Matt Canavan should stop wagging his finger at those who want climate action | Katharine Murphy
I have mentioned this before, but the mystery persists. Matt Canavan, the federal resources minister, has an economics degree, graduating from the University of Queensland with first class honours.
Canavan also worked at the Productivity Commission prior to entering politics, first as a staffer for Barnaby Joyce and then as a senator for Queensland.
His professional background would point to a basic level of respect for facts and evidence – unless Canavan was the only staffer ever to work at the Productivity Commission overheard insisting stoutly in the tea room that everything needed to remain just the same, forever. It would also suggest a degree of fluency with the concept of industry transformation, a minor speciality of the commission.
It is possible, of course, that Canavan departed the technocracy and sought refuge in political life in order to enact a state of being called the permanent present, but in any case, let’s not sweat the mystery, because we need to review the latest thinking of the resources minister.
In an interview with The Australian, Canavan – normally a great champion of the resources sector – shared a few words of rebuke.
If I’ve understood him correctly, the resources minister expressed objection to “loud” Australians getting all mouthy about climate change, in the process (somehow) encouraging resources companies (timid characters that they are) to advocate carbon pricing and discouraging banks (also notoriously timid corporate players) from lending to new coal projects.
“Loud” Australians, he said, were skewing the debate.
It’s not entirely clear who these “loud and undemocratic voices within our community” are. Perhaps Canavan meant the Reserve Bank deputy governor, Guy Debelle, who in March warned climate change poses risks to Australia’s financial stability, and, in the process, noted policymakers needed to consider warming as a trend and not a cyclical event.
Perhaps he meant the banking regulator, the Australian Prudential Regulation Authority. In March Apra flagged an intention to increase scrutiny of how banks, insurers and superannuation trustees are managing the financial risks of climate change to their businesses.
The Apra executive board member Geoff Summerhayes noted earlier this year the drive towards decarbonisation was being driven not by noisy undemocratic interests but “by the decisions of governments, business leaders, investors and consumers”.
The regulator surveyed 38 large banks, insurers and superannuation trustees in 2018 to assess their views and practices on climate-related financial risks, and that survey found a third of respondents believed climate change was a material financial risk to their businesses right now, and half believed it would be in the future.
Half of the insurers surveyed said they were already feeling the effects of climate change. “Companies that fail to respond to these forces risk being left behind,” Summerhayes said.
Perhaps Canavan meant the corporate regulator Asic. Last year that regulator said climate change was “a foreseeable risk facing many listed companies in the Australian market in a range of different industries” and warned directors and management of listed companies “to understand and continually reassess existing and emerging risks including climate risk that may affect the company’s business”.
In that report, 17% of listed companies in the Asic sample identified climate risk as a material risk in their operating and financial reviews.
Just in case this isn’t obvious, this isn’t wild, activist talk fomenting in the organic groceries of Brunswick, a revolution cooked up between the kale and the quinoa. This is hard-headed analysis by regulators with serious governance responsibilities.
This is an inconvenience, I suspect, for Australia’s resources minister but basic facts don’t change courtesy of an election result.
Governments don’t mandate reality, even when they win elections they didn’t expect to win.
Basic facts remain the same.
Canavan reasons these companies need to desist with their current dispositions on climate change, carbon risk and lending because the voters have spoken. Well, which voters? Because when it comes to this issue, voters expressed different views in different parts of the country. Which voters are we heeding?
Here’s another basic fact. It is profoundly obvious to anyone taking the time to absorb what resources companies are saying about carbon pricing that this is not some weak-kneed capitulation to abstract activism (although obviously these companies are attentive to the views of their shareholders, who are increasingly attentive to carbon risk).
The persistent call is actually a cry for help. Fiona Wild, the head of sustainability at BHP, told the Australian Financial Review last year carbon pricing was both a thing, but also a proxy for something that’s been missing from climate and energy policy in Australia for the best part of a decade.
“I think in the Australian context what we’d really like to see is a really well integrated climate and energy policy which looks at affordability, reliability and emissions reductions and that’s what we’re aiming for,” Wild said last October.
Big corporations can’t operate in a world that remains tethered to the permanent present of Canavan’s imagining, they have to plan for the future, and the future is carbon constraint.
That will either happen in a managed fashion, where governments tell Australians the truth about what needs to happen, and try to smooth the transformation, or it will happen chaotically, with maximum cost and maximum mayhem.
Rather than wagging his finger at banks and resources companies, which operate in the real world and make rational decisions, Canavan would be better placed thinking about his core responsibilities as a policy maker, including what the resources industries of the future might look like, and how to create economic opportunity for the blue collar workers he purports to represent.
Katharine Murphy is Guardian Australia’s politicial editor