Climate Change – will the financial system survive?

One of the few bright spots in an otherwise dismal global response to the escalating climate crisis has been the preparedness of financial market regulators to force their regulated institutions to face up to the implications of climate risk.

In so doing, they have been acutely aware of the lessons learnt from the 2008 Global Financial Crisis, where scenario analysis, expert financial modelling and stress testing failed to foresee the crisis and the consequences for the banking system, investors and business alike. As a result, the global financial system was only save from collapse by a massive trillion-dollar bail out, for which the banks and corporations who caused it have yet to be held accountable.

When questioned by the Queen in 2008 as to why the crisis had occurred, the British Academy, after much introspection, responded that a “psychology of denial” led to “the failure of the collective imagination of many bright people … to understand the risks to the (financial) system as a whole.”

The reaction to the ominous warnings in the first part of the Intergovernmental Panel on Climate Change’s (IPCC) 6th Assessment Report, recently released, demonstrates that the same psychology of denial is alive and well, particularly in Australia. The financial press has erupted with ever-more incredulous claims as to why gas, oil, and even coal are absolutely essential to solving the climate crisis. Politicians are suddenly experts in silver bullet technologies that will solve our problem without understanding the limitations of their claims, and trawl the web even more vigorously than normal for any sliver of denialist evidence that the climate issue might just go away.

Fortunately, regulators with independent mandates to ensure the stability of the global financial system are taking their responsibilities seriously. To make climate risks more transparent, central banks and regulators globally are stress-testing the financial system. Most notable have been initiatives by the Task Force on Climate-related Financial Disclosures (TCFD), the European Central Bank (ECB) and the scenario work of the Network for the Greening of the Financial System (NGFS). In Australia, regulators have coordinated their work through the Council for Financial Regulators, with the Australian Prudential Regulatory Authority (APRA) initiating a climate vulnerability assessment for banks, encompassing scenarios up to 3°C of global mean warming, and issuing draft guidance for companies to stress test their own finances against scenarios up to 4°C warming.

Stress tests are simulations, relying on scenarios of future circumstances, and on models of the climate, the economy and the financial system. These techniques are valuable in reasonably well-understood circumstances, but they have severe limitations in addressing the threats which climate change now presents. The latest IPCC report has begun to discuss these issues, which include non-linear processes such as climate tipping points, cascade effects and radical uncertainty, where probabilities cannot be attached to specific outcomes, but even now the IPCC remain relatively reticent on these potentially existential, but increasingly possible, threats.

It is particularly challenging to map first-order physical climate warming impacts onto the second-order impacts in the social and financial spheres because it depends on the responses of complex human systems which cannot be reduced to probabilistic terms. In a complex world, systemic risks can arise from interactions between changes in the physical climate and human systems, so that small changes can lead to large divergences in the future state of human society.

Scenario analysis creates coherent, credible stories about alternative futures, allowing for constructive discussion on alternatives that should take into account the full range of credible evidence. But too often it is devalued and represents little more than sensitivities around some conventional strategic plan. Scenarios, properly used, can assist in securing a safe and stable future, but only if applied with brutal honesty in exploring extremes and not just a predetermined path.

Unfortunately global leaders, and Australia’s in particular, have not acted fast enough to avoid locking in extremely dangerous, and potentially catastrophic, climate impacts. Those impacts are close to moving beyond human control as global warming accelerates, evidence of which was clearly seen with the unprecedented 2019-20 Australian and Californian bushfires, the Chinese floods and Indian extreme temperatures. Even greater extremes are occurring in recent weeks in the Western USA, Canada, the Arctic, Siberia, Europe, China and the Amazon, resulting in some impacts that were not projected until around 2100.

In that context, the approach currently being used by regulators in assessing the future assumes compliance with the Paris Climate Agreement, unsustainable economic growth, a reliance on technologies not yet proven or deployed at scale, an overshoot of the Paris temperature target, and a big continuing role for gas. This worldview is being rapidly overtaken by events.

Scientists and analysts consider 4°C of warming to be an existential threat, incompatible with the maintenance of human civilisation, and 3°C to be catastrophic, perhaps leading to outright chaos in the relations between nations. Applying stress tests to such circumstances is problematic. Even at 3°C, the impacts may be so great as to be potentially infinite and unquantifiable, making scenario testing largely irrelevant.

It is unlikely that the banking system could survive such levels of warming, as discussed in our latest report: “Degrees of Risk: can the banking system survive climate warming of 3oC?”

Markets crave stability, but the world is entering an era of instability and uncertainty driven, inter alia, by climate-related financial risks. This makes the current approaches to managing these risks not fit-for-purpose. Sensible risk management, especially for highly uncertain events such as we are now facing, demands a precautionary approach, which must be applied to prevent these risks materialising.

Such precautionary action must ensure temperature outcomes do not trigger further tipping points or cascading effects which move the climate system beyond human influence, and are capable of returning it to the stable climate conditions under which human civilisation flourished. This means emergency action to keep the temperature increase to a minimum, as close to 1.5°C as possible, coupled with drawdown of current atmospheric carbon concentrations.

If the financial system is to survive and prosper, reactive disclosure of risks alone is no longer enough; time is short and mitigating those risks must become the absolute focus of regulators and regulated alike.

Company directors have a fiduciary responsibility to identify the risks to which their organisations are exposed, and to implement suitable systems to manage those risks. In the context of climate risk, boards of directors have too readily adopted recommendations from regulators and from supranational organisations such as the International Energy Agency or the IPCC, without bothering to understand the limitations of such analysis, thereby failing in their fiduciary responsibility to fully assess risk.

Regulators, here and overseas, exert great influence over financial and corporate players. If climate risk regulators imply warming of 3-4oC is manageable or can be adapted to, and such thinking becomes enshrined in the corporate psyche, as is currently happening, then regulators will be institutionalising failure, which is certainly not their intent.

Instead, regulators must now demand that the regulated proactively disclose what emergency precautionary action they are taking to ensure the world remains as close to a 1.5oC global mean temperature increase as possible.

This is just one change amongst many that must occur if humanity is to survive and prosper through the 21st Century and beyond. And it is an important one, because we cannot afford another failure of imagination.

Ian Dunlop is Chair, Advisory Board, Breakthrough National Centre for Climate Restoration.
David Spratt is Research Director of Breakthrough.

This article was published in Pearls & Irritations on 17th August 2021

The Net Zero Emission Illusion

As the need for serious action to prevent runaway global warming becomes critical, it is not surprising that efforts from the denialist lobby to prevent that action intensify, albeit in more subtle form than the blanket refusal of yesteryear to even accept that a climate problem existed.

Around the world, companies, investors, governments and other institutions are committing, with much self-congratulation, to reach net zero emissions by 2050 (NZE2050), the point at which any remaining emissions can be counterbalanced by offsetting absorption in carbon sinks, using technologies which currently do not exist at scale.

Regulators and central banks, concerned that global warming might de-stabilise the world’s financial system, are urging their regulated institutions to disclose the implications of climate change risk to their investors, and to undertake stress testing against scenarios with up to 4oC of global mean warming relative to pre-industrial levels.

Missing from this debate is any understanding of the real risks posed by climate change. Recent events such as the unprecedented 2019/20 Australian and Californian bushfires, Chinese floods and Indian extreme temperatures, along with even greater extremes occurring this year in the Western US, Canada, the Arctic, Siberia, Europe, China and the Amazon, should be a wake-up call that climate impacts are accelerating and close to moving beyond human influence.

But that is far from the case. Despite impassioned pleas from scientists and much lofty institutional rhetoric from global leaders on the need for emergency action, the emphasis on a NZE2050 pathway, is actually locking-in extremely dangerous, and potentially catastrophic, climate outcomes by refusing to rapidly reduce carbon emissions, which is now necessary to stop runaway warming.

The 1.5°C global mean warming, the lower limit of the Paris Agreement, is inevitable by 2030 irrespective of any mitigation action in the interim. The upper 2°C limit is likely before 2050, with the possibility that irreversible, self-sustaining warming may be triggered by tipping points between 1.5 – 2°C. The current global trajectory is likely to result in catastrophic warming in excess of 3°C in the second half 21C, with little chance of changing that trajectory over the next two decades by mitigation alone. 4-5°C warming is possible before 2100. The dangerous impacts we are already experiencing are happening at only 1.2°C warming.

3°C warming would be catastrophic, perhaps leading to outright chaos in relations between nations, and 4°C is an existential threat to human civilisation, with many parts of the world becoming uninhabitable leading to mass migration and social conflict. Regional temperature increases on land will be considerably higher than these global means, increasingly beyond the limits within which human physiology can operate. These temperature increases cannot be adapted to, rendering financial system stress testing irrelevant.

The assumption behind the current enthusiasm for NZE2050 is that, with a bit of tweaking and gradual action, an orderly transition can ensue, leading to a perpetuation of the current economic system and its power structures.

That is no longer possible. The degree of change required to avoid catastrophic climate impacts, and the speed with which it must be implemented, means that emergency action, akin to a wartime level of mobilisation, is essential. A major discontinuity is inevitable; we must re-boot our societies on to genuinely sustainable pathways if human civilisation is to survive

NZE2050 could result in mean temperature increases above 3°C if global tipping points trigger within the 1.5 – 2°C Paris range. As our latest Briefing Note, “Net Zero 2050 – a dangerous illusion” indicates, net zero must be reached as soon as possible, ideally by 2030, if catastrophic outcomes are to be avoided. This is a massive task far greater than anything yet contemplated officially.

Sensible risk management in these circumstances demands a precautionary approach quite different from conventional risk-management practice. It must ensure, to the extent possible, that temperature outcomes do not trigger these tipping points, and is capable of returning the climate system to the stable climate conditions under which human civilisation flourished. This means emergency action to keep global temperature increase to a minimum, as close to 1.5°C as possible, coupled with drawdown of current atmospheric carbon concentrations from the current level around 420ppm CO2, to below 350ppm CO2. The technology to achieve such drawdown in the limited time available, is not yet fully to hand at scale, further adding to climate risk.

The Australian mainstream media, with a few exceptions, ignore these realities, consumed with the supposedly disastrous short-term economic implications of any climate action, oblivious to the infinitely greater cost of inaction. The Australian Financial Review (AFR), recently opined that “Coal, along with oil and gas, will continue to supply the world’s energy during the decades-long transition to net zero”, and that, “as the demonisation of coal and gas by Australian activists shows, extremism makes the politics of the energy transition more challenging”.

The real extremists are organisations like the AFR, the Murdoch press, ideologues and fossil fuel vested interests around the world whose denialist stance has succeeded in allowing carbon emissions to continue to rise at worst case rates, placing humanity in grave danger with their insatiable greed and determination to hang on to the reins of power at all costs. If these views prevail, human civilisation as we know it will not survive.

Quite apart from the implications for humanity, directors of these organisations, even those who claim leadership on climate action like Shell, BHP, Rio, Woodside and Santos, are now in clear breach of their fiduciary responsibilities to their shareholders, because in so doing, they are destroying their shareholder’s, and their own, future. Ben van Beurden, Managing Director of Royal Dutch Shell conceded last year that: “Yeah, we knew. Everybody knew. And somehow we all ignored it.” That is not good enough, particularly as they had access to the best available science and for years have known perfectly well the implications of their actions. A failure made even more egregious by their current refusal to cut emissions rapidly, or far worse, their determination to massively increase fossil fuel use with gas-led recoveries on the erroneous, self-serving grounds it will reduce carbon emissions globally.

But nowhere is this leadership failure, and the moral and ethical vacuum behind it, more evident that with the current Australia Federal government.

Australia is one of the regions most exposed to climate threats, as the community is only too well aware from our recent drought, bushfire and flood experience. Yet politically, it is as if this never happened. For example, none of the recommendations of the Bushfire Royal Commission have been implemented, and many communities remain without adequate recovery support.

Policy, to the extent it exists, is decided by political advisers, with little real-world experience, align with fossil-fuel interests, and ideologically committed to the neoliberal unregulated market which has created the climate crisis, and proved incapable of solving it. Scared of the future, they have no vision for Australia other than a perpetuation of its fossil fuel past. Not surprising, given that former fossil fuel executives dominate government appointments, from the Prime Minister’s office down.

So reality is swept under the carpet as the government rushes headlong into its own gas-led recovery, quite deliberately designed to maximise the use of fossil fuels before the shutters finally come down on the industry.

