Big money’s role in screwing the climate – and fixing it

In times of crisis, everyone’s a pragmatist. With the climate emergency steadily engulfing the world, it doesn’t matter what belief systems you bring to the table. It only matters that the deadly flow of carbon from the ground to the air is stopped.

In the lead-up to the COP26 climate summit the world scientific community, noting the rampant consumerism behind the threat to life systems, demanded global economic transformation. An important Glasgow sub-theme is capitalism – specifically the gung-ho form that has shaped today’s economies and turbocharged environmental degradation.

With time ticking away, governments are not responding quickly enough. The summit has sought to kick-start a rapid response, including a call for help from big capital. Having got rich on the back of screwing nature, helping in its rescue is the least the billionaires can do.

For its part, big capital is having to reinvent itself on the fly as the world at large awakens to the threat posed by humanity’s excesses. Warned by regulators, bankers and insurers of a material risk from climate change, an action alliance called The Investor Agenda has now attracted 733 of the world’s mega-rich representing about $A70 trillion in assets.

This is clearly not a trivial sum, but Scott Morrison is not for turning. At Glasgow the prime minister thumbed his nose at demands to do more, refusing to countenance phasing out coal and gas and ignoring potential penalties for exporters who ignore other countries’ carbon constraints.

Besides colossal tariffs on coal, a “carbon border adjustment mechanism” in train in Europe will impose lesser tariffs on our iron, steel, aluminium, grains, and meat and dairy products. The US and Canada have announced they are seriously considering similar tariffs. It’s a carbon tax by another name, except it will be imposed by foreign jurisdictions.

Australia rejected two Glasgow pledges – to stop using coal within two decades (we lined up with other coal producing countries including the US and China) and to stop public subsidies for fossil fuel projects unless national carbon pricing is in place. 

China already has a carbon price scheme and the US is contemplating one. The Coalition could opt to expand and enforce its own “safeguard mechanism”, but its long history of opposing carbon pricing says it won’t. So we’re more isolated than ever.

Measures like this are informing private capital around the world. Some large corporations relying on a long-term future for coal, oil and gas will fight them every step of the way. The Guardian’s Adam Morton reported last week that this will likely include secret legal actions seeking trillions of dollars in compensation from governments phasing out fossil fuels.

But the court of public opinion is the one that really matters. The mega-capitalists involved in The Investor Agenda are betting that the global public will continue to back strong action, and this will determine future policy. For that, while starting the process of re-shaping our economy, we will need venture capitalism to be heavily involved.

Firmly in this camp are Australians Mike Cannon-Brookes, creator of the software developer Atlassian and a campaigner for many years for renewable energy, and Andrew Forrest (“Twiggy” to his friends), founder of the mining company Fortescue.

Forrest is an improbable entrant into this space. Years ago he led the successful attack on Kevin Rudd’s proposal to tax miners’ super-profits (including his own), and has received hundreds of millions of dollars in government fossil fuel subsidies. But he says he’s now seen the light, indicated by an ambitious green energy agenda centred on hydrogen.

History offers plenty of instances of such people ultimately choosing to preserve their own wealth ahead of supporting the public good. There’s reason to be sceptical as to their longer-term commitment to humanity’s needs where this might compromise profit.

But right now, we need them. Democratic government is a cumbersome beast, essential to the success of the cause but by its nature prone to indecision and half-measures. In the handful of years left to get the country mobilised and fully behind reducing emissions, we need rapid and decisive actions, and for that, private capital is essential.

Discord over key elements supports the view of Swedish activist Greta Thunberg that the Glasgow meeting is a failure. But the girl who said panicking leaders would be a sign of progress should be pleased at the frenzy of activity around this massive gathering. 

Pledges already in place will make a difference; preliminary studies have even suggested they might keep warming below 2C. In any case it’s not over yet, and may yet deliver surprises. Fingers crossed.

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