11/12/2019

(AU) No More Room For Excuses On Climate

AFR - Ben Potter

Kenneth Hayne's blunt warning to company directors will register: directors can’t hide behind confused politics and “culture wars” to evade their duties to act on climate change because the law and the science are clear.


The message of Kenneth Hayne’s dramatic intervention in the climate debate is clear.
Company directors can no longer hide behind flaky excuses – such as the difficulty of shifting fossil fuel-heavy industries to clean energy, the lack of political consensus or an imaginary lack of scientific  consensus – for failing  to take account of climate risks and failing to tell investors what steps they are taking to reduce those risks.
Hayne pointedly attributes these bad habits to a state of “learned helplessness” – directors convincing themselves that it’s all too hard or that Australia’s small economy can’t shift the dial on a global problem – and “entrenched short-termism”.
He doesn’t single any company out, but examples abound. On Friday, Washington H Soul chairman Robert Milner shut down the annual meeting to duck questions on the climate risks facing the company’s coal mining subsidiary New Hope Corp.
Hayne’s blunt speaking and national profile ... will ensure the remarks reach a wide audience. Directors will sit up and take notice.
Last week, BlueScope Steel chief Mark Vasella declared there was no commercially viable alternative to using coking coal to make primary steel, focusing on the short term when he should have declared that BlueScope would embrace new low carbon steelmaking technologies being developed in Europe as soon as they became viable.
Rio Tinto and Fortescue Mining have made excuses for not matching BHP and Vale’s pledge to set goals or targets for customers’ carbon emissions, known as scope 3, as well as their own scope 1 and 2 emissions (though Rio is working with China's largest steelmaker on emissions reductions).
Hayne’s message is shared by a broad group of senior financial regulators, investors, bankers, top federal public servants, insurers and lawyers with whom he attended a business roundtable on climate risks organised by the Centre for Policy Development two weeks ago, and a similar event in February.
But Hayne’s blunt speaking and national profile as a former royal commissioner and High Court judge will ensure the remarks reach a wide audience. Directors will sit up and take notice.
Conclusions from the roundtable, prepared by the CPD and not signed off by participants, say directors can no longer afford to take action in their own sweet time because climate risks are “ratcheting” and the obligation to counter them is mounting.
The situation is especially hazardous for Australian businesses which are “at increasing risk of retaliatory action from other countries because of a perceived view that Australia is not pulling its weight when it comes to reducing emissions”.
Alcoa's plan to shut high-cost, high-emissions smelters such as Portland is one example.
There is a template for reporting climate risks – the Task Force on Climate-related Financial Disclosure – but compliance is patchy and insufficient.
Look no further than Whitehaven Coal or New Hope’s “with one leap he was free” reporting, which assumes rapid, long-term growth in thermal coal consumption in Southeast Asia.
TCFD reporting will eventually become mandatory, and directors will need to rigorously comply as part of their efforts to “pull forward the transition” to a zero carbon real economy.

The law and science are clear
Conclusions from the roundtable note that collaboration between the private sector and government “is happening globally ... but must also happen domestically” and helpfully suggests that this “could be co-ordinated by a central Commonwealth government department”. If only we had such a department!
Hayne’s final point is that directors can’t hide behind confused politics and “culture wars” to evade their duties to act on climate change, because the law and the science are clear.
They must recognise the nature and extent of their climate risks and the speed at which change must be made, develop a strategic plan and “report about what they have done, are doing and will do in response”.
The choice for the board is between “responding or having a response thrust upon the company”.
And the kicker? Look at the financial losses of banks whose boards put profit before risks that they mistakenly thought were “non-financial”.