However, the government recognised rising community concern over climate, and the electoral danger that poses if those concerns are ignored, so something had to be done. Ergo, multiple initiatives are announced, with great fanfare, to demonstrate their climate bona fides; resilience, disaster management, Great Barrier Reef research etc, all of which address the symptoms of climate change, but ignore its fundamental cause, which is excessive atmospheric carbon concentrations and the failure to rapidly reduce emissions

The Minister for Emission Reduction, Angus Taylor, even pours fuel on the fire by presiding over emission increases, re-assuring us that any climate issues will be solved with “technology not taxes “. This ignores the fact that for these technologies to work at scale, and in the short time now available, “taxes” in the form of carbon pricing are essential otherwise the massive subsidy enjoyed by fossil fuels, by not accounting for the damage caused by their use, will continue, markedly slowing the transition to a low-carbon future .

The Minister for the Environment, Sussan Ley, passes any responsibility for climate change to the Minister for increasing emissions, despite the fact it is the greatest threat to our environment; decries any duty of care to protect Australia’s children from climate harm as a result of her deliberations on approving coal mines; then makes common cause with a motley crew of climate denialist countries to prevent the UNESCO World Heritage Committee placing the Great Barrier Reef on the “in danger” list, despite the fact that it is obvious to all but the most entrenched ideologues that the reef is now in terminal decline due to climate change.

Geopolitically, the government’s immaturity and ignorance of Asia has totally disrupted relations with our largest trading partner, China, with subsequent Australian sabre-rattling designed to divert attention away from the far greater threat of climate change. After four years of Australian servility to the Trumpian cause and a long history of Western abuse, it is unsurprising that China is taking a more assertive stance in global affairs, whilst recognising that China has its own problems and wolf warrior diplomacy is not the mark of mature global leadership. But both sides sidestep the real threat of climate change, instead focussing on geopolitical point scoring. Overcoming that threat will require unprecedented global co-operation, otherwise everyone loses.

Part of which is to completely re-think the concept of defence. Vast amounts spent on ever-more sophisticated ways of killing one another are useless on a dead planet. Those resources are desperately needed to stave off the climate threat and implement genuinely sustainable, equitable, economic systems.

It is clear from its actions that the Federal government has absolutely no intention of taking climate change seriously. It has yet to commit to NZE2050, but may well do so finally at the November climate summit in Glasgow, attempting to present it, with yet more fanfare, as “Australian climate leadership”, much as John Howard did with the 1997 Kyoto Protocol “Australia Clause”, the greatest strategic mistake this country ever made which initiated three decades of climate denial.

The government has no appetite to address the big issues confronting this country, and is quite happy to destroy the prosperity and future of Australian society, its children and their own, in the interests of retaining power in the short-term.

The parallels with the Covid crisis are legion. With Covid, the government has shown itself manifestly incapable of leading or managing its core responsibilities, beset by corruption and secrecy. The climate challenge is far greater than Covid, and there are no vaccinations or quarantine against climate impacts, which from now on will increase inexorably absent decisive leadership.

The community must now seek that leadership elsewhere.

Ian Dunlop is Chair, Advisory Board, Breakthrough National Centre for Climate Restoration.
David Spratt is Research Director of Breakthrough.

This article was published in Pearls & Irritations on 8th August 2021

A call to the Australian people – demand serious action on climate change before it is too late.

After three decades of inaction, human-induced climate change is the greatest threat, and opportunity, facing this country, far outweighing the issues dominating our domestic political discourse, such as the US/China impasse, a faltering economy and religious freedom. The world faces the same threat. Climate change now represents an existential challenge which, if not addressed as a genuine emergency immediately, will destroy human civilisation as we know it within decades. Immediate, in that the actions we take today, particularly expanding fossil fuel use thereby increasing global carbon emissions, are locking-in that outcome.

Climate Emergency Action
Context & Governance


The Real Climate Challenge
After three decades of inaction, human-induced climate change is the greatest threat, and opportunity, facing this country, far outweighing the issues dominating our domestic political discourse, such as the US/China impasse, a faltering economy and religious freedom. The world faces the same threat. Climate change now represents an existential challenge which, if not addressed as a genuine emergency immediately, will destroy human civilisation as we know it within decades. Immediate, in that the actions we take today, particularly expanding fossil fuel use thereby increasing global carbon emissions, are locking-in that outcome.

In stark contrast, the disastrous lack of serious climate change policy in Australia stems entirely from the fact that Federal parliamentarians of both persuasions, despite access to the best possible scientific, economic, social and health advice, refuse to accept, even today, that climate change and its risks are real, let alone doing anything to address them. That denial is responsible for the increasingly maniacal contortions of ministers pretending to take climate action, but in essence intent upon doing nothing, despite the massive damage inflicted on the community by extreme weather.

The vitriolic exchanges between politicians regarding the linkage of drought, bushfires and climate change, confirm that our current political system is incapable of managing this threat. Likewise with much corporate, finance and media leadership, whose business strategies either totally contradict their rhetoric urging climate action, or are ideologically locked-in to climate denial.

The starting point in overcoming this extremely dangerous situation, must be acceptance of the real climate challenge we, and the rest of the world, face. A challenge far more serious than acknowledged by our Federal and State governments.

Climate change as an immediate, existential risk
Climate change is happening faster than anticipated, driven primarily by human carbon emissions from fossil fuel combustion, agriculture and land clearing. Uncertainties relate not to the basic climate science, which has been well-understood for decades, but to the speed and extent of climate impact, both of which have been badly underestimated.

• The first round of voluntary emission reduction commitments in the 2015 Paris Climate Agreement, if implemented would lead to a temperature increase of around 3.5°C, relative to pre-industrial conditions, by 2100 if not earlier – a world which leading national security experts describe as “outright social chaos”. At present, we are on track for around a 4.5°C increase, which would be “a world incompatible with any organised society”, resulting in a substantial reduction in global population, toward 1 billion from the current 7.5 billion.

• Dangerous climate change is occurring at the 1°C temperature increase already experienced. The 2°C Paris upper limit now represents the boundary of extremely dangerous climate change.

• To stay below 2°C, global emissions must peak now and be reduced by around 9% annually, something no country has ever achieved. The lower 1.5°C Paris target requires even more rapid reduction. Meanwhile, emissions rise in line with worst case scenarios.

• This Intergovernmental Panel on Climate Change (IPCC) analysis assumes only a 50-66% chance of meeting the targets. Not good odds for the future of humanity. To have a sensible 90% chance, there is no carbon budget left today to stay below 2°C, let alone 1.5°C. Thus all fossil fuel consumption should stop immediately. Obviously that is not going to happen, but new investment must stop now, and the existing industry wound down as fast as possible.

• Emissions from continued fossil fuel investment, including gas, lock-in irreversible, existential climatic outcomes today. Due to climate inertia, by the time the climatic impact of these investments becomes clear, it will be too late to take avoiding action. Hence the risk is immediate.

• Atmospheric aerosols produced by burning coal and oil are cooling the planet by around 0.3 to 0.5°C. As aerosol concentrations reduce with the phase-out of fossil fuels, a commensurate one-off increase in temperature is likely, compounding the problem of staying below warming limits.

• Proposed solutions to meet the 1.5°C target rely heavily on carbon removal from the atmosphere using negative emissions technologies, none of which exist at scale today. This is extremely dangerous, creating a false sense of security.

• The recent IPCC 1.5°C report understates key risks in moving from 1.5°C to 2°C warming. For example, increasing climate-driven refugees, exceeding tipping points that could push the world on to an irreversible path to a “Hothouse Earth”, Greenland and Antarctic ice sheet instability triggering multi-metre sea level increase. Exceeding 1.5°C poses huge risks both for humans and natural systems, but it is likely that will occur within a decade.

In summary, it is now impossible to limit temperature increases to 1.5°C, and probably to 2°C unless global leaders accelerate action on climate change to an emergency footing, akin to wartime.

This is no extreme, alarmist view, but objective risk management analysis of the science and evidence. It is also not new; it has been clear for at least a decade that these were the risks, yet officialdom globally has deliberately ignored them at the behest of fossil fuel interests and conservative acolytes.

Tipping points
The tipping points referred to above are the most critical aspects of climate change, as it does not necessarily progress in a linear manner correlated with increasing atmospheric carbon concentrations. Instead, at a certain point, it may flip abruptly from one relatively stable state to another far less conducive to human development. For example, Arctic sea ice is melting rapidly as temperatures rise 2-3 times faster than the global average. As a result, less solar radiation is reflected back to space off the white ice; instead it warms the oceans, which in turn warm the seabed and surrounding land, melting permafrost, leading to further carbon emissions and accelerated warming.

15 non-linear tipping points were identified around the world some years ago. They represent the greatest risks of climate change in that, once triggered, they become irreversible, beyond humanity’s influence, with catastrophic outcomes. Some are inter-related; once one triggers, others may follow in a cascading effect globally.

Unfortunately, the implications of tipping points are not quantified in IPCC analyses, in part because scientists do not know enough about their mechanisms to accurately assess the potential impact. This emphasises the importance of exercising the precautionary principle, by early reduction of carbon emissions. As Professor Hans Joachim Schellnhuber, founder of the Potsdam Institute for Climate Impact Research puts it: “This is particularly true when the issue is the very survival of our civilisation, where conventional means of analysis may become useless”.

The latest assessment by leading scientists suggests that tipping points may occur earlier than previously thought. Indeed, there are indications that 9 inter-related tipping points are underway, with one, the West Antarctic ice sheet, now irreversible, leading eventually to a 3 metre sea level rise. Others may be triggered between 1 – 2°C, raising the prospect of a global cascade effect even below the upper 2°C limit of the Paris Agreement. Hence the importance of staying below that limit, however difficult.

They conclude:
“In our view, the evidence from tipping points alone suggests that we are in a state of planetary emergency; both the risk and urgency of the situation are acute.
We argue that the intervention time left to prevent tipping could already have shrunk toward zero, whereas the reaction time to achieve net zero emissions is 30 years at best. Hence we might have already lost control of whether tipping happens. A saving grace is that the rate at which damage accumulates from tipping – and hence the risk posed – could still be under our control to some extent.
The stability and resilience of our planet is in peril. International action – not just words – must reflect this.”

In short, prayers and platitudes from global, and Australian, leaders no longer suffice.

The prevalent idea that the world can still make an ordered, gradual transition to a low-carbon world, for example to achieve net-zero emissions by 2050, is now totally unrealistic. We have to take emergency action to reduce carbon emissions as fast as possible. This means the big emitters, whether private fossil fuel companies or state entities, must take the brunt of the cuts. Other contributions, from communities, agriculture etc are important, but will not achieve the required reductions in the limited time available. Solutions would be along the following lines;

• Accelerate innovation to further reduce cost of low-carbon energy alternatives

• Ban investment in new fossil fuel capacity from 2020, then phase-out coal, then oil & gas as fast as possible as alternatives become available

• Remove subsidies to fossil fuel industries (currently A$42 billion in Australia, more than our Defence budget)

• Introduce realistic carbon pricing

• Tighten controls on fugitive emissions from fossil fuel operations

• Accelerate electrification to eliminate fossil fuel rapidly.

• Redesign agricultural practices, emphasis on soil carbon, ocean sequestration and reforestation

• Strong emphasis on energy conservation and efficiency

• Encourage debate and reframing of values toward evolution of sustainable societies in support of this transition

• Provide, and plan for, a fair transition for those people and regions adversely affected.

The immediate priority must be to stop fossil fuel expansion – coal, oil or gas – both here and overseas.

What Does Emergency Action Mean?
The climate threat is increasingly obvious as extreme events escalate globally. As a result, the climate emergency call is being taken up widely. In essence it means, akin to wartime, the suspension of business-as-usual, politically, corporately and socially, to do whatever it takes to resolve the climate crisis. There is no higher priority.

This does mean massive societal and cultural change, and fundamental reframing of virtually every policy arena; climate, energy, foreign affairs, defence, health, immigration, agriculture to name but a few. The upside is that Australia has far greater potential to prosper in the low-carbon future than in the high-carbon past, as experts have long been pointing out. But realizing that potential requires an all-encompassing commitment to a low-carbon emergency transition. Certainly there will be costs, but the costs of ignoring climate change and continuing Australia’s current climate denialist stance will be far greater.

