Money Talks On Climate Change
Sydney Morning Herald
Monday April 10, 2006
THERE is no more persuasive force for change than money - ours, not other people's. Take rising petrol prices, which are expected to hit peaks of about $1.40 a litre over Easter. Car sales are still healthy, but 30 per cent of new small car buyers are trading down from large cars and 12 per cent from four-wheel-drives. So much for entrenched consumer preferences. If a habit is going to cost us too much, we are willing to trade in our resistance to change. So it is with global warming and the greenhouse effect. Six of Australia's largest companies have been crunching their own numbers in the face of extreme weather around the world and alarming future scenarios for Australia as temperatures rise.
Cost modelling is nothing new. The do-little approach of the Federal Government to climate change is based on cost - the potential cost to the economy of reining in lucrative, but high-emission industries such as coal-fired power and aluminium. But the new Australian Business Roundtable on Climate Change has added the missing variable to its calculations: the economic cost of inaction. The group believes rising greenhouse gas emissions threaten the entire Australian economy. Temperature increases will hit two of Australia's largest export earners, tourism and agriculture, especially hard, jeopardising 250,000 jobs. Australia must cut emissions by 60 per cent by 2050. The longer the delay, the higher the final bill. The business group - comprising Westpac, BP, Origin Energy, Visy and the insurers IAG and Swiss Re - has transformed the debate with its contribution. If big business has concluded change is necessary, and has the figures and the science to demonstrate the high price of sitting on our hands, the Federal Government is left in an unenviable position. Governments are supposed to lead, but the Federal Government, lacking a clear policy direction, has been sidelined now business has put forward its own solution. As the group's six members see it, they have no choice. CSIRO research warns a temperature increase of 2 degrees could bleach the Barrier Reef, dry up most of Kakadu's wetlands and reduce livestock capacity in inland Australia by 40 per cent. Big insurers are already at the sharp end of global warming. The increasing frequency and ferocity of extreme weather is pushing insurance costs up sharply and leaving some sectors unable to afford insurance at all. The business group's solution is a principle the Federal Government has long resisted: polluters must pay. One option is a carbon trading scheme, whereby polluters can purchase carbon credits from clean industries, such as solar energy or forest owners, to offset their emissions. Another is a carbon tax. Carbon trading is the backbone of the Kyoto Protocol on global warming, which Australia and the United States have refused to sign. Whether Australia remains outside Kyoto, however, is largely irrelevant. The Howard Government can act nationally. The business group has presented policy makers with a formidable challenge to respond to. It is likely its members are acting from self-interest. Businesses usually do. But the six could prove exactly the kinds of partners the green lobby needs. They speak the plain language politicians and consumers understand - money.
© 2006 Sydney Morning Herald