KEY POINTS:
Australia could face the biggest climate change challenges of any developed country, says its Environment Minister Peter Garrett.
Mr Garrett yesterday spoke at a breakfast meeting in Auckland of the New Zealand Business Council for Sustainable Development where he warned of a water shortage crisis in Australia.
"We are very dry there."
Mr Garret - former lead singer of rock band Midnight Oil - said that among the world's developed countries Australia would probably be the most vulnerable to climate change impacts.
"Building resilience will be critical."
Mr Garrett said Australia had to prepare for the inevitable impacts of climate change and the most serious situation it faced was the "parlous" Murray-Darling Basin.
The basin included the three largest rivers in Australia and three million Australians were directly dependent on its water.
It contained 42 per cent of the nation's farmland and produced 40 per cent of the nation's food but was under threat from over-allocated water resources, salinity and climate change.
Last year the region had faced an unprecedented and dangerous water shortage. Mr Garrett said water was a compelling driver for Australians to take climate change seriously.
It was time to provide national leadership on the climate change issue which the previous government had ignored, he said.
He expected the carbon pollution reduction scheme would be introduced to Parliament by 2010.
The Government aimed by 2050 to have reduced emissions by 60 per cent of 2000 levels.
That would require a substantial transformation of the economy which was currently energy intensive, he said.
In the meantime efforts were being made to get Australians to cut back on energy use.
"The market price will take its full effect over time but the interim focus is on opportunities for households and businesses to quickly reduce their emissions."
The Government had committed about $1 billion to help households and communities budget for greater energy and water efficiency.
Mr Garrett was pleased Australia and New Zealand had engaged on a bilateral climate change partnership.
He noted that yesterday was an "auspicious day" with the passing of the emissions trading legislation on Wednesday night.
Mr Garrett advised against any "tinkering" with the trading scheme in the short or medium term. "Businesses need certainty to accommodate, adjust and respond."
He expected the Australian scheme would be complementary and able to be integrated with the New Zealand version over time.
He had a "sense of optimism" about New Zealand's future. "I think your prospects are good."