Addressing the Existential Climate Threat
The immediate existential threat of climate change is a global problem that cannot be solved by Australian action in isolation. It requires unprecedented levels of global co-operation to dramatically reduce carbon emissions. This may seem fanciful at a time when many leading countries are moving toward isolationism. However this existential threat is unlike anything humanity has experienced historically; if human civilisation as we know it is to survive, it is in everyone’s interest to overcome it.

Climate change has the potential to create major conflict over issues such as migration, water and other resource availability. It has already been a major factor behind the Syrian crisis, Brexit and Trump’s Mexican Wall, though this is rarely acknowledged.

As climate impacts mount, if the outcome is increasing isolationism and conflict, then civilisation will collapse. The question is whether, and how, leadership and statesmanship will emerge to trigger co-operation and avoid collapse?

New leaders must accept some hard truths:

• Climate change is not just an environmental issue. It is now fundamental to the economic and social prosperity of the country, indeed to our survival.

• Emissions reduction commitments must focus on absolute outcomes, not per capita or relative comparisons. The first round of Paris voluntary emission reduction commitments were woefully inadequate. Within that, the Australian contribution of 26-28% reduction by 2030 (less than half that amount if Kyoto carryover credits are applied) was one of the worst. To claim that “we are meeting our Paris commitments” is worthless as a real contribution to the global climate challenge

• With no global carbon budget left to stay below 2°C, the emissions of every major emitting country and company need to reduce, fast. Whether China, the US, EU, India, Australia, Exxon, Shell, BP, BHP, Rio Tinto etc.

• Further, a country’s climate impact must be assessed by including fossil fuel exports. Climate change is a global problem, and emissions have global impact irrespective of the point of consumption. Whilst it was convenient for the UNFCCC to adopt an accounting mechanism in the 1990s based upon consumption point, that is no longer relevant given the global climate risk we now face.

• On that basis, Australia will shortly become the third largest global carbon polluter if current coal and LNG expansion plans are realised. We are already one of the world’s highest per capita carbon polluters. Far from being an insignificant “1.3% of global emissions”, what Australia does matters in emission terms.

• Arguments that Australian, or any other country’s, coal exports, can expand on the grounds that a particular coal is better quality than others are nonsense in the circumstances where there is no global carbon budget. All coal consumption must reduce.

• Likewise with the expansion of LNG exports. Gas has less emissions per unit of energy than coal, but it is still a fossil fuel adding to the global emissions burden. Given the rate of emission reduction required, there is no justification for gas expansion. The argument that gas expansion is justified because it is replacing coal has no validity in the absence of a carbon budget.

• Similarily, fracking expansion, deep water oil exploration whether in the Great Australian Bight or the Arctic, make no sense in the current climate context.

• Negative emission technologies can no longer be used as a justification for fossil fuel expansion. There is no prospect of them being applied at scale in the limited time available. They may have longer term benefit, but the immediate risks are so high that they cannot be relied upon for the time being.

• There is a great deal of criticism directed at the supposedly excessive subsidies given to renewable energy technologies. These pale into insignificance compared to the massive A$42 billion subsidy given annually to the fossil fuel industries in Australia. The latter must be removed rapidly and more support given to renewables to accelerate the rate of change.

In an Australian context, it makes absolutely no sense to build our economy on fossil fuel resources and technologies which are fundamentally unsustainable. It is particularly untenable, in geopolitical terms, when Australia has some of the best low-carbon energy resources in the world, and is not using them.

Given that Australia is one of the countries most exposed to climate risk, Australia’s national interest, and national security, is best served now by reversing years of climate denial and taking strong global leadership in the transformation to the low carbon world.

In 1964, Donald Horne wrote:
“Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people’s ideas, and, although its ordinary people are adaptable, most of its leaders (in all fields) so lack curiosity about the events that surround them that they are often taken by surprise”.

Is that still the case in the climate context, or do we have leadership and statesmanship potential capable of rising to the greatest threat, and opportunity, this country has ever faced? It is certainly true that current leaders have been taken by surprise at the ferocity of climate change impact, despite having been warned about it for years.

How good is Australia’s climate leadership?
In short, appalling, as the recent disputes on the linkage between climate change, drought, water availability and bushfires confirm only too well.

No single weather event can be exclusively attributed to human-induced climate change. However it is patently obvious, from the basic science and evidence, that climate change is intensifying extreme weather events around the world. There is no doubt that it is contributing, directly or indirectly, to the extreme events that are currently impacting Australia. From the unprecedented drought and bushfires, to the Townsville floods earlier this year, and the recent severe Sydney storm. To claim otherwise, whether as Prime Minister, Cabinet Minister or conservative media cheer-leader, demonstrates profound scientific and economic ignorance.

For three decades, attempts to use science, evidence and rational debate to gain political and corporate commitment to urgent action have failed abysmally in the face of massed fossil fuel interests, supposed “conservatism” and political self-interest – determined to preserve our high-carbon “status quo” whatever the cost to the community. Leaders have been repeatedly warned of the risks, but deliberately chosen to ignore them. We are now paying the price, with the Australian taxpayer and society picking up the bill for conservative ideological indulgence. Lives and livelihoods are being lost and impacts will get much worse, absent emergency action.

• Politics
The Prime Minister continues the Coalition’s climate denialist mindset, and masterly inaction, initiated by John Howard in the late 1990s. He refused to attend the critical UN Climate Summit last September, subsequently lecturing the UN that “Australia is doing its bit on climate change”. He cannot bring himself to admit the linkage with extreme weather events.

Minister Taylor assures us that Australia has “a track record on climate of which all Australians can be proud”. In reality, the Australian government for years has deliberately set out to prevent any serious global climate agreement being reached. He tells us Australia will meet it wholly inadequate Paris emission reduction commitments “at a canter”, when it is patently obvious it will not, even including unused Kyoto carryover credits. The very fact that the government attempts to justify the use of these credits at the current UN Madrid COP25 climate meeting underlines its brazen denialism. John Howard extorted these credits, via the Australia Clause, by holding the world to ransom at the last minute in the 1997 Kyoto Protocol negotiations – unjustified then and absolutely unjustified now in the face of a climate emergency.

Emissions, we are told, are falling when they are going up. Minister Hawke insists the Australian government is doing “more than anyone else” on climate change. Minister Littleproud, in charge of drought and natural disasters, cannot make his mind up if climate change is even relevant to his responsibilities. Minister Canavan claims that expanding coal and gas use would be a sensible response to climate change, and refuses to plan for a transition away from fossil fuels. Minister Birmingham considers France’s push for Australia to adopt more realistic climate change targets, as part of an EU trade deal, as “unprecedented”, implying it would be contrary to the national interest.

So the propaganda ramps up, worthy of any totalitarian regime, completely ignoring reality, highlighting the absence of any credible climate and energy policy as ministers shoot from the hip for short-term electoral advantage.

Australia, on any objective measure, with its 26-28% emissions reduction target by 2030, in practice more than halved if unused Kyoto credits are applied, is abjectly failing to contribute its fair share to global climate action, as it has done consistently since the 1990s. Not just failing, but now adding fuel to the fire by attempting to massively expand coal and gas use when emissions must fall dramatically if even worse catastrophes are to be avoid than those already happening. We are not “just an inconsequential 1.3% of global emissions” as Ministers insist; if the government has its way, we will shortly be the third largest carbon polluter in the world, exports included which is the only realistic way of assessing our climate impact.

The Prime Minister’s knee-jerk response to mounting pressure for climate action is to invoke the perennial defence of national sovereignty to stop dastardly “global institutions” from interfering in our affairs. But climate change is a global problem, requiring unprecedented collective action. Without it, and without leaders capable of understanding that reality, we are headed for global and national collapse. Nobody is seeking to “elevate global institutions above the authority of nation states”. It is the nation states that are failing their communities.

The Opposition are little better, having made contradictory bets during the May election by claiming strong climate change credentials, yet simultaneously supporting development of Adani and other coal mine projects. Their post-election reversion to a pro-fossil fuel stance does not suggest strong climate leadership potential. Anthony Albanese’s latest support for the continuation of coal exports demonstrates profound ignorance of climate science, risk and energy markets, in the process doing nothing for the future prospects of coal miners.

But perhaps the best indicators of political leadership failure on climate change, are the recent antics of the National Party. Not content with the Prime Minister and Barnaby Joyce throwing a lump of coal around in parliament last year, at an executive dinner following their September 2019 Federal conference, a lump of coal in a glass jar, and a “Start Adani” tee shirt worn by self-proclaimed “Minister for Coal” Matt Canavan and Queensland Coal, were auctioned by Barnaby Joyce, no less. Great hilarity all around, just confirming the utter contempt in which this Government hold the Australian people as they grapple with the threat of climate change.

At the State level, the understanding of a climate emergency has yet to penetrate the fossil fuel States. NSW and Queensland are intent on massively expanding coal and CSG, likewise with LNG in WA. Environmental regulators in NSW and WA have exercised their independent mandates to stop some new coal mine development, and seek greater transparency in the handling Scope 3 (exported) emissions, partly in regard to climate change concerns given the absence of any realistic federal climate and energy policy. In both cases the State Government has moved to defuse these initiatives by proposing legal changes allowing unfettered fossil fuel expansion, confirming their ignorance of climate realities, and their subservience to fossil fuel interests.

Business attitudes toward climate change until recently, with a few notable exceptions, have followed, and frequently dictated, the Federal Government’s denialist stance. The resource sector in particular has done everything possible, for years, to prevent or slow the introduction of sensible climate policy, via lowest common denominator industry bodies such as the Business Council of Australia, the Minerals Council of Australia, the Australian Industry Greenhouse Network, the Institute of Public Affairs and so on.

The exceptions are companies such as BHP and Rio Tinto, who have taken far stronger climate action, but even they have yet to accept the reality of a climate emergency.

Attitudes are beginning to change. First, the legal implications, and liabilities, of ignoring climate risk are better understood, as emphasised by Kenneth Hayne. Second, investors are increasingly nervous about their exposure to carbon risk as the climate science and evidence evolves, and are moving away from fossil fuels. Third, Australian financial regulators, in common with their colleagues globally, are calling for far greater transparency on climate risk to avoid potential financial market collapse. Companies are increasingly complying with the voluntary recommendations of the Task Force on Climate-Related Risk Disclosure, albeit at present most are reactive, rather than proactive, responses. Fourth, the competitiveness of low-carbon alternatives to fossil fuels has vastly improved, bringing a range of new players into the arena, diluting the strangehold on government policy previously enjoyed by the resource industries, and spurring the transformation to a low-carbon world.

Perhaps most important, it is gradually dawning on corporate leaders that unless climate change is addressed urgently, social collapse will destroy the markets they rely upon for their prosperity.

All of which may result in more enlightened business leadership emerging, albeit not evident as yet. The resource sector continue to pursue rapid fossil fuel expansion, even though it is now clearly contrary to their own best interests, and to those of their shareholders.

Since the advent of the Howard government, the senior levels of the Australian Public Service have been progressively politicised and are now generally unwilling to offer free and frank advice, or to carry out work, that is contrary to the government’s desires. As a consequence, thinking that would have once been done about eventualities that may face the government is not being done well, especially in regard to climate change.

Hence the government has been caught off-guard, unprepared and playing catchup on key climate-related issues which will henceforth dominate the political agenda, including drought, bushfire risk and the Pacific.

Initiating work on climate change that is not specifically mandated by ministers is in general not occurring. Where it does happen, a key task is to ensure that it is not overtly identified as climate focussed. This is a particularly stark expression of the government’s denial on climate risks and how it has neutered public policy advice.

Likewise the security and intelligence community have not been on the front foot in regard to the implications of climate change for national security.

Department of the Environment Deputy Secretary Jo Evans demonstrated in a recent Senate Estimates hearing, in response to a question as to whether the climate situation was getting worse, the excruciating contortions which senior public servants are forced into by the government’s climate denial agenda.

The conservative media, notably the Murdoch press, have for years played a major climate denial role, which is becoming ever more hysterical as the prospect of serious climate action nears. The preparedness of newspapers such as The Australian to continually distort, obfuscate and undermine the climate science is completely at odds with any notion of responsible journalism. Which is complemented by the statement by Chairman Rupert Murdoch, in response to a question at the recent News Corp New York AGM, that “there are no climate deniers here”. From a corporate governance perspective, one of the most misleading and deceptive statements ever made by a listed company chairman.

