Climate change is a serious issue. Caltex has committed to a climate change policy and action plan so we can strengthen our efforts to reduce greenhouse gas emissions.

Caltex:

1. accepts the conclusion of Intergovernmental Panel on Climate Change that "most of the observed increase in globally averaged temperatures since the mid-20 th century is very likely due to the observed increase in anthropogenic greenhouse gas concentrations".
    
2. recognises that climate change presents a significant risk to economies, societies and the environment. Caltex supports actions to advance climate science to improve understanding and therefore reduce the risks from future impacts.
    
3. advocates a broad-based approach to emissions abatement recognising that there are many pathways to reduce greenhouse gas emissions over the short, medium and longer term. These include improved energy efficiency, development and deployment of new and innovative technologies, enhanced public awareness and supportive policy frameworks. Practical adaptation to the unavoidable impacts of climate change is also a critical part of an effective response, in addition to emissions abatement.
    
4. supports a national approach to climate change policy in Australia to ensure that the most effective and appropriate frameworks are put in place.
    
5. supports public reporting of greenhouse gas emissions to provide clear understanding of trends in industry emission profiles.
    
6. expects policy decisions by governments to be based on sound scientific and economic analyses that recognise the risks, costs and benefits to the downstream petroleum industry (including refining and marketing sectors) as well as to society. In particular, the future viability of Australian refineries will be dependent on maintaining the international competitiveness of Australian refined products.
    
7. encourages co-operative international actions by governments and industry that recognise the global nature of climate change and contribute to sustainable longer term climate change mitigation.
    
8. supports a long term aspirational national goal for reduction of greenhouse gas emissions . This goal for the year 2050 would be determined and periodically adjusted on the basis of the best available science.
    
9. supports introduction of a national pricing mechanism for carbon . Caltex does not at this stage support any particular policy approach nor any timetable for carbon pricing except that such a pricing mechanism should be implemented at some time in the next decade (in or after 2010) and take account of the criteria set out below.
    
10. advocates the following criteria for any carbon pricing mechanism. Any carbon pricing mechanism should:
     
1. be an appropriate mix of carbon taxes (eg for road transport - implemented in the form of a cents per litre carbon tax on transport fuels), emission trading (for point sources of greenhouse gas emissions) and regulation (which carries an implicit carbon cost)
    
2. where implemented for some sectors in the form of an emission trading scheme, carefully evaluate the relative merits of cap and trade, baseline and credit, and hybrid schemes (eg those with a capped carbon price)
    
3. recognise the financial risk that would be imposed on the petroleum industry by an emission trading system with an upstream point of acquittal that forced suppliers to acquire and acquit large numbers of permits on behalf of customers
    
4. maintain the competitiveness of Australian export and import competing industries and, in particular, protect energy-intensive, trade-exposed industries from the impact of any emission trading scheme while competing nations are not subject to commensurate emissions reduction policies
    
5. allow for domestic and international offsets towards meeting domestic emissions liabilities (including offsets that may be unilaterally linked to an Australian emission trading scheme)
    
6. be part of a global approach to climate change that includes all of the major emitters, which may consist of a set of national and regional schemes with different characteristics and rules that allows major developing countries to make differentiated contributions to the overall global effort to cut emissions
    
7. be part of a set of measures to tackle climate change that is consistent and effectively co-ordinated across all jurisdictions throughout Australia , removes duplication of taxes and regulation, and avoids economic distortions resulting from a multiplicity of overlapping state and federal schemes
    
8. not disadvantage “early movers” in Australian industry, by recognising past efforts to abate greenhouse gas emissions, both direct and indirect (including the impact of clean fuels on reducing emissions from the use of petroleum products)
    
9. set appropriate emission baselines that take into account the variability of emissions from year to year (including the impact of refinery maintenance shutdowns or very low margins on refinery utilisation)
    
10. allow for broad and equitable treatment of all sectors of the economy to ensure that no single sector is disproportionately burdened
     
11. take a holistic view of emissions from oil refining that recognises emissions may increase to produce fuels that enable a decrease in emissions from vehicles so that overall greenhouse gas emissions are decreased
     
12. take into account that greenhouse gas emissions by companies may increase even though their emissions by unit of production or sales may decrease
     
13. address the issue of providing greater long term certainty for investors in energy and energy-intensive industries including long term permit availability to allow for risk management through greater market certainty and secondary market development.
     

July 2007