argument, then, is this. Increasing consumption of fossil fuels leads to increasing CO2 concentrations in the atmosphere; which leads to increasing global temperatures; which leads to rising sea levels, plagues, droughts, hurricanes, etc etc. In order to prevent these disasters something, therefore, has to be done, and the proposed remedy is to withdraw the use of carbon from the global economy. If any doubt is admitted concerning this chain of argument, the Precautionary Principle is used as the final trump card. Even if we cannot be certain that the science is well founded, we have to assume that it might be well founded, and therefore something has to be done---now!

The Kyoto Protocol, therefore, is the first step towards a global regime of carbon withdrawal, under which net CO2 emissions will be progressively reduced to, presumably, zero, and the world's climate will be stabilised---at least that is the inference---at its present state.This has launched considerable activity amongst governments including the development of an international Convention on Climate Change leading to where we are today with consideration by Australia and other developed countries of whether or not to ratify the Kyoto Protocol which sets binding greenhouse gas emission reduction targets.

Notwitstanding the arguments about the science, greenhouse is a public issue. Governments and some companies, for all manner of reasons are responding. This may present a dilemma for some between good science and meeting community concerns. For the purposes of making clear what WMC as a company is doing in regard to environmental management, we have approached the issue in the following way:

In our first Environment Progress Report five years ago, WMC set public environmental targets including 15% reductions in energy use and carbon dioxide emissions, per tonne of ore milled. We did this as part of a strategy to improve our environmental performance.

The targets drove us to better understand the processes involved in mining and minerals processing which had an environmental impact. It also highlighted the need to improve our measurement and collection of data so that we could make informed decisions in a business context.

WMC has reduced emissions of carbon dioxide by 499,000 tonnes based on a static or no action basis.

To put it another way, between 1994/95 and 1998 our WMC carbon dioxide emissions have been reduced from 96 to 82 kg of carbon dioxide for every tonne of ore milled. This compares to a no action projection of 103 kg of carbon dioxide per tonne of ore milled.

We have achieved this through actions such as switching to gas fired power generation, other fuel substitution activities and energy efficiency improvement projects.

Our targets are set on an efficiency basis because we are a growing resources company and we expect to continue to increase our use of energy and emissions of carbon dioxide in absolute terms. We are a company determined to expand. We will produce more and consequently there will be increased emissions.

For example, our carbon dioxide emissions will increase as a company by 25% once we reach full production at the Queensland Fertilizer Plant. We anticipate that the company as a whole will reach emissions of carbon dioxide of around 3 million tonnes by the end of 2000.

Energy conservation measures achieved to date equate to savings of approximately $15 million and we continue to pursue new ways of going about our business in an effort to reduce our costs---it is simply good business.

As part of WMC's environmental management system, the company has also developed environmental standards to provide consistency in the company's environmental activities. These standard prescribe minimum acceptable practices for WMC and include commitments to energy conservation and reduced air emissions.

Today, WMC owns and manages complex engineering, industrial and chemical facilities as we extract metals and minerals including uranium, nickel, copper, gold and more recently phosphate fertiliser. All of these processes have potential environmental consequences but the foundation for WMC's improved environmental performance has been good science.

Let me illustrate this by initial reference to an environmental legacy of the past---one which I'm not proud of, but which marked a turning point for our approach to environmental management.

WMC's Nickel Refinery at Kwinana was commissioned in 1970 producing ammonium sulphate. A residue storage facility was built at Baldivis in 1970 to store solid and liquid effluent from the nearby Refinery.

Some years ago the fact that this storage facility and the Refinery were leaking ammonium sulphate solution into the groundwater and plumes of ammonium sulphate were threatening waterways, including Cockburn Sound which had not previously been reported was uncovered. As a company we had to then act on an issue that could have been resolved earlier and more cost effectively.

We had to undertake a detailed and exhaustive study of groundwater dynamics in order to reach a solution which was going to work. We learnt valuable lessons about the need for a systematic approach to monitoring our processes to ensure we had our emissions, in this case under the surface, understood and under control.

We had to find an effective remedy based upon a scientific approach---testing our hypothesis about the nature of the plumes so that we could recover the contaminated groundwater and prevent future contamination.

By 2010 it will have cost WMC around $80 millions to fully rectify these problems. This is serious money. But it has been a valuable lesson about the importance of fully understanding all aspects of the processes we use in our plants. This exercise was about getting the facts right; getting to the truth; its resolution was about real science and the application of new technologies and processes.

Today we are much more focussed on the environmental aspects of our business. Our performance is more than ever the subject of government and public scrutiny. Our licence to operate is strongly influenced by our ability to demonstrate our environmental credentials.