Other media groups have taken a far more balanced approach, notably the ABC, The Guardian, Crikey and Fairfax prior to the Nine takeover. The Australian Financial Review on the other hand tends more to the Murdoch denialist line.

However, apart from The Guardian, they have yet to fully embrace the need for emergency action.

To conclude, it is patently obvious that the Australian political system, as represented by the two main parties, has left the country totally unprepared to face the impact of climate change. It does not have leaders who can be trusted to, or are capable of, managing the climate emergency domestically, let alone having the statesmanship required to contribute to global collective action. There is little chance of such leadership emerging, given the short-termist, adversarial nature of current politics.

On the other hand, the bureaucracy has many capable people who are currently constrained from addressing the climate emergency. They need to be freed up to do so

Business has been sitting on the fence re climate change for far too long. That is beginning to change, but not fast enough. Fossil fuel industry denialism and disruption of sensible climate policy must stop.

Strong media understanding of, and support for, emergency action is essential if it is to be successful. Not least to counter the malevolent influence of the Murdoch press.

Governance for the Climate Emergency
The first responsibility of any government, and opposition, is the security of the people they represent. Recent commentary by senior Coalition politicians from the Prime Minister down indicates that either they have absolutely no idea of the implications of the climate science, or they are deliberately ignoring those implications, prepared to put the immediate security of the Australian people, and their future prosperity, at grave risk.

If the former, they are in breach of their fiduciary responsibility to the community to understand the risks facing the country and to act honestly to address those risks. They have access to the best possible scientific advice; it is criminally irresponsible to ignore that advice, hiding behind denialist ideology, pretending the problem does not exist.

If the latter, they are morally and ethically bankrupt, prepared to sacrifice Australian lives and livelihoods in the interests of short-term political advantage, pressured by vested interests in the fossil fuel industry and media. Given the increasingly hysterical political push-back from these interests as the time for emergency action arrives, this is the most likely explanation.

Having dug themselves a massive climate denialist hole, and lacking the honesty and integrity to climb out, they are now doubling down, determined to drag the rest of the community in with them. They assume that climate change is just another item on the political agenda which can be handled with the time-honoured process of wheeling and dealing for political advantage, which it patently cannot.

In confronting the greatest threat this country will ever experience, the unfortunate reality is that those managing the affairs of this nation have absolutely no interest in addressing that threat, or the capability to do so even if they chose. Further, investors and business, using current approaches, are not going to effectively contribute to managing the climate challenge in the limited time now available.

Most importantly in the climate context, an emergency implies acting early rather than later, otherwise mitigation becomes secondary to adaptation, as incumbencies throw their resources at managing symptoms, the climate impacts, rather than paying adequate attention to the underlying climate change cause . This would lead into a “death spiral” toward social collapse, as climate impacts escalate unconstrained. The beginnings of this can already be seen in responses around the world in the last few weeks as drought and bushfires enter uncharted territory. Australia and California, for example, are totally unprepared for the ferocity of the fires now being experienced.

The only way climate change can be addressed, domestically and globally, with any realistic chance of avoiding the worst impacts, is akin to a wartime response. In wartime:

• An over-riding issue is identified, a threat to national and/or human security, which has to be the absolute focus of national, and in this case, global activity. There is nothing more important.

• Climate change is now such an issue.

• To address it, the best possible expertise must be brought together in:

• A governance structure, possibly a government of national unity, comprising the best leadership from politics, business, finance, academia and community.
• A technical support framework, to identify and act upon the optimal solutions to the climate challenge

Obviously such changes are far from anything being contemplated officially. However, the existential, immediate nature of climate risk provides the catalyst to break through established denialist barriers, creating a new framework for action.

The government claims a mandate from the electorate for its supposed climate change policies as set out at the May 2019 election. In reality the government deliberately refused to articulate to the community the real implications of climate change. These were spelt out in numerous reports from the government’s own risk advisors, along with scientific advice, most recently in the various reports relating to the National Disaster Risk Reduction Framework published in 2018/19. To quote, inter alia:

“The cost of disasters to society and the economy are growing and it is becoming increasingly apparent we need to urgently do more than change at the margin”

“Natural hazards intersecting with societies are not only possible, but are highly plausible, and their effect will likely exceed the capacity of the nation. The consequential damage, loss and suffering would be immense and enduring”.

The government ignored the advice; the costs to the community from this misleading and deceptive conduct are now in plain view as drought and bushfires escalate. The opposition likewise refused to articulate the real implications of climate change, whilst supporting the opening up of the Galilee Basin coal deposits which will heap further damage on the community.

Neither party has a mandate to destroy the future of Australian society, which is the implication of their current policies. Both have deliberately misled the people, and failed in their primary responsibility to ensure the security of the nation. For which there is no excuse.

When parliamentarians act in this irresponsible manner, they have no right to remain in office, even more so when the issue is the greatest threat facing the nation.

Accordingly, the Australian people must now demand that the responsibility for handling all matters relating to climate change be vested in a wartime governance structure as above. Constitutional advice on the mechanism for establishing such a structure would be required from the Governor General and other experts. Given the all-encompassing nature of climate action, this may mean both Government and Opposition stand aside in the interests of national security.

During their Christmas break, parliamentarians might contemplate why the best interests of constituents are now served by them stepping aside.

On Australian climate change leadership, Donald Horne is still right “—— most of its leaders so lack curiosity about the events that surround them that they are often taken by surprise”. Indeed, but perhaps that might now change.

Published in Pearls & Irritations, 12th & 13th December 2019

Submission to the Western Australia EPA on Greenhouse Gas Emissions Assessment Guidance


• Preamble

• Climate Change: the global context

• Climate Change Impact

• Existential Risk Management

• Political & Corporate Attitudes

• Community Response

• Legal Implications

• Conclusions and recommendations on Greenhouse Gas Assessment Guidance

Thank you for the opportunity to make a submission to the Western Australia (WA) Environmental Protection Authority (EPA) on Greenhouse Gas Assessment Guidance.

The world is confronted by the urgent need to minimize the impact of human-induced climate change. Overwhelming scientific opinion, and evidence, has long established that this is being caused by carbon emissions from fossil fuels use, agriculture and deforestation. Warnings over three decades that carbon emissions must be rapidly reduced, if catastrophic outcomes are to be avoided, have been ignored within political and business circles, Global carbon emissions are now at record levels and fossil fuel use massively expanded. The result is that climate change is occurring far faster and more extensively than expected. The risks to the climate system from increased concentrations of carbon dioxide have also been badly underestimated by the scientific community. Human-induced climate change is already a major economic and social cost and the greatest threat to preserving sustainable environments, and hence societies, at global, national and local levels.

This is the context in which the EPA’s Greenhouse Gas Assessment Guidance must be considered.The rationale for that view is as follows:

Climate Change: the global context
The recent Intergovernmental Panel on Climate Change (IPCC) report on the impact of 1.5degC and 2degC warming above pre-industrial levels sent a stark reminder to humanity about the existential threat posed by climate change. That is a threat posing permanent large negative consequences to humanity which can never be undone. One where an adverse outcome would either annihilate intelligent life or permanently and drastically curtail its potential .

The 2015 Paris Climate Change Agreement, the successor to the Kyoto Protocol and which Australia has ratified, came into force on 4th November 2016. It requires the 196 countries participating to hold global average temperature to “well below 2degC above pre-industrial levels and to pursue efforts to limit the increase to 1.5degC” . Regional temperature variations would be far greater than these global averages, rendering many parts of the world uninhabitable even at 2degC, beyond the capacity of human physiology to function effectively. This may well be the case across many parts of WA.

The figure demonstrates the speed with which global emissions have to be reduced to limit temperature increase to 2degC (blue, yellow and purple lines, representing rates of reduction beyond anything achieved historically). The later emissions peak, the more rapid the reduction required. Achieving the lower Paris limit of 1.5degC necessitates even greater reduction rates.

The red line indicates the “business-as-usual” path the world is currently on, which would result in a temperature increase above 4degC by 2100, possibly earlier.

The voluntary Intended Nationally Determined Contributions (INDCs) made by individual countries as part of the Paris Agreement, if implemented, would see emissions levelling off by 2030, in line with the orange line, but not falling. This would result in global average temperature rising above 3degC.

The implications are dire. Dangerous climate change, which the Paris Agreement and its forerunners seek to avoid, is happening at the 1.0degC increase already experienced as extreme weather events, and their economic costs, escalate. The negative impact on human health and mortality is substantial .

Our current global emission trajectory would lead to a temperature increase above 4degC, a world which would be “incompatible with an organised global community”, with global population dropping from 7 billion to below 1 billion as the impact of climate extremes takes effect . The World Bank has pointed out that “There is no certainty adaptation to a 4degC world is possible” .

Even the +3degC outcome which would eventuate if the Paris INDC commitments were implemented, would result in outright social chaos in many parts of the world. The US Military Advisory Board warns against a “failure of imagination” in ignoring these implications.

Unfortunately the IPCC tend to underestimate the risks to which we are now exposed. This is highlighted in: “What Lies Beneath: The understatement of existential climate risk” (copy attached), a report co-authored by David Spratt and myself.

This publication collates what scientists, decision-makers and other stakeholders have been saying, often behind closed doors, about the culture of failure and scientific reticence in which climate policy-making has become embedded. It is a story that must be understood if we are to have any hope of addressing the existential climate risk which humanity now faces. The report analyses why:

• Human-induced climate change is now an existential risk to human civilisation unless dramatic action is taken. The bulk of climate research tends to underplay these risks, exhibiting a preference for conservative projections and scholarly reticence.

• Reports of the IPCC, including the 1.5degC report referenced above, around which international negotiations have been based, also tend toward reticence and caution, erring on the side of “least drama”, and downplaying the more extreme and more damaging outcomes. This is dangerously misleading with the acceleration of climate impacts globally.

• Potential climatic “tipping points” are a particular concern; the passing of critical thresholds which result in step changes in the climate system. Under-reporting on these issues is contributing to a “failure of imagination” in our response to climate change.

In the foreword, Professor Hans Joachim Schellnhuber, founder of the Potsdam Institute for Climate Impact Research, adviser to German Chancellor Angela Merkel and to Pope Francis, calls the report a “critical overview by well-informed intellectuals who sit outside the climate-science community”, highlighting crucial insights which may lurk at the fringes of conventional policy analysis but which have a new resonance when “the issue is the very survival of our civilisation, where conventional means of analysis may become useless”. He says: “climate change is now reaching the end-game, where very soon humanity must choose between taking unprecedented action, or accepting that it has been left too late and bear the consequences”.

The purpose of the report is to highlight that the crucial moment is now, to understand why that is so, and to encourage a fundamental emergency reframing of our approach to climate action.

To summarise the rationale for emergency action:

• Dangerous climate change is occurring at the 1degC temperature increase already experienced. 2degC now represents the boundary of extremely dangerous climate change.

• To stay below the upper 2degC temperature increase limit of the Paris Climate Agreement, global emissions would have to peak no later than 2020 and be reduced by around 7% annually thereafter. To meet the lower 1.5degC target requires even more rapid reduction. By contrast, emissions continue to rise in line with worst case scenarios.

• Probabilities used to define the carbon budget to stay below the Paris objectives are unrealistic. The IPCC uses 50 to 66% chance as the norm. Not good odds for the future of humanity. Carbon budgets, and emissions reductions, should be based upon a realistic chance, at least 90%, of reaching the goals. On that basis, there is practically no carbon budget left today to stay below 2degC, let alone 1.5degC.

• Climate inertia means that allowing any form of continued fossil fuel investment today, with its associated emission increases, risks locking-in irreversible, existential climatic outcomes. By the time the climatic impact of these investments becomes clear, it will be too late to take action and avoid extensive stranded assets. Hence the risk is immediate in that those decisions must be stopped now.

• Atmospheric aerosols produced by burning coal and oil are cooling the planet by around 0.3 to 0.5degC. As these concentrations reduce with the phase-out of fossil fuels, a commensurate one-off increase in temperature is likely, further compounding the problem of staying below warming limits.

• IPCC scenarios still rely heavily on carbon removal from the atmosphere as a prerequisite for meeting the Paris targets. The degree of dependence on such negative emissions technologies, none of which exist at scale today, is extremely dangerous, creating a false sense of security that there are easy solutions when none exist.

