By relying on consultants for policymaking, the government avoids making any serious contribution to the global effort to minimise temperature rise.
This is the second part of a two-part article. Read the first part here.
The Glasgow COP26 meeting demonstrated the fallacy of adopting the populist objective of net zero emissions by 2050 (NZE2050) as a sound basis for climate action globally. This has long been evident, yet even well-informed scientists resisted the pressure to aim for more rapid action, to avoid questioning the official party line, thereby playing to the fossil fuel industry’s “soft denial” agenda.
Some progress was made, but in reality the COP26 outcome was disastrous in the context of real climate action because if net zero emissions has to be reached by 2030 rather than 2050, as the science dictates, then the emission reduction strategies adopted globally have to be fundamentally different from those aimed at achieving NZE2050.
It is no longer possible to avoid catastrophic climate change with an orderly transition to NZE2050. By then global average temperatures will have moved beyond the Paris Agreement range of 1.5-2 degrees, possibly leading to an irreversible transition to “Hothouse Earth” conditions. Critical tipping points are already being triggered at today’s 1.2 degrees.
If the global community is serious about avoiding catastrophic climate outcomes, the only option is emergency action. This means that solutions have to be prioritised to achieve the fastest possible transition to zero carbon economies. The “Australian Way” plan, with its vague targets and lack of urgency, is totally at odds with this reality.
The immediate priority is to reduce carbon emissions as fast as possible; nothing is more important. This conflicts directly with the “soft denial” fossil fuel expansion mantra promoted by the industry here and overseas, and embodied in the Morrison government’s plan. Certainly fossil fuel will be needed for some time to come, but not expansion, as the International Energy Agency has confirmed.
Inevitably rapid emissions reduction will cause disruption and social friction, as already evident with the recent hike in energy prices in Europe. But it is the failure of the free market model, with the attendant inaction and delaying tactics long adopted by its proponents in conservative governments, media and the fossil fuel industry, which has brought us to this point, increasing climate risk to an existential level.
Reliance on voluntary action and market forces will no longer suffice. A war-footing approach with mandated action is essential. In this context, techno-utopian solutions built around silo-based venture capital models are insufficient. Technological innovation is critical, but it must be embedded in a systemic change framework so that innovations work in concert, becoming self-reinforcing to achieve emissions reduction in short order.
A re-ordering of societal priorities is essential. Climate change now represents an immediate existential threat to the global community, such that all required resources must be devoted to overcoming it. This means unprecedented global co-operation, within and between the developed and developing worlds. Escalating defence budgets in particular need to be redeployed around climate action; there is little point in developing increasingly sophisticated means of killing one another when the future of civilisation itself is at stake.
Statesmanship that prioritises the global common good, rather than libertarian individualism or authoritarian nationalism, becomes critical.
The role of the consultants
In these circumstances, it is astonishing that one of the world’s top consulting companies, McKinsey & Co, lent credibility to the “Australian Way” charade.
McKinsey’s role, “drawing upon its extensive database on low emission fuels, technologies and processes”, encompassed “a bottom-up analysis of the contribution the technologies prioritised through the government’s technology investment roadmap, combined with global technology trends, could make towards Australia achieving NZE2050”. The firm also “undertook supplementary analysis of the employment impacts and opportunities associated with Australia’s net zero target and the broader global shift toward low-emission technologies”.
All of this, in isolation, is relatively innocuous, apart from the fact that the detailed conclusions from this work are not available publicly, which they should be given the importance of this issue and McKinsey’s taxpayer-funded $6 million consulting fee.
However, the McKinsey name is liberally scattered throughout the documents, presumably to assist Emissions Reduction Minister Angus Taylor, himself a McKinsey alumnus, to gain support for the policy, which he attempted to do continually at the Glasgow COP26 meeting and has done since. In the process, Australia’s credibility as a serious contributor to global climate action was severely undermined.
In a broader context, McKinsey has long been advocating the need for urgent action to address climate risk. New initiatives focus on the need to stay within the 1.5 degree lower level temperature increase of the 2015 Paris Climate Agreement, and McKinsey’s commitment to assist clients in so doing. Another paper emphasises the case for resilience in protecting people from climate risks as temperatures rise, and most recently the complexities of a net zero transition consistent with achieving 1.5 degrees.
The Morrison government’s NZE2050 plan, with its blatant expansion of fossil fuel use rather than making any serious contribution to the global effort to hold temperatures at 1.5 degrees, will exacerbate the problem. McKinsey, at the very least given its knowledge of climate risk, should have highlighted these dangers or otherwise decline the commission. Instead, it chose to indirectly aid and abet the government in presenting the plan as a credible Australian response to climate risk, which it patently is not.
McKinsey is already under internal criticism for the disconnect between its supposed values around climate change and its actual consulting advice to clients. Its support for the Morrison government’s plan is yet another dangerous example.
Apart from McKinsey, Taylor unsurprisingly appointed Dr Brian Fisher to chair a panel overseeing the modelling. Dr Fisher, for the last three decades, has been the “go-to” expert for climate denialist modelling, renowned for overestimating the costs of climate action and underestimating, or ignoring, the costs of climate inaction. With remarkable volte-face on this occasion, he apparently had no problem with the costs of climate action being underestimated and the cost of inaction again ignored. Dr Fisher’s track record does not engender confidence that the government’s plan is built upon a great deal of objectivity.
The role of consultant Reputex in the Labor Opposition’s modelling can be similarly criticised for failing to draw attention to the dangers of ignoring the impacts of climate change up to 2050. This is slightly more understandable given the ALP is trying to present as small a target as possible before the election. But the fact remains that by not articulating these impacts, it is made easier for the ALP to avoid addressing reality in its climate policy.
Responsibilities and liabilities
The Australian public service has been severely run down by conservative governments for years and its policymaking capability eroded. The climate policy debacle represented by the government’s emissions reduction plan demonstrates only too clearly the dangers of relying on consultants to replace the “frank and fearless advice” for which the public service was previously known.
The consultants here no doubt had terms of reference which excluded wider considerations of climate impact. However, given that they are all well aware of the existential threat that climate change now represents, it is morally and ethically unacceptable for them to undertake such commissions without articulating publicly the dangers of ignoring climate impacts, hence the resulting bias of the analysis.
By remaining silent, McKinsey in particular has substantially aided and abetted the Australian government’s climate denial leadership in international forums. This has not just undermined global efforts to address climate change, but also weakened Australia’s opportunity to seize the benefits of rapidly transitioning to a low-carbon economy.
Recalcitrant companies face increasing legal liability for failing to address climate change seriously. So far consultants have not been subject to the same legal sanction, but that might now change.
That said, there is clearly a valid role for consultants in providing an independent perspective on complex issues which any organisation, government or otherwise, may not be equipped to assess – particularly to break down the barriers of “groupthink”. But this must be done objectively against an ethical framework which does not allow both client and consultant to become part of the same “groupthink” problem, as in this case.
From a government perspective, cherry-picking consulting advice to justify pre-ordained policy is unethical at any time. Doing so with climate policy is lethal. There is an urgent need to rebuild public service capability to avoid such gross misuse of consultants.
Ian Dunlop was formerly an international oil, gas and coal industry executive, chair of the Australian Coal Association and CEO of the Australian Institute of Company Directors. He is a member of the Club of Rome and Chair, Advisory Board, Breakthrough National Centre for Climate Restoration. Executive Committee member of the Australian Security Leaders Climate Group.
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