Bob Carr: Bushfires push business on to the front foot
As global pressure mounts on Australia to act on climate change, businesses are realising they need to act. As published in the Sydney Morning Herald.
After a summer of mega-fires, the dramatic shift in thinking about climate change has not come from the public, or from politicians. It has come from business.
An IPOS poll this month showed 68 per cent of Australians are alarmed about climate change but there is no unified view about what must happen. Since the fires, the Coalition has shifted from pro-coal to pro-gas rhetoric. And Labor felt comfortable last Friday making its first new policy net zero emissions by 2050.
The bushfires have made businesses realise they need to act. But the boardrooms are strikingly ahead of Canberra. It’s inconceivable a big-listed company like a bank or resources giant would now ask shareholders to accept an open climate denier or sceptic on its board. One business leader told me last week this summer was their “oh crap!” moment. No business can now treat climate as a problem for the next generation of directors, decades off. The mega-fires confirm global warming is smack on the agenda, for currently serving directors and chief executives.
A senior figure in Australian superannuation told me that since January, the first question investors ask about any company they are considering is how it is managing climate. Some are even talking divestment from any form of carbon-related business, which hints at a touch of panic.
There are reports that the market for carbon offsets around the world is now in short supply. One company bought 400,000 tons last year. When it sought more in November, the price had sprung up 60 per cent. Seeking offsets for the same project in January, they found the price was up another 40 per cent.
Global pressure mounts on Australia. The world used to cut us slack because of our peculiar carbon dependency. No more. Two months of world news dominated by the Australian fires have hardened the attitude of neighbours like the Pacific Island states, of friends like Britain and Japan and of the European Union. They are now plainly irritated by what they see as Australia’s climate obstinacy.
That may be one factor in the Business Council of Australia embracing net zero emissions by 2050. Its director Jennifer Westacott knows there is a lot of capital sloshing around looking for opportunities in hydrogen or solar, in carbon storage and battery. Would they plant that money in Australia? Right now Australia looks as unfriendly to a conversation about climate as President Jair Bolsonaro’s Brazil.
After the fires, the question that looms for boardrooms is the next traumatic climate event. It’s a safe assumption it’s already in the pipeline, headed our way sometime in the 2020s. Might it be global, like methane plumes from dried out permafrost or a decisive collapse of ice sheets? What if it compels even the most tardy of governments into an improvised, disorderly response that hits business hard?
Australia saw unprecedented mass coral bleaching in 2016 and 2017. Each event took out a third of the Great Barrier Reef. One of my colleagues at the University of Technology Sydney, Emma Camp, an expert in reef ecology, says the evidence suggests marine heatwaves will increase – in frequency and intensity. Anticipate another mass bleaching in the next decade, leaving us a waste of rubble, a reef without coral.
World media would be merciless. Expect obituaries for the Great Barrier Reef on the front page of The New York Times. Expect CNN announcing another milestone in Australia rendering itself uninhabitable, maybe around the time insurance companies declare they can no longer carry the risk of insuring our fire-prone zones or coastal regions.
Just as a mountain of scholarly research warned higher temperatures would bring more serious fires, climate scientists have warned they bring more serious floods. Gore Vidal said that “I told you so” were the four most beautiful words in the language. Perhaps sweet enough to console our vindicated climate scientists.
Australian leaders won’t shrug it off with the thunderous cliche of quoting Dorothea Mackellar, as I heard Treasurer Josh Frydenberg do when addressing an Australian-Canadian forum in Melbourne two weeks ago. With a summer as hot as this one slated to hit us every eight years, we are now living in a new upper band of fire activity. The poet’s “droughts and flooding rains” are the scary new abnormal. It seems business knows it can’t afford to wait for them.
Bob Carr is the longest-serving premier of NSW and a former foreign affairs minister. He is the Industry Professor of Climate and Business at UTS.