• The recent IPCC summary report understates key risks in moving from 1.5degC to 2degC warming. For example, a likely rise in climate-driven refugees, the danger of exceeding tipping points that could push the world on to an irreversible path to a “Hothouse Earth” , cyrosphere risks such as Antarctic ice sheet instability and loss of the Greenland ice sheet being triggered, leading over time to multi-metre sea level increase. Exceeding 1.5degC poses huge risks both for humans and natural systems.

The most recent indications confirm the underestimation of these climatic and related risks. For example:

• Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), May 2019. “The overwhelming evidence of the IPBES Global Assessment, from a wide range of different fields of knowledge, presents an ominous picture,” said IPBES Chair, Sir Robert Watson. “The health of ecosystems on which we and all other species depend is deteriorating more rapidly than ever. We are eroding the very foundations of our economies, livelihoods, food security, health and quality of life worldwide.”

• Great Barrier Reef Outlook Report August 2019 downgrades the overall outlook for the reef to “very poor” in the absence of rapid action to address its most significant threat, which is climate change.

• New IPCC climate models point to underestimation of climate sensitivity.

• IPCC Special Report on the Ocean and Cyrosphere may confirm accelerating ice melt and sea level rise.

In summary, climate change now represents an immediate existential risk to human civilization. It is impossible to now limit temperature increases to the lower 1.5degC limit of the Paris climate agreement, and probably to the 2degC upper limit unless state and non-state actors across the globe accelerate action on climate change to an emergency footing, akin to wartime.
Climate Change Impact
As indicated above, scientists have long been concerned about the extreme “tipping point” risks of the climate system; non-linear positive feedbacks which trigger rapid, irreversible and catastrophic change. There is mounting evidence that these tipping points are being crossed.

For example, Arctic weather conditions are becoming increasingly unstable as jetstream fluctuations warm the region 20-30degC or more above normal levels; sea ice is at an all-time low with increasing evidence of methane emissions from melting permafrost . Greenland and Antarctic ice sheets are melting at worst-case rates , with the potential for several metre sea level rise this century . The Antarctic Larsen ice sheet and Pine Island glacier are showing signs of major breakup as a result of warming Southern Ocean waters, a process which is probably now irreversible . Coral reefs around the world, particularly the Australian Great Barrier Reef, are dying off as a result of record high sea temperatures . Global temperature increases are accelerating, with 2015-2018 being the hottest years on record . Major terrestrial carbon sinks, such as the Amazon, are showing signs of becoming carbon emitters . And much more.

The social disruption and economic consequences are already devastating, leading to extensive forced migration and economic collapse in some countries. The refugee crisis engulfing Europe, emanating from Syria and North Africa, is fundamentally climate change driven and a precursor of greater conflict ahead. The viability of the Middle East in toto is questionable in the circumstances now developing . Major centres of economic activity, such as the Pearl River Delta, responsible for 40% of China’s exports, the Mekong River Delta and other parts of SE Asia are now under threat from climate-induced sea level rise prior to 2050 .
The recent unprecedented hurricane seasons in the Atlantic, devastating bushfires in California, extreme heat in many parts of South Asia and extreme cold in parts of Europe and North America are only the most recent portents of what is to come as human-induced climate change intensifies natural extreme weather events .

The global climate-related damage bill for 2017 exceeded $340 billion, with insured losses at an all-time high of US$138 billion. Clearly, climate change has moved out of the twilight period of much talk and limited impact. It is now turning nasty, with the risk in some regions, often the poorest, translating into major disasters.

Australia, along with the adjacent Asia-Pacific region, particularly WA and Northern Australia, is considered to be “Disaster Alley”, where the most extreme impacts of climate change are already being experienced, as documented in our recent report . Events such as Cyclone Debbie, the collapse of much of the Great Barrier Reef, the 2019 Townsville floods, declining rainfall in Southern Australia, extensive drought and declining river flows, as in the Murray-Darling Basin, are clearly climate change-related.

On current trends, a 1.5degC temperature increase will be reached by 2030, and quite possibly 3degC by 2050. The latter scenario is explored in our latest report: “The Third Degree: Evidence and implications for Australia of existential climate-related security risk”. The hard-nosed practical impacts globally by 2050 might encompass:

• Ecosystem collapse
• Coral reefs
• Amazon rainforest
• Arctic
• Deadly heat > 100 days p.a.& extreme flooding in many regions
• Rising sea levels > 0.5 m
• Many nations & regions become uninhabitable
• 1 billion people displaced
• Significant drop in crop yields and food production
• Lower reaches of Mekong, Ganges & Nile rivers inundated
• Significant sectors of major cities abandoned – Chennai, Mumbai, Jakarta, Guangzhou, Tianjin, Hong Kong, Shanghai, Manila, Bangkok, Lagos.
• “Hothouse Earth” triggered

Existential Risk Management
Climate risk is unlike anything previously encountered by humanity, and cannot be handled by conventional, reactive, learn-from-failure, risk management techniques. This is the context in which the EPA should be considering the assessment of greenhouse gases from proposed projects

Sensible risk management addresses risk in time to prevent it happening – with climate change, that is long overdue. When the risk is existential, there is even greater justification for action, and the use of the precautionary principle, rather than waiting for perfect information.

This requires existential climate risk to become the primary consideration in designing policy across the board, but particularly the climate change and energy interface. That policy should be built around existential risk management along the following lines:

Normative Goal Setting. Incremental change from “business-as-usual” is not tenable. This must be replaced with a normative view of temperature and other limits which must be adhered to if catastrophic consequences are to be avoided, based on the latest science. Action is then determined by the imperative to stay within the limits, not by incremental, “politically-feasible” options.

Change Mindsets, to now regard the climate change challenge as a genuine global emergency, to be addressed with an emergency global response.

Genuine Global Leadership. Current responses reflect the dominance of managerialism – an emphasis on optimising the conventional political and corporate paradigms by incremental change, rather than adopting the fundamentally different normative leadership needed to contend with the potential for catastrophic failure.

Integrated Policy. Climate change, though difficult, is only one of a number of critical, inter-related, issues now confronting the global community, which threaten the sustainability of human civilisation as we know it. Rather than viewing these issues separately in individual “silos” as at present, integrated policy is essential if realistic solutions are to be implemented. Climate and energy policy needs to fit within a systemic Australian approach to emergency action.

Honesty. There needs to be an honest articulation of the catastrophic risks and the integrated sustainability challenge we now face, with extensive community education to develop the platform for commitment to the major changes ahead.

Political and Corporate Attitudes
For the last three decades in Australia climate change policy has been a political football with neither side of politics prepared to accept the science and evidence of escalating climatic impact from humanity’s continued reliance on fossil fuel, and to seriously address the issue. This largely stems from the fact that many Federal politicians, egged on by corporate fossil fuel interests, still do not accept that human-induced climate change is even a problem let alone an existential threat, as confirmed yet again in recent commentary . For a country whose entire prosperity has been based on innovative science and its sensible application, this is an astonishing, extremely dangerous, state of affairs.

The climate and energy policies adopted by successive Australian governments over those years, State and Federal, have deliberately refused to acknowledge this existential threat to our future security. The Australian emission reduction commitments made under the Paris Agreement are wholly inadequate on any fair global assessment. Our leaders have access to the best possible scientific advice and to the overwhelming evidence, locally and globally, that we have badly underestimated both the speed and extent of climate change impact. In such circumstances, to ignore this threat is a fundamental breach of the fiduciary and security responsibilities with which political, bureaucratic, scientific and corporate leaders are entrusted by the community they are supposed to serve.

Corporate and political attitudes can best be described as a process of predatory delay, that is the blocking or slowing of essential change, in order to make money off an unsustainable and unjust high-carbon fossil fuel economy for as long as possible, irrespective of the damage being caused to the community.

Perhaps the best recent demonstration was the political and industry reaction to the original EPA Greenhouse Gas Emission guidance issued on 7th March 2019. This suggested measures that might be taken to mitigate such emissions, including offsetting for emissions from a project’s direct activity (Scope 1 & 2), but possibly going further to consider emissions from end-use of the gas (Scope 3), either domestically or overseas.

The hysterical reaction of the industry and government was wonderous to behold. Massive investment and jobs losses were forecast, majors such as Woodside, Santos, Shell and Chevron professed outrage. WA Premier McGowan insisted that gas should not be disadvantaged as it provides a solution to climate change. Predictably the WA government forced the EPA to withdraw the guidelines for this current further consultation.

Sheer hypocrisy. The EPA was doing what these players supposedly want – providing certainty in setting out a sensible regulatory framework against which projects would be assessed for the real climate impact they create. Ironically, Shell, Woodside and others supposedly screen their projects against an internal carbon price to allow for the additional costs which are inevitably coming as the damaging externalities of fossil fuel use are finally brought to account, costs such as those implied by the EPA Guidelines. But actually paying for the damage created is, it seems, a bridge too far from internal screening .

Henceforth, no new fossil fuel projects should be built globally if we are to avoid potentially catastrophic, irreversible climatic outcomes; existing operations have to be replaced with low carbon alternatives, and carbon sequestration technologies which do not currently exist have to be rapidly deployed at scale .

Notwithstanding these risks, governments, business and investors complacently encourage the continuation of such investment, for example the expansion of WA LNG, the Adani coal project in Queensland’s Galilee Basin, similar coal investments in NSW, CSG expansion and now the possibility of hydraulic fracturing for shale gas in the NT and WA, all on the basis that the 2degC limit is some way off, with a substantial carbon budget still remaining. Neither proposition is correct.

LNG expansion is promoted by State and Federal governments as a solution to climate change, particularly replacing coal in the transition to a low-carbon world, on the basis that its emissions are substantially lower than both oil and coal per unit of energy, an assumption which is only true if methane leakage is minimized and which is yet to be confirmed generally in Australia. However LNG is a fossil fuel like any other. When there is no carbon budget left to stay below 2degC, let alone 1.5degC, particularly given the global of evidence escalating climate impact, all fossil fuel expansion must be stopped.

Political and corporate debate focuses around short term economics and ideology, completely ignoring the wider implications of the climate impact already happening around us. There is a total inability, or refusal, “to join the dots” and recognise the security implications of current dysfunctional and contradictory climate and energy policies. If Australia insists on massively increasing our carbon emissions as currently proposed, thereby contributing to escalating warming globally, the climate impact on Australia itself will only intensify, particularly in WA, inter alia more than negating any development benefit. Similarily in Asia and the Pacific, where Australia’s actions as a “climate pariah” have markedly diminished its reputation in recent years . In effect we have one foot lightly on the climate change brake whilst the other foot is hard on the accelerator.

We are continually told that Australia is such a small contributor to global emission domestically (about 1.3%), that anything we do is meaningless in attempting to solve the global challenge. Thus we can continue to expand our high-carbon economy with impunity. Such arguments completely ignore the massive carbon emissions we export with our fossil fuel commodities sold overseas which, under UNFCCC convention, are accounted for in the consuming country. If they are included, which they should be given the critical stage climate change has now reached, Australia is in the fourth largest carbon polluter globally and will shortly become the third largest if LNG expansion is ramped up as currently planned . Our denialist policies are acting as a major accelerant of climate impact worldwide, in turn increasing the damage to the Australian economy and society. Of course other countries, particularly China, the US and India, have to do more to curb their emissions, but what Australia does matters greatly.

In a broader geopolitical sense, it is totally untenable in a rapidly warming world, for Australia as one of the worst carbon polluters globally, to increase our carbon emissions at all, but particularly when we also have some of the world’s best renewable energy resources, much in WA, which we are not using to anywhere near their full potential. If allowed to continue, this will inevitably lead to conflict and further national security threats. The transition to a low-carbon economy is unprecedented. It represents the greatest investment opportunity the world has ever seen. Australia in particular has the technology, the expertise, wealth and resources to make it happen. This is where our future lies, but thus far we lack is the maturity to set aside political ideology and corporate vested interests to cooperate for the public good.

Community Response
Record numbers of Australians are recognizing the need for urgent climate action. This parallels mounting concern internationally which has led to increasing civil disobedience, as witnessed by the Extinction Rebellion movement, global schoolchildren strikes and the declaration of climate emergencies by governments, councils and other organisations globally over the last year, currently encompassing some 1000 jurisdictions covering 212 million people .