We operate three sulphuric acid plants at Roxby, Kalgoorlie and now at Mount Isa. Our newest acid plant at Mount Isa takes 500,000 tonnes per annum of sulphur dioxide gas from the MIM smelter stack and produces sulphuric acid, which we use to make diammonium phosphate fertiliser at Phosphate Hill. At full production this will give a total of 837,000 tonnes per annum of sulphur dioxide converted to sulphuric acid at our three plants (Mount Isa, Olympic Dam Operation and Kalgoorlie Nickel Smelter).

I give this example of the effective use of science and technology to meet business needs and to provide us with environmental solutions. WMC's businesses all have strong foundations in good science in many disciplines.

This brings me to the purpose of the Lavoisier Group---to explore the scientific basis behind climate change and to ensure that there is a full, open and transparent debate about the scientific uncertainty. This is an objective that as a company we would ascribe to and applaud.

The Intergovernmental Panel on Climate Change (IPCC) is due to release its third Assessment Report on the science of climate change in 2001---the draft of "Climate Change: The Scientific Basis" has just been released for expert review. In its Summary for Policymakers, the IPCC Working Group notes that:

• global average surface temperatures increased since the late 19th Century---the rate and duration of warming of the 20th Century appears to have been the largest during the past 1000 years.
• data for trends of the temperature of the lowest few kilometers of the atmosphere from the satellite record are now more consistent with those from the surface record (although there is still an unexplained difference of 0.05 to 0.1 degree C per decade that could be due to observational differences or real differences between surface and upper air trends.
• the trend is that of a warming world and it is concluded that there has been a discernable human influence on the global climate.

On the other hand, you will hear tomorrow from our speakers who have a different perspective on the science of greenhouse. There is open and prestigious challenge to the accepted scientific opinion with contrary evidence, namely:

• Professor Lindzen's critique of the CSIRO submission to the Senate Committee, which you all received tonight, which I believe gives those who claim that the science debate is now closed, a very real problem, and I wish to draw it to your attention. This sentence occurs in Professor Lindzen's discussion of the satellite temperature data; data which has been subjected to much criticism and analysis; and it reads

• The satellite data has now been recognised by the American National Research Council, and that data continues to show cooling (albeit insignificant) from 1979 to the present. That sentence indicates to me, as a layman, that the debate is far from over; that in fact it has only just really begun.

Differences of expert scientific opinion is not new to science nor is it heresy to challenge accepted science. It is an important part of the scientific process to continuously challenge scientific opinion as new information and new theories are put forward. Without challenge in science, doctrine prevails.

I return now to my earlier story about Disraeli and our dean. This story is relevant to this Lavoisier Group Conference although the institutions, for our purposes have to be changed. The connection between church and doctrine is pretty straight forward. Churches are made up of people who believe certain things, and if there is serious disagreement about what are the essential elements of belief, then the metaphysical foundations of the church are crumbling and the physical foundations of the church buildings will not be far behind.

Our democracy, our political institutions, rely upon truth, and a concern for the truth, which parallels that of a church and its reliance on doctrine. Once the institutions which underpin our national life become indifferent to truth, then I do not believe that in the long term, they can survive. That is why all of our parliaments are deeply concerned if they discover that a minister has not told the truth. Misleading the House is politically a capital offence and it is right that it should be so. We can paraphrase Disraeli with the aphorism---"no truth---no democracy".

I encourage all aspects of public debate on greenhouse, including the science of climate change, because I am fearful of the consequences for the future of Australia if we don't fully understand the consequences of the policy paths we are embarking upon.

We learn from government agencies and their economic modellers that greenhouse policies may cost us upwards of $12 billion per annum in emission charges. This equates to the economic impact of another GST. And yet we had an election and several years of public debate about the consequences of introducing a GST---contrast this with greenhouse policies.

In conclusion, I wish to highlight the importance of sound science as we engage in the greenhouse policy process and to urge a rational debate based on the facts. I can best illustrate my caution by reference to recent predictions made in a speech which President Clinton gave to the UNGASS assembly in July 1998. The President warned the UN Assembly:

With the authority of the President, it is understandable that John Citizen or Joe Sixpack are consequently frightened.

The consequences for all Australians are serious. These consequences extend to what Australia is to become as a country---our future population growth and our industrial make-up.

Industry faces significant costs to meet our proposed greenhouse gas emission reductions---$100 million for WMC and over $1 billion for BHP. On this basis alone, we have a self-interest and, indeed, a moral imperative to be involved in the greenhouse debate arguing for sound science and for the facts to drive the debate.

In this regard I applaud the objectives of the Lavoisier Group in airing such important issues of public interest. This is particularly so if the senior minister to the Government on environmental issues seeks to ridicule its endeavours. I wish it well and it can rely on my support.