Madeleine Gordon|Climate Change & Energy Security Fellow
"I'm not relying on evidence for climate change."
Liberal Senator Jim Molan’s statement on Q&A on 4 February, on the existence of human-induced climate change, was met with derisive laughter from an audience of bushfire victims.
Watching it, I felt most of Australia sigh from behind their TV screens.
It was the latest story in the long-running climate change debate, a debate hamstrung by vested interests, political division and misinformation. A debate that the Australian public can’t help but laugh at.
But while Australia’s top politicians are still questioning the existence of climate change, other sectors of society have gotten on with the job, already implementing adaption and prevention measures. The financial sector, the ADF, and lower levels of government, are three powerful examples.
The Financial Sector
Australian financial institutions such as ANZ, CBA and NAB are seeking to distance themselves from the thermal coal energy sector. CBA (PDF) and NAB have committed to a withdrawal from the thermal coal industry by 2030 and 2035, respectively. Documents leaked in December 2019 revealed ANZ’s plan to also reduce its thermal coal power loans by more than $700 million by 2024 at the latest.
In the insurance sector, IAG (PDF) is shifting its equity holdings away from companies that are highly exposed to or ill-prepared for climate change. The Insurance Council of Australia, the peak representative body for the Australian general insurance industry, has established a Climate Change Action Committee tasked with modelling climate change risks to prepare companies for future challenges.
Internationally, American bank Goldman Sachs, announced that it will no longer be directly financing thermal coal mines or coal-fired power plants. It also committed $1.1 trillion to fund climate change action initiatives. BlackRock, the world’s largest fund manager, has pledged to no longer directly invest in businesses that generate more than 25 per cent of their revenue from thermal coal production.
The Reserve Bank of Australia (RBA) has also expressed concerns.
In February, RBA Governor, Philip Lowe, warned that the ‘economic implications [of climate change] are profound’, acknowledging the role that this summer’s natural disasters have played in reducing economic growth by approximately 0.2 per cent in the December 2019 and March 2020 quarters. He attributed this decline to rising insurance costs, falling consumer confidence, shifting investment and damage to Australian exports.
This follows a similarly concerning report (PDF) from the Bank for International Settlements (BIS), effectively the world’s central bank, warning of the potential for environmental factors to trigger the next systemic financial crisis.
These changes demonstrate a widespread understanding within the financial sector of not only the existence of climate change, but also its severe economic ramifications.
Despite its reputation for conservatism, the ADF has been vocal in its concern regarding climate change.
In a speech prepared for the Chief of the ADF, Angus Campbell in June last year, it was stressed how climate change will likely worsen conflicts and stretch the defence force’s disaster response capabilities. Admiral Chris Barry, former Chief of the ADF, has also warned of the potential for rising sea levels to trigger an influx of migrants and for natural disasters to challenge defence resource constraints.
These concerns were further reflected in ADF briefing notes from 2018 which suggested that the Navy may have to shift more resources into Australia’s northern waters to manage the flow of climate migrants.
These statements demonstrate an understanding at the top levels of the Australian military of the threats posed by climate change and how ADF resource allocation must be adjusted to effectively respond.
The Local and State Governments
Lower levels of government have also been proactive in their response to climate change.
At a state level, we have seen the development of legislation designed to mitigate the impacts of climate change.
For example, in NSW, the latest version of the Coastal Management Act 2016, explicitly mentions the need to mitigate against climate change by enhancing the resilience of littoral rainforests, estuaries, coastal lagoons and wetlands. In contrast, the 2010 equivalent made no reference to climate change, demonstrating the development of concrete measures by the NSW Government to address this environmental challenge.
Local governments have also been responsive. A ClimateWorks Australia study (PDF) published earlier this year revealed that 58 per cent of sampled local governments had either committed to cutting operational emissions to zero by 2050, or made other commitments comparable with this goal. Operational emissions are those emitted from local government functions such as community facilities and waste management. 37 per cent of sampled local governments have committed to zero community emissions by 2050.
In contrast, the Federal Government has not set a 2050 emissions target. Its current commitment, a 26-28 per cent reduction on 2005 levels by 2030, placed Australia’s last out of 57 countries and the EU for ‘climate policy’ in the 2020 Climate Change Perform Index (PDF). While Finance Minister, Mathias Cormann, has affirmed that a longer-term target will be set before COP26 (the UN Climate Change Conference), ongoing divisions within the Coalition will make this difficult.
The difference between local and federal responses was demonstrated this summer during the bushfire crisis. The Federal Government’s Bushfire Recovery Agency has been widely criticised for tying disaster relief in red tape. As of 1 March, only 17 per cent of applications for business grants and 4 per cent of concessional loan applications had been approved.
In contrast, the NSW Government (PDF) has quickly responded, paying all council rates from 1 January to 30 June (including back payments) for residents who lost their home or business. Fees are waived and refunds issued within a few working days after victims present to a Service NSW centre.
In the Bega Valley, a region heavily impacted this summer, the floods that extinguished this summers’ fires washed ash and sediment into the Brogo Dam, making it undrinkable. In response, the local council organised for ADF personnel to construct a water purification plant. The project was completed in ten days.
While the actions of local and state governments are encouraging, they are not a replacement for leadership from the top.
If the Federal Government remains stuck in its scepticism, it risks falling further out of touch with an Australian society that has already moved forward.
Madeleine Gordon is the Climate Change & Energy Security Fellow for Young Australians in International Affairs.