The climate concerns outlined, and their escalating impact are now blindingly obvious to the community at large. Likewise the refusal of political and corporate leaders to seriously face up to the implications of continuing fossil fuel use. When leaders refuse to lead in addressing the greatest threat confronting us, people are not going to sit as rabbits in the headlights waiting to be run over by the climate leviathan; they will act to force the incumbency to change direction. So escalating civil action is inevitable unless leaders respond; which they should do, if for no other reason than it is now in their own immediate self-interest.

Legal Implications
A further dimension of the climate debate is the increasing resort to legal action where the incumbency, political or corporate, refuses to face up to the implications of climate change.

Regulators globally have recognized that climate change now represents a systemic threat to the stability of the global financial system, far greater than the 2008 Global Financial Crisis. Accordingly, corporations are being urged to voluntarily assess and disclose the climate risk they face, via the FSB Task Force on Climate-Related Financial Disclosure recommendations . This is a major step forward in forcing corporate action on climate, but it remains reactive. We have yet to see corporations taking a proactive stance in committing to contribute to achieving a below 2degC world at the speed now required.

Likewise Australian regulators, APRA, ASIC and the Reserve Bank of Australia, are reminding corporate directors that they have a duty under corporations law to understand, assess and act upon climate risk.

Litigation against fossil fuel companies for damage incurred from climate impact is mounting as climate science increasingly provides the ability to identify causation and attribution of climatic events.

In a wider context, it is clear that the denialist attitudes of business and political leaders in Australia are infringing international law, as set out for example in the Oslo Principles on Climate Obligations , and the related Principles on Climate Obligations of Enterprises . These will increasingly be brought to bear on both government and corporate entities.

However it is arguable that climate change denial has moved beyond this point, in that it is now a crime against humanity, particularly in the blatant and deliberate manner being adopted by our Federal government. For example, in firstly rejecting the very real concerns of communities already being affected by climate-related sea level rise in the Pacific, and secondly in deliberately seeking to profit from massively expanding fossil fuel use, as outlined above, when viable and attractive low-carbon alternatives are available.

Australia ratified the Rome Statute of the International Criminal Court in 2002. Article 7 states: “Crime against humanity means the following when committed as part of a widespread or systemic attack directed against any civilian population, with knowledge of the attack: item 1k: Other inhumane acts of a similar character intentionally causing great suffering, or serious injury to body or to mental or physical health.

That, in essence, is what continual climate denial, obfuscation and inaction in the interests of short-term gain, is doing, particularly given the scientific knowledge on the implications of climate change readily available to our leaders.
Conclusions and recommendations on Greenhouse Gas Assessment Guidance
Climate change now represents an immediate existential threat to every city, country, company and community in WA and elsewhere, which can only be realistically addressed by emergency action.

The threat is increasingly obvious as extreme climatic events escalate, and the climate emergency call is being taken up widely. In essence emergency action means, akin to wartime, the suspension of business-as-usual, politically, corporately and socially, to do whatever it takes to resolve the climate crisis. There is no higher priority.

This does mean massive societal and cultural change, and fundamental reframing of virtually every policy arena; climate, energy, foreign affairs, defence, health, immigration, agriculture to name but a few. The upside is that Australia has far greater potential to prosper in the low-carbon future than in the high-carbon past, particularly in WA. But realizing that potential requires an all-encompassing commitment to a low-carbon emergency transition. Certainly there will be costs, but the costs of ignoring climate change and continuing our current denialist stance will be far greater.

The objective of the EPA is:
• to protect the environment
• to prevent, control and abate pollution and environmental harm

The EPA role is restricted to WA, and to environmental considerations. However, if policies at the national level in regard to Greenhouse Gas Assessment are inadequate or non-existent, as is the case, and such shortcomings potentially impact on the WA environment, as is the case with carbon emissions, then it is entirely appropriate that the EPA enact provisions in WA seeking to mitigate those emissions and consequently minimize the risk of contributing to climate change. This includes consideration of not just Scope 1 and Scope 2 emissions, but also Scope 3 even if this applies to exported LNG, given that climate change is a global problem, and that any increase in emissions overseas from the consumption of WA fossil fuel now impacts back on WA, as well as globally.

In that context, the EPA Guideline on Greenhouse Gas Emissions originally issued on 7th March 2019 and subsequently withdrawn, are appropriate. However, they are too conservative compared with measures which are now required to avoid potentially catastrophic damage to the WA environment. In current circumstances, more specific conditions must apply, built around the precautionary principle and the principle of intergenerational equity. In particular:

• no approval should be given to any new fossil fuel project, whether coal, oil, gas, using conventional (LNG) or unconventional (fracking) technologies, for domestic or export consumption, unless it has proven, safe and secure mechanisms in place from the outset for the long term sequestration of all carbon emissions produced by that project, encompassing Scope 1, 2 and 3 emissions.

Accordingly I recommend that the original EPA Greenhouse Gas Emissions guideline be re-instated with this additional caveat.

Ian T Dunlop

“They go on in strange paradox, decided only to be undecided, resolved to be irresolute, adamant for drift, solid for fluidity, all-powerful to be impotent……Owing to past neglect, in the face of the plainest warnings, we have now entered upon a period of great danger….. The era of procrastination, of half-measures, of soothing and baffling expedients, of delays, is coming to a close. In it’s place we are entering a period of consequences….. We cannot avoid this period, we are in it now…..”

“Sometimes we have to do what is required”
Winston S. Churchill 

A Parliament Without Trust or Legitimacy Must Go

The insults hurled by David Leyonhjelm at Sarah Hanson-Young recently put parliamentary discourse in the gutter. Leyonhjelm was roundly condemned, but not by our leaders. A limp rap across the knuckles from Turnbull and Shorten, then on to more pressing matters, hoping it will all go away.

But not so fast; in governance parlance “the fish rots from the head”. Our leaders need to acknowledge the amoral, unethical parliamentary morass they have created, and its implications.

Australian society today is not a pretty sight. Despite the hype around Australian “values”, years of neoliberal policy have seen money corrupt everything. The Banking Royal Commission, long resisted by the incumbency, is exposing not just a few bad apples but an industry rotten to the core from excessive remuneration, greed which is certainly not restricted to the finance sector. In sport, winning is everything, whatever the cost, but it long ceased to be sport in any true sense. Violence against women and minorities escalates, egged on by the Leyonhjelms of this world. Population pressure sees tolerance disappear. Inequality increases in leaps and bounds, exacerbated by mythical “trickle-down” economics. Drug and alcohol abuse is widespread. Terrorism threats and migration justify massive over-reaction in restricting individual liberties. Crass commercial media and shock jocks incite vindictive extremism. Continuing scandals suggest that few people in positions of public trust have any idea of the moral and ethical responsibilities which go with those roles.

Above it all sits a national parliament incapable of sane discussion on anything. Screamed abuse replaces reasoned debate, any sense of civility long gone. Little wonder societal standards decline when “leaders” set such an appalling example. But there are far more fundamental implications.

Concepts of left and right in politics long since became irrelevant to solving the critical issues facing Australia. The imperative is that those issues do actually get addressed, which is patently not happening.

The first priority of government, we are told, is to ensure the security of the people. In theory, we elect politicians to govern on our behalf to provide that security; politicians who, pre-election, profess undying commitment to public service.

What we get, with a few notable exceptions, are politicians who, once elected, focus largely on party machinations, getting re-elected or otherwise feathering their nest. Much sound and fury around minor issues, whilst the critical ones are ignored. It was not always thus; historically in politics and business there were statesmen and women prepared to set aside their personal interests in favour of the common good, but they are long gone since money came to dominate. Good people are elected to parliament, but their good qualities are rapidly subsumed by party politics.

Behind it all, the creeping cancer of the neoliberal agenda dominates the current government. Driven by right wing apparatchiks in the Institute of Public Affairs, the Minerals Council of Australia, the Business Council of Australia, the Murdoch press and elsewhere, every opportunity is taken to push deregulation, reduce the size of government, emasculate and politicise the public service making it subservient to ideologically-blinkered political advisers, with no regard for the “common good”. Power is concentrated in a few wealthy hands in the interests of “conservatism”, shorthand for maintaining the status quo for the benefit of existing elites. So dissent must be suppressed, activist groups muzzled, the ABC silenced, academic freedom undermined, public debate dumbed down and the public treated as fools. Few are even aware it is happening, except when the occasional stuff-up occurs as with Tony Abbott spilling the beans on the real intentions of the Ramsay project for the promotion of Western Civilisation.

This is where facism begins; the cancer must be stopped if we want a prosperous, sustainable and fair society.

In this, Australia is following the US, where the process is far more advanced. The insidious efforts of right wing billionaires such as the Koch brothers, to seize the levers of power has been going on for decades, the inevitable outcome flagged by Lord Acton long ago: “Remember, where you have a concentration of power in a few hands, all too frequently men with the mentality of gangsters get control. History has proven that. All power corrupts; absolute power corrupts absolutely”.

The deterioration of US society, with increasing inequality, violence, crumbling infrastructure and much more has, to a significant extent been brought about by this venality. US and Australian neoliberals are inextricably linked in moving this agenda forward.

Except that the status quo can no longer be maintained, as neoliberalism has long since sown the seeds of its own destruction. The inevitable result of decades of exponential growth in both population and consumption is that we are now hitting the limits of the global biosphere, which cannot be circumvented. This is manifest in multiple ways, inter alia: increasing water stress, massive biodiversity loss, decreasing productivity of agricultural land, escalating social conflict over declining resources and associated migration. To the point that the economic growth model under which our economies operate is no longer sustainable, despite desperate efforts to keep it afloat with massive financial interventions such as “quantitative easing”.

Overshadowing it all is human-induced climate change.

Its risks are intensifying and the physical impact worsening, with global climate-related losses running at record levels. Despite 30 years of political and corporate rhetoric, nothing has been done to seriously address it, notwithstanding increasingly urgent warnings.

The result is that climate change is now an immediate existential risk to humanity. That is, a risk posing large negative consequences which will be irreversible, resulting inter alia in major reductions in global and national population, species extinction, disruption of economies and social chaos, unless carbon emissions are rapidly reduced. The risk is immediate in that it is being locked in today by our insistence on expanding the use of fossil fuels when the carbon budget to stay below sensible temperature limits is already exhausted.

To prevent temperatures rising above the upper 2degC limit of the 2015 Paris Climate Agreement, it is no longer possible to follow a gradual transition path. We have left it too late; emergency action, akin to wartime regulation, is inevitable. Market-based measures alone are insufficient.

Those still sceptical of this reality only have to look at the Northern Hemisphere now, particularly the Arctic, Asia and the US, as extreme temperatures trigger positive feedback loops, creating global climate conditions which make normal life impossible.

Neoliberals in the US and Australian fossil fuel industries long ago saw climate change as the greatest threat to the stranglehold on power from which they have benefited for so long. Accordingly billions of dollars have been devoted to discrediting climate science, raising doubts about its authenticity through every possible means, with much US money flowing in to support Australian campaigns. A process which has been remarkably successful, albeit nothing less than a crime against humanity.

But even the Koch brothers, the IPA and the MCA cannot change the laws of physics. The climate science has been rock-solid for decades and the cost of neoliberal disinformation is now coming home to roost. Unfortunately that cost is being borne by the poor who can least afford it, and groups like Australian farmers, rather than the elites who created it.

As Churchill put it: “Want of foresight, unwillingness to act when action would be simple and effective, lack of clear thinking, confusion of counsel until the emergency comes, until self-preservation strikes its jarring gong—these are the features which constitute the endless repetition of history

Which places Australia in an extremely dangerous position. We are one of the countries most exposed to the impacts of climate change, particularly our agricultural sector. Yet our dysfunctional parliament has left the country totally unprepared for what is to come.

The crux of the problem is that our government is in total climate change denial. Climate and energy policy is a shambles, the result of endless contortions trying to reconcile the irreconcilable. Namely expanding our fossil-fuel based economy, particularly coal, whilst pretending to meet our wholly inadequate voluntary commitments under the Paris Agreement. An Agreement which the government is doing its damndest to undermine, despite having ratified it in 2016.

Policy is dictated by scientifically and economically illiterate right wing hard-coalers, such as Messrs Canavan, Abbott, McCormack, Kelly, Christensen and Abetz who cannot understand that reliable, dispatchable and lower-cost power is now available from renewable energy sources far more effectively and cheaply than from coal. Even when coal continues to be massively subsidised, far more than renewables, by the lack of a sensible carbon price to account for its externalities, namely the enormous damage done by the health and climate impacts of coal use, which have been ignored since the Industrial Revolution. None of which matters if you are in climate denial.

