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The biggest game on Earth

By Paul Gilding - posted Wednesday, 14 February 2007


Like many deeply involved in the climate change issue for the past 20 years, I've been feeling disoriented. Suddenly it's a top-order political issue, nationally and globally, and arguably the defining issue of our times. Carbon trading is just around the corner, conservative green politics has arrived and for consumers, paying for your carbon will soon be normal operating procedure.

In 30 years' involvement in social and environmental issues, I have never seen an issue move so fast or so dramatically as did this one in the spring of 2006. Nor have I been so excited at the potential for rapid, far-reaching change. So what happened and, more important, what happens now? Is this a genuine global environmental spring or is this some kind of weird drought-influenced aberration that will pass and normal transmission will then return?

And carbon pricing - what does it mean and how will it work? What are the implications for Australia and for key industries? With the arrival of "conservative green", will politics in Australia be the same again?

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Let's start with the science which is worth revisiting briefly for one reason. Unlike most other market and political questions, where the uncertainties of human behaviour, technology and political trends make predicting the future a dangerous though interesting activity, climate change is different. It is driven by science, by physical realities, like the heat-trapping nature of greenhouse gases. We put more CO2 pollution in the atmosphere and more heat will be trapped. If it gets hotter, the climate will change.

So as the science became accepted over recent years, the direction of the market became crystal clear. People, including some titans of industry, thought it through. They realised if this relationship is a fact, and the effects we see are already significantly negative, such as our hopefully soon-to-break drought, then the future suddenly looks deeply unstable, potentially catastrophically so. The conclusion: time to act.

Enter John Howard. The point that marked the end of the climate-change winter in Australian politics was the Prime Minister's long interview on Four Corners on August 28 last year. Our most brilliant politician looked unusually uncomfortable and clearly offside on a leading issue. Critically in this case, he looked out of touch with much of corporate Australia, whose interests he was defending.

People who monitor these issues had two reactions to the PM's interview. Some thought well, that's it, this long winter of inaction and denial will continue as long as Howard is in charge. He clearly will not shift and therefore this country will not shift for many years.

Others, including myself, said, "No, this is the end, the thaw is on." It's not just the icecaps that are melting. Howard, master of his craft, would not stay out of touch with the people in an election year. He'd flip like a circus acrobat, and make climate action look like part of the plan all along.

There was something else at work. For several years I have had many influential chiefs of Australian business talk to me privately about their increasing frustration with the Government's lack of action on climate. They saw the science, they saw the future and they were worried. They were worried for their children and yes, corporate chiefs do worry about their children's future and deeply so.

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But more immediately they were worried about the Australian economy and their own companies' ability to grow and succeed. So they started to talk to each other, privately and in hushed tones, aware that they were coming up against the government of the day and a PM who had decreed supporting strong action on climate to be politically incorrect. Yet their frustrations were steadily building.

The dam started to crack when a group of large corporates, mainly Business Council of Australia members, teamed up to form the Business Roundtable on Climate Change. They hoped for safety in numbers.

Working with the Australian Conservation Foundation, they commissioned research into what needed to be done and what it would cost to act, or not to. They concluded heavily in favour of early action because it was cheaper. They released their report in April 2006, triggering a collapse in the business community's opposition to pricing carbon.

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First published in The Australian on February 10, 2007.



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About the Author

Paul Gilding is an independent adviser and commentator on sustainability and climate change and a Special Advisor to KPMG. Former roles include executive director of Greenpeace International, founder of Ecos Corporation and CEO of Easy Being Green. www.paulgilding.com

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