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The World Has Reacted To Australia Being Swallowed By Flames

NEWS.com.au - Natalie Brown | Adrianna Zappavigna

The world has watched in horror as bushfires continue on their war path through Australia, saying the nation is “choking” as it burns.
Smoke haze from bushfires in New South Wales blankets the CBD in Sydney, Friday, December 6, 2019. Picture: AAP Image/Bianca De Marchi. Source: AAP


Media outlets around the world continue to react to the dozens of blazes burning across the country with the New York Times taking aim at Australian Prime Minister Scott Morrison.
With 96 bush and grass fires still burning in NSW - 47 of which are not contained - photos of Sydney’s sepia-toned sky and blood red sun continue to dominate social media feeds.
Global publications and angered readers have shown no mercy, blaming the Australian government and their failure to address the current climate crisis while calling the nation “the indirect architect of its own demise”.
In the midst of loss and tragedy for many Australian families, Prime Minister Scott Morrison’s leadership has been harshly spotlighted by international media. The thick grey smoke that has blanketed the city’s skyline and coast for days looks “as if the country were being devoured by a chemical reaction”, award-winning novelist Anna Funder described in The New York Times, writing that the failure of the government to acknowledge the current climate crisis “is literally choking our children”.
“The response has been to double down on denialism,” director of the Sydney Environment Institute at the University of Sydney, David Schlosberg, told the publication.

The New York Times said that Sydney was choking as Australia burned. Source: Supplied
The author of the Times piece wrote that the government, in refusing to address the threat of climate change, is “favouring the country’s powerful fossil fuel industry over its largest city, as well as the rural areas where fires have already destroyed hundreds of homes”. As the New York Times wrote, the Prime Minister has avoided addressing his inaction on climate change and instead, “he recommended downloading an app that tracks the bush fires”.
The article was flooded with angry Twitter comments, from Australian and international users who couldn’t contain their frustration.
“I would like an app that gives instant polling so the Government can see what we think of them,” wrote one reader.
Another added, “We feel you, signed California.”
Many have even begun drawing links between the Australian fires and those in California, highlighting a disparity in world coverage.
Readers of The Guardian have echoed the sentiment, with one responding to footage of the NSW “megafire” with: “Oh look. Scott Morrison’s climate policy in glorious technicolour” and another saying, “This looks like hell.”
“Here we are in the worst bushfire season we’ve ever seen, the biggest drought we’ve ever had, Sydney surrounded by smoke, and we’ve not heard a boo out of a politician addressing climate change,” climate scientist Sarah Perkins-Kilpatrick told the British publication.
“They’re burying their heads in the sand while the world is literally burning around them and that’s the scary thing. It’s only going to get worse.”
The Guardian's coverage of the bushfire crisis. Source: Supplied


The Guardian has reported Australia is 'literally' burning. Source: Supplied
Asian publications like the Straits Times and South China Morning Post have written extensively about Sydney’s poor air quality, drawing comparisons between the city and Shanghai.
“The Australian city of Sydney is world famous for its shimmering harbour and clear blue skies,” the Straits Times wrote.
“Not this summer.”

The Straits Times has compared Sydney's air quality to Shanghai's. Source: Supplied
According to health officials, the thick smoke haze has led to a 25 per cent increase in people presenting in emergency departments for asthma and breathing problems.
“Desperately sad,” commented one reader.
“The ‘lucky country’ no more.” America’s ABC News shared footage of Sydney’s hazy conditions, prompting angry reactions from followers, who demanded that the government take responsibility.
CNN documented the nation’s tragic transformation - from blue skies to shades of grey - in a before and after comparison piece. The photos painted a grim picture of the “longest and most widespread” period of air pollution NSW has ever seen. Desperate for people to understand a whole country is burning, a man posting under the name Nigel Lake on Twitter shared a stirring poem dedicated to our scorched country. The prose was titled “How good are 90 bushfires?!” - a play on the climax of ScoMo’s victory speech in which he declared ‘How good is Australia!’
“Brilliant!!! Can’t stop crying and mourning for our beautiful land,” said one reader.
In a sea of images being posted online - many showing the devastation of the fires and the wall of flames our fire crews are up against - one furious Twitter user wrote, “I don’t want the Prime Minister’s thoughts and prayers.” As one nation’s climate crisis burns bright, many have pointed to the potential damage caused in surrounding nations. As ash rained down on New Zealand’s glaciers - even turning some pink - many questioned whether the heat from ongoing fires would see “one climate disaster accelerate another”. Former Pime Minister Malcolm Turnbull’s words hit home, as he shared a photo of a smog-covered city on a flight back home. “I have flown back into Sydney many times but never to a sight like this,” he shared on Instagram.
“The reality of climate change - hotter and drier means more fires.”
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(AU) 'National Security Issue': Turnbull tells Q&A Morrison Must Step Up Response To Bushfire Crisis

The Guardian - 

‘This is an issue that needs leadership,’ Malcolm Turnbull tells ABC panel show
Malcolm Turnbull on Q&A on Monday. He said Australia’s emergency response structure was no longer fit for purpose as bushfires worsened. Photograph: ABC TV


Malcolm Turnbull has called on Scott Morrison to step up his response to catastrophic bushfires fuelled by climate change, declaring that emergency management in Australia needs to be restructured because the threat is now a “national security issue”.
Before a speech to an energy conference on Tuesday where he is expected to lament that climate change has become “a political battlefield”, Turnbull told the ABC on Monday night the Morrison government had to provide hands-on leadership and coordinate a national response to a bushfire emergency, which has claimed six lives and destroyed more than 680 homes, and is expected to intensify in coming days as summer temperatures breach 40C.
“When Australians’ lives are at risk, when they are being threatened, when their families and their homes and their crops and properties and everything they hold dear is being put at threat – that’s a national security issue,” Turnbull said on Monday night.
“If it isn’t a national security issue, what is? The national government has to provide leadership. Obviously the federal government can’t do everything but the federal government’s job is to lead and this is an issue that needs leadership.”
The former prime minister said the management of bushfires in Australia was traditionally a matter for state and local governments, with the fire events managed by a largely volunteer workforce.
While paying tribute to the fire brigades working around the clock to manage the emergency, Turnbull said the current structure was no longer fit for purpose in an environment where global warming fundamentally changed the risk assessments; where the fires would get worse. “We can’t kid ourselves that we’re not going to face more and hotter fires. That’s the consequence of global warming.
“That is what you get if you have a hotter and drier climate, more fires and hotter fires. So we have to review the measures we’ve got to defend ourselves against fires and upgrade and improve them, because the challenge has changed. You can’t keep on responding in the same way you have in the past.”
Turnbull said Australians needed to understand the seriousness of the fires and the consequences of the changed environment. “These fires can be 1,000C. They will melt everything except steel.”
He recounted his experiences visiting the scene of the Black Saturday bushfires in Victoria a decade ago. “We saw cars which had been caught up in the fire which people had been in, and there was nothing left except the steel,” he said. “The glass had melted and flowed down over the car, over what was left of the dashboard and the floor.
“The aluminium and the wheels had melted and it was left run out on the ground. That is what our firefighters and our communities in rural areas and areas around our cities are facing.”
Turnbull said when he was prime minister, and there were truck attacks launched in Europe by terrorists, he had thought it prudent to bring together state leaders, state police, local government and the private sector to develop a crowded places counterterrorism strategy to try to prevent copycat events in this country.
He said a similar adaptation was required for disaster management. “We can’t kid ourselves that we’re not going to face more and hotter fires. That’s the consequence of global warming.”
Turnbull continued to argue on Monday night, as he did in a broad-ranging interview with Guardian Australia late last month, that the Coalition struggled with the reality of climate change. He said the government roiled “because there is a group within the Liberal party and the National party who deny the reality of climate change”.
Asked if Morrison and other ministers had declined until recently to meet with a vocal group of retired fire chiefs because they styled themselves Emergency Leaders for Climate Action, Turnbull said he wasn’t there to “run the ruler over Scott Morrison’s appointments diary”. He said: “Whether you have the meeting or not, the bottom line is you’ve got to address the issue.
“We’ve got all the tools. What the problem is that people are treating, on the right, they are treating what should be a question of physics and science and economics and engineering as though it were an issue of religion and belief. And it’s nuts.”
The Labor leader, Anthony Albanese, appearing on the same program, echoed Turnbull’s critique. Albanese said he had written to Morrison three weeks ago calling for a national response. “He wrote back to me saying it wasn’t required, and that everything was in hand, and quite clearly it’s not.”
Albanese said greater coordination was needed because wildfires like the ones Australia is now experiencing did not recognise state boundaries. “At the moment, there is a single fire that is burning from the Hawkesbury right up to Singleton, a single fire.
“This is connected with climate change. To say that is to not dismiss the need to deal with the immediate, which is keeping people safe, keeping property safe, the immediate response, but we need to accept that we need adaptation, we need mitigation and we also need a long-term plan to deal with climate change, because you have areas that are burning that have not burnt before, because they’re drier, because of what’s been happening on this continent in recent times – this is an emergency. It’s affecting our security.”
Labor has called for an urgent Council of Australian Governments meeting to ensure Australia has the water-bombing aircraft, volunteer incentives and other measures necessary for the future but, speaking to the ABC’s Insiders program on Sunday, the government’s leader in the Senate, Mathias Cormann, said the government was already responding as needed.
“If and when additional support is required, then, of course, we would consider that, but right now as we speak, you know, we obviously planned for this bushfire season and we have put significant measures in place and we have put significant measures in place for the future too, to better address, you know, these sort of emergencies into the future,” Cormann said.
Turnbull on Tuesday will address an energy conference in Sydney, and is expected to argue that southern Australia will face more heatwaves, fires, floods and droughts in the coming decades, with “a huge impact on our water and food security, ecosystems, transport, health and tourism”.
“We in Australia, more than many if not most countries, are facing the actual lived experience of climate change, and yet the debate, particularly in Australia, is stuck – with many, particularly on the right of politics and the rightwing political media, refusing to acknowledge the science, instead stubbornly – and blindly – holding to their political positions.”

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10/12/2019

(AU) About 100 Countries At UN Climate Talks Challenge Australia's Use Of Carryover Credits

The Guardian - 

COP25 delegates from developing countries try to ban the emissions accounting measure in a clause described as an ‘anti-Australia option’
Extinction Rebellion protesters at the COP25 UN climate talks in Madrid where Australia’s use of carryover credits has been challenged by about 100 countries. Photograph: Pablo Blázquez Domínguez/Getty Images
Australia’s plan to use an accounting loophole to meet its international emissions targets has been formally challenged at UN climate talks, with about 100 countries wanting the practice banned under the Paris agreement.
Delegates from developing countries led by Belize and Costa Rica have introduced a ban on using carryover credits from the Kyoto protocol into the text of the rulebook for the Paris climate agreement, which is being debated at a meeting in Madrid.
It is a crucial debate for the Morrison government as it relies on using the accounting measure to meet its commitment under the Paris deal. The emissions reduction minister, Angus Taylor, arrived in Madrid on Sunday to make Australia’s case at the second week of the talks.
Emissions projections released as Taylor left Australia suggested the Morrison government was on track to meet its 2030 target (at least a 26% emissions cut below 2005 levels), but only if it used carryover credits. Without them it expected emissions to achieve just a 16% cut. Government advisers found Australia’s fair share under a meaningful global deal would be at least 45%.
Carryover accounting rules allow countries to claim credit for exceeding previous targets against future targets. They were allowed under the soon-to-be-obsolete Kyoto protocol to encourage countries to be as ambitious as possible. They were not mentioned in the original text of the Paris agreement.
The introduction of a ban on what are described as “Kyoto units” into the negotiating was the clearest sign that countries that had expressed opposition to their use were determined to follow through. Some observers at the talks described the clause as an “anti-Australia” option.
Bill Hare, the chief executive of Climate Analytics in Berlin and a long-time adviser to developing countries at climate talks, said using carryover credits was opposed by three major negotiating blocs – the alliance of small island states, the least developed countries group and the independent alliance of Latin America and the Caribbean – as well as Canada, Switzerland and Norway.
“There [are about] 100 countries supporting this [challenge],” Hare said from Madrid.
The government has said it earned the right to use the credits through previous efforts. Opponents say it could claim access to the credits only because Australia set unambitious targets under the Kyoto protocol, including allowing emissions to increase by up to 8% between 1990 and 2012.
They say using the credits was at odds with the Paris agreement, which committed countries to escalating action that reflected their “highest possible ambition”.
Officials told Senate estimates earlier this year that as far as they were aware Australia was the only country planning to use carryover credits. Several