They stamp their feet like petulant schoolboys whose favourite coal toy is being taken away. They lie and dissemble, misrepresenting and cherry-picking sound technical reports, twisting them to achieve their preferred pro-coal outcomes, irrespective of the severe implications for the wider Australian community, egged on by the serried ranks of the neoliberal cheer squad.

Just because we have large coal resources does not give us the right to use them if the result is an existential threat to humanity. Commodities come and go; coal is no different. Coal has created great wealth, but it’s time has passed as its climate impact, along with that of other fossil fuels, is now destroying the societies it helped create. The development of Galilee Basin coal, along with CSG in NSW and Queensland, and shale gas in the NT and WA, would be suicidal in current circumstances.

As Sheikh Yamani put it in the oil context: “The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil”.

Australia was built upon the innovative application of science. That is also its future, which the government is destroying with third-rate, anti-science policy such as the National Energy Guarantee. The certainty for energy investment which business and politicians crave will be non-existent until action on climate change is accepted as the absolute priority in determining energy policy.  The solutions are available and blindingly obvious, including a realistic price on carbon and bans on any further fossil fuel expansion.

We have many opportunities to invest in low-carbon alternatives for both domestic and export use which provide far greater potential than traditional commodities such as coal. Particularly in providing distributed energy across the rural community. This is where our aspirations must lie, not in massive investment in propping up coal-fired power stations or investing in new ones. The cost to Australia as these investments inevitably become stranded assets, will be enormous, along with physical damage to the country from their climate impact. Rather than holding back renewable energy development, which is clearly the objective of current policy, we should be accelerating it to the maximum extent possible along with dramatic improvements to energy efficiency and conservation.

Neoliberal climate denialists insist that Australia’s domestic carbon emissions, 1.3% of the global total, are such as small amount that nothing we do will have any effect in addresssing climate change globally. That is nonsense; if exports are included, which they must be given the rapidly accelerating climate impact, Australia is already the sixth largest carbon polluter globally and will soon be fourth given the ramping up of our LNG exports. In short, we are a very big emissions player. What Australia does mattters.

The pretence that the government is serious about addressing climate change becomes ever more ludicrous. The most recent example is the $500 million allocated in a futile attempt to repair climate damage to the Great Barrier Reef, via the Great Barrier Reef Foundation, whilst simultaneously advocating the opening up of massive new coal mines in the Galilee Basin which would compound that damage, totally decimating the reef, along with tourism and other industries far more valuable than coal.

Likewise the announcement from Minister for Agriculture , David Littleproud, about an agreement with state ministers to help farmers adapt to climate change. Why was this needed? Because the climate is changing. What are we doing to stop it? Nothing, just attempting to adapt whilst making the problem far worse by building new coal-fired power stations and mines. Just how long can this cognitive dissonance continue?

The Prime Minister proclaimed in 2010 that: “Our efforts to deal with climate change have been betrayed by a lack of leadership, a political cowardice, the like of which I have never seen — “. He promised never to lead a political party that did not take climate change seriously. He now revels in doing exactly that, placing the future of generations of Australians in jeopardy. An abject failure of principled leadership.

The Opposition are little better, continually sitting on the fence denying the urgency for climate action, and ambivalent toward new coal development such as Adani. Equally lacking in leadership and principle.

Many parliamentarians are climate deniers, but that does not absolve them of the fiduciary responsibility to set aside their personal prejudices and to act in the public interest with integrity, fairness and accountability. This requires them to understand the latest climate science; it is not acceptable for those in positions of public trust to dismiss scientific warnings in the cavalier manner which has typified the last few years. Particularly when the risk is existential.

Ministers in particular do not seem to understand that they have that fiduciary responsibility, along with the related public duty and a public trust.

As Sir Gerard Brennan puts it: “A fiduciary is a person to whom power is entrusted for the benefit of another. ——- Power is reposed in members of Parliament by the public for exercise in the interests of the public and not primarily for the interests of members or the parties to which they belong. The cry ‘whatever it takes’ is not consistent with the performance of fiduciary duty ———- All decisions and exercises of power should be taken in the interests of the public, and that duty cannot be subordinated to, or qualified by, the interests of the (parliamentarian or Minister)

Effective action on climate change must be raised above political infighting if the government’s first responsibility to ensure the security of the Australian people is to have meaning. But nowhere in the political spectrum is there evidence of leadership that might step up to the challenge.

In the corporate sector, the widespread abuse of power, declining ethical standards and falling community trust in business is calling into question corporations’ “social licence to operate”, and their right to enjoy the privilege of limited liability, which has been the cornerstone of business since the early 1800s, on the grounds that it should be a privilege to be earned, not an inalienable right.

Trust “is a belief that a person or institution will perform their role or function in accordance with its obligations, or where not bound by duty, in a predictable manner”.

Beyond trust is legitimacy “a recognised and well-founded right to claim a certain status, role or function.

Our parliament must be held to higher standards than the corporate world. But community trust in parliamentarians is non-existent. Further, a parliament that is incapable of firstly, understanding, secondly, addressing and thirdly, is deliberately worsening, the critical issues which Australia faces, particularly climate change, has forfeited any legitimacy. It has no right to continue in its present form.

When the risks are existential, it is not acceptable to allow parliamentary renewal to await the next election and the likely continuation of dysfunctional government. The parliament is on Winter Break; it should not reconvene. The Governor General should disband it and consider alternative national governance arrangements.

Different forms of democratic structure are being canvassed widely, recognising the profound weaknesses of the current system. This expertise should be used to create something akin to a wartime Government of National Unity, with leaders of foresight and integrity.

Because the brutal reality is that climate risk now has to be handled as an emergency. Either we act, or we face a bleak future. Parliament must work for the people, not destroy them.

Sometimes we have to do what is required” 

Published in Pearls & Irritations, 9th August 2019

Climate Risk – MCA Directors Breach Duties of Care and Due Diligence

After 30 years of inaction, the focus on climate risk is accelerating as the physical impact of climate change worsens and the transition risks to a low-carbon world intensify. Despite effusive official rhetoric, nothing has been done to seriously address climate change, notwithstanding increasingly urgent warnings . Global climate-related losses are running at record levels .

To prevent temperatures rising above the upper 2degC limit of the 2015 Paris Climate Agreement, it is no longer possible to follow a gradual, incrementalist glide path. We have left it too late; emergency action, akin to wartime regulation, is inevitable, which further increases the transition risk. Market-based measures alone are insufficient.

Despite years of denial in the top echelons of corporate Australia, legal opinion has confirmed that: “company directors who fail to properly consider and disclose foreseeable climate-related risks to their business could be held personally liable for breaching their statutory duty of care and diligence under the Corporations Act.” . Regulators are finally waking up that climate risk has the potential to create a crisis far greater than the 2008 Global Financial Crisis, emphasising that: “climate risks are foreseeable, material and actionable now” .They have yet to honestly face up to the existential implications.

Curious then that the Minerals Council of Australia (MCA) should recently publish an astonishingly misleading report on Market Demand for Australian Export Thermal Coal, 2017-2030. In 52 pages, from consultant Commodity Insights, there is not a single mention of the greatest threat to thermal coal exports, namely climate change risk . Government estimates of thermal coal expansion are used to produce a single-line estimate of a massive 60% increase in thermal coal import demand by 2030 for countries across the Asian region. A strongly supportive media release from MCA Coal Director Greg Evans, confirms that “Australian coal is ideally placed to meet this growing demand”, albeit the report is silent on Australia’s possible share of this growth.

The report optimistically includes new powerstation builds but fails to properly net out older powerstations closures. It contradicts authoritative studies such as the International Energy Agency (IEA) 2017 World Energy Outlook, which suggests that to meet Paris climate change commitments, global thermal coal trade, far from expanding, will reduce by 28% by 2025 and 59% by 2040 . Even the IEA central New Policies scenario shows no growth.

The MCA is a company limited by guarantee, incorporated and domiciled in Australia, hence subject to the Corporations Act. To promulgate such material without qualification is misleading and deceptive. MCA’s directors must consider how climate change impacts MCA’s business, and the business of its members. This reports demonstrates an ignorance of climate risk and failure by the directors’ to discharge their duty of care and diligence in overseeing the company’s operations. The report is a blatant attempt to influence the current toxic political debate on climate and energy policy in favour of coal expansion.

The MCA has form in this regard, for three decades having been a serial offender preventing the introduction of serious climate policy in Australia. To the point that the two major MCA members, BHP and Rio Tinto, under pressure from their own shareholders, finally reconsidered their MCA involvement given the stark contrast between MCA climate policy and their own. Following reframing of MCA policy, which includes the duty to consider climate risk, both BHP and Rio retained their involvement.

Yet this report deliberately breaches the updated policy. Thus, MCA’s directors are increasingly exposed to personal liability for failing to govern the company in a manner that adequately considers climate risk.

Some MCA directors have short memories. In November 2015, the New York State Attorney General, via the US Securities and Exchange Commission, secured undertakings from the world’s largest coal company, Peabody Energy, for violating state laws prohibiting false and misleading conduct in regard to Peabody’s public statements on risks posed by climate change . In part by misrepresenting the findings and projections of the IEA. Peabody Energy Australia, a subsidiary of Peabody Energy, is a member of the MCA, with a director on the MCA Board.

The implications of South Asia following a Chinese pattern of coal expansion, which is what this report implies, are horrendous in terms of climate impact; the result would be: “a world incompatible with any organised global society” . Far more people would die from the use of coal than will ever be pulled out of poverty. The market for seaborne coal, far from growing, would disappear. The cost to Australia, in terms of stranded assets, would be massive.

In the national interest, regulators must now stop the stream of MCA disinformation once and for all.


This article was published in Pearls and Irritations and RenewEconomy in July 2018

Facing Reality: Reframing Climate Change as an Immediate Existential Risk

The Big Question:

“Who at the highest levels of leadership in corporates and public service will take the bold risks that are required, not gradually or incrementally, but decisively in line with the new scale and speed that ‘unthinkables’ emerge.”

ITD – Climate Change Emergency Response Rationale June 2018

Climate Change: The Fiduciary Responsibility of Politicians & Bureaucrats in the Era of Existential Climate Risks

“Fiduciary: a person to whom power is entrusted for the benefit of another”

“Power is reposed in members of Parliament by the public for exercise in the interests of the public and not primarily for the interests of members or the parties to which they belong. The cry ‘whatever it takes’ is not consistent with the performance of fiduciary duty”

Sir Gerard Brennan AC, KBE, QC

After three decades of global inaction, none more so than in Australia, human-induced climate change is now an existential risk to humanity. That is, a risk posing large negative consequences which will be irreversible, resulting inter alia in major reductions in global and national population, species extinction, disruption of economies and social chaos, unless carbon emissions are reduced on an emergency basis. The risk is immediate in that it is being locked in today by our insistence on expanding the use of fossil fuels when the carbon budget to stay below sensible temperature increase limits is already exhausted.

As one of the countries most exposed to climate impact, and in the top half dozen carbon polluters worldwide when exports are included, as they must be, this should be of major concern to Australia. Instead, politicians and bureaucrats urge massive fossil fuel expansion to supply domestic and Asian markets, the latter justified on the grounds of poverty alleviation and the drug peddlers argument that: “if we don’t supply it, others will”. Blind to the fact that fossil fuels are now creating far more poverty than they are alleviating. In so doing Australia would be complicit in destroying the conditions which make human life possible. There is no greater crime against humanity.

Regulators now recognise that climate risk far outweighs the financial risks which triggered the 2008 Global Financial Crisis, and demand action. Company directors have a fiduciary responsibility to understand, assess and act upon climate risk. Overseas, directors are already facing legal action, and personal liability, for having refused to do so, or for misrepresenting that risk. Compensation is being sought from carbon polluters for damage incurred from climate impact. Similar action will be taken here.

But what of our politicians and bureacrats and their contribution to this crime? The last few years have seen an unprecendented stream of lies and disinformation emanating from our official bodies around climate and energy policy, in blatant disregard of the facts, with seemingly no end to distortions designed to achieve short-term political advantage. What fiduciary responsibility do they have to the community they are supposed to serve?

Ministers repeatedly remind us that the first responsibility of government is the security of the people. On any balanced assessment of the science and evidence, climate change is now the greatest threat to that security and to our future prosperity.

Australia signed and ratified the 2015 Paris Climate Agreement, presumably with the intent of meeting its objectives to limit global average temperature increase to “well below 2degC above pre-industrial levels and to pursue efforts to limit the increase to 1.5degC”, and “to reach global peaking of greenhouse gas emissions as soon as possible —– in accordance with best available science”, recognising that “climate change represents an urgent and potentially irreversible threat to human societies and the planet”.

The voluntary Intended Nationally Determined Contributions (INDCs) made by Paris participants, if implemented, would not meet the objectives, leading to a global temperature increase in the 3-4degC range, a world incompatible with an organised global community. The Australian commitment, of a 26-28% emission reduction by 2030 on 2005 levels is derisory on any fair international comparison.

Regional temperature variations would be far greater than these global averages, rendering many parts of the world uninhabitable even at 2degC, beyond the capacity of human physiology to function effectively. This may well be the case across much of Australia.   Since Paris, our Federal Government has ignored the Agreement, brushing off the increasingly urgent warnings of “the best available science” and ramping up fossil fuel expansion, whilst placing every possible obstacle in the way of low-carbon energy alternatives.

The fact that many Ministers and parliamentarians are climate deniers for ideological or party political reasons, does not absolve them of the fiduciary responsibility to set aside their personal prejudices and to act in the public interest with integrity, fairness and accountability. This requires them to understand the latest climate science and to act accordingly. It is not acceptable for those in positions of public trust to dismiss these warnings in the cavalier manner which has typified the last few years. Particularly when the risk is existential.

The Prime Minister failed this test recently by implying the disastrous Tathra bushfires had nothing to do with climate change. Every extreme weather event today has some element of climate change involved; it is irresponsible to imply otherwise.

Ministers justify their approach by misrepresenting international studies to support their fossil fuel expansion ambitions. Notably by citing the work of the International Energy Agency (IEA). The IEA sets out its perspective on the energy sector over the next 25 years in its annual World Energy Outlook (WEO), exploring the implications of alternative climate and energy scenarios. Key scenarios are: current policies (CP) which assumes business-as-usual (4-5degC temperature increase), new policies (NP) which extends CP with policy committed to but not yet implemented (3.5-4degC temperature increase), and sustainable development (SDS) which is the pathway to meet various sustainable development goals. SDS claims to keep global average temperature increase below 2degC, but only with a 50% chance of success by relying on massive investment in sequestration technologies which have yet to be invented. In reality, SDS would result in temperature increase substantially above 2degC. There is no scenario which realistically achieves the Paris objectives.

The IEA is no paragon of virtue regarding climate change. It downplays both climate impact, and the potential of alternative energy sources, as a result of strong pressure politically from its developed country membership, and from vested interests who make up its advisory bodies such as the IEA Energy Business Council and the Coal Industry Advisory Board.

Consequently their scenarios are seized upon to justify further fossil fuel investment. For Australia, Asia Pacific coal demand is a key factor, this being our major export market. In the November 2017 WEO, under NP assumptions annual coal demand increases by 12% or 480 million tonnes by 2040, but under SDS assumptions it declines by 47% or 1880 million tonnes.

The IEA takes NP as their central scenario as this is where we are headed if governments implement their current commitments. However, in the fine print the IEA make it clear that NP is not a sustainable future. In the 2017 WEO, Executive Director Fatih Birol says: “Decision-makers also need to know where they would like to get to. — This is the point of the SDS scenario” – even though SDS does not meet the Paris objectives.

Having ratified Paris, presumably this is at least where Australia wants to get to. Not so our Ministers. At his National Press Club address on 28th March 2018, Resource Minister Canavan insisted on using the IEA NP Asia Pacific 480 million tonnes annual demand increase by 2040 to justify expansion of our coal industry, ignoring the SDS 1880 million tonnes decline. The latter is the minimum transition to approach a sustainable future; many existing operations become stranded assets before the end of their working life, and certainly no new coal investment. Ministers Frydenberg and Ciobo similarily insist on using NP estimates and ignore the SDS.

Canavan then assured the Press Club that in the first 40 years of this century, the world will use more coal than in the entire previous history of the coal industry. The IEA repeatedly emphasise that their scenarios are not forecasts. They are designed to give decision-makers an understanding of the implications of their actions, and they only cover part of the story. If the NP pathway is followed, there will be no market for export coal as Asia Pacific economies will shrink rapidly under the weight of climate impact. If more coal is used by 2040 than in previous history, humanity will become extinct. These are consequences the IEA does not discuss.

Such ministerial naivety is laughable, but it highlights a serious governance failure. As with company directors, it is incumbent upon ministers to understand these issues, in particular the risks to which the Australian community is exposed by their decisions. The only possible justification for Minister Canavan’s view is that he does not believe climate change is even a problem, let alone accept the need to rapidly reduce emissions. Further, he has no understanding of the implications of his proposed action. Whatever the Minister’s personal position, or the views of those who voted for him, given the overwhelming science and evidence confirming the urgency to address climate change, such ignorance is unacceptable and a fundamental breach of his fiduciary responsibility to the nation.

At the National Press Club, the Minister reacted angrily to a suggestion that the coal industry will phase out, objecting strongly to any thought of planning a transition. The mining industry will undoubtedly remain an essential part of the Australian economy, but markets for commodities come and go. Irrespective of political preferences, absent some unlikely technological breakthrough to sequester its emissions, coal will phase out, not instantaneously but relatively rapidly. Coal has been through many transitions in the past. The lesson from these disruptions is the need for thorough planning, retraining and support to avoid many people being badly hurt. Even more will be hurt, with massive climate impact, social and economic chaos, if the coal industry is expanded. It is irresponsible for the Minister to leave communities unprepared for these realities.

Minister Canavan then turned on “well funded” environmental groups “abusing” our “robust environmental laws” to prevent or slow down major projects, such as the Adani coal mine in Queensland’s Galilee Basin. Australia’s environmental laws were developed when human impact on the environment was far less than today. As that impact has grown, far from being robust, these laws are no longer “fit for purpose”. In particular, being domestically focused, they do not take account of the greatest environmental risk of all, which is climate change.

Under current UNFCCC rules, emissions from fossil fuel exports such as coal or gas are accounted for in the consuming country and are ignored by Australian courts and institutions in granting approvals for projects such as Adani.

However carbon emissions have global impact; coal exports from the Galilee Basin, would have major climate and environmental implications in Australia, as well as in consuming countries such as India. Our laws must be reframed accordingly if they are to be meaningful. As for “well funded”? Vested interests pour vastly more money into supporting fossil fuel expansion than has ever been available to environmental groups.

Parliamentarians, particularly ministers seem to have lost sight of the fact that they have a fiduciary responsibility to the public, which imposes upon them a public duty and a public trust. Sir Gerard Brennan again: “all decisions and exercises of power should be taken in the interests of the public, and that duty cannot be subordinated to, or qualified by, the interests of the (parliamentarian/minister)”.

It is entirely appropriate, when the legal system fails, for affected parties to take action to correct such failure, as with Adani, and with CSG projects in many parts of the country. In fact these are the only groups who are genuinely acting in the public interest. That the Federal government is now trying to muzzle them indirectly via the proposed Foreign Donations Bill is a further breach of its fiduciary responsibility.

The public has the right to expect that Minister Canavan take an holistic view of the Adani project and the many other fossil fuel developments he is promoting, including an honest appraisal of their climate implications for the community. That is not happening.

Similarily with Environment and Energy Minister Frydenberg, who should be proactive in changing environmental laws to include the climate impact of fossil fuel exports on Australia, rather than advocating that Adani proceed on the grounds it has met current inadequate environmental approvals.

Minister Frydenberg, and the government generally, breach their fiduciary duty by promoting poor climate and energy policy as represented by the National Energy Guarantee, whatever that ultimately means. This lowest common denominator solution is only being considered because of the fiduciary irresponsibility of a minority group of right wing parliamentarians, inappropriately identified as the Monash Forum, who put their own self-serving ideological agenda ahead of the public interest.

To claim, as the Minister did in his National Press Club speech on 11th April 2018, that: “the future of energy policy must be determined by the proper consideration of the public’s best interest not ideologically-driven predisposition”, just adds insult to injury given that the Coalition is, and has been for two decades, in total ideological denial on climate which largely explains our current policy shambles. The cost to Australia of this self-indulgence is enormous.

The Minister also misrepresents IEA analysis of Australia’s energy policies. The IEA conducts a periodic review of individual member countries policies. The latest IEA Australian review in February 2018 was presented by Minister Frydenberg as “backing the government’s energy policies — commending Australia’s commitment to affordable, secure and clean energy”. The report itself did no such thing, being highly critical in many areas, including Australia’s continuing failure to comply with IEA membership oil stockholding obligations of 90 days net imports. We hold less than half that, thus rendering Australia incapable of contributing to IEA collective action in the event of an international oil crisis; a further major security threat to the Australia community which has not been addressed despite repeated representations over many years.

In the light of these ingrained fiduciary failings, what of the bureaucracy, historically reverred for providing “frank and fearless advice” to the political class? It seems that analogy no longer applies. In recent policy reviews, the refusal to accept and articulate the implications of climate change on Australia shines through.

The December 2017 Review of Climate Change Policy was one of the most dishonest reports ever published by government in the climate arena. What purported to be a comprehensive review of the climate change challenge, and responses to it, is nothing more than a re-iteration of Australia’s wholly inadequate and inconsistent policies. No discussion of the latest climate science and its implications, no preparedness to face up to the real action required. In short little more than political whitewash for public consumption, pretending to do something whilst doing little.

The 2017 Foreign Policy White Paper acknowledged that climate change will be an important influence on international affairs, particularly in our region. It then anticipated: “buoyant demand for our exports of high-quality coal and LNG — ” based on the IEA NP scenario referred to above, around which policy is presumably centred, despite the fact that demand under this scenario would be decimated by climate impact. This should be unacceptable to DFAT as our lead Paris negotiator, as it is totally inconsistent with meeting Paris objectives.

The 2016 Defence White Paper for the first time did mention climate change in passing in one of its six key strategic drivers of Australia’s security environment to 2035 and it is understood the Department of Defence have since extended their planning to prepare for its impacts as a “threat multiplier”. This is encouraging, but far behind action being taken by the military overseas.

The overriding impression is that the Federal bureaucracy, with some notable exceptions, are not treating climate change with anywhere near the urgency it demands; whether because of political pressure to downplay the issue, or because of personal convictions, is not clear.

Either way, fiduciary responsibility arises again. The Australian Public Service Impartiality Value requires advice given to government to be: “apolitical, frank, honest, timely and based on the best available evidence”. Further, it must be: “objective and non-partisan; relevant comprehensive and unaffected by fear of consquences, not withholding important facts or bad news; mindful of the context in which policy is to be implemented, the broader policy direction set by government and its implications for the longer term”.

Henceforth, climate change will determine policy across the spectrum, encompassing national security, defence, energy, health, migration, water, agriculture, transport, urban design and much more. Given continued urgent warnings from scientists, including the government’s own experts, on the need for far more rapid action, the parlous state of our climate and energy debate and the shortcomings in policy formulation, the Federal bureaucracy is hardly meeting its own standards of fiduciary responsibility to the community.

So what can be done? Many argue that current failures are the nature of politics and we should expect little else. But when the key issues are existential, that is to consign democracy to the dustbin of history and to accept increasing social chaos. In contrast to earlier eras, the concepts of fiduciary responsibility, public interest and public trust, are clearly not understood by the incumbency, from the Prime Minister down. This has to be corrected.

A Federal Parliament with any degree of such responsibility, would recognise that climate change poses an unprecedented threat to Australia’s future prosperity, requiring emergency action. To those prepared to honour this obligation, there is ample information before parliament to warrant that conclusion. In the public interest, parliamentarians would set aside party political differences, adopting a bipartisan approach to structuring such action, with the bureaucracy in full support.

That is highly unlikely, so there remains legal action. Around the world the seriousness of the climate threat, and the inaction of governments, is prompting communities to take this step, with increasing success. The same will happen in Australia, absent an outburst of commonsense within the political class.

This article was published on Pearls & Irritations, RenewEconomy and Climate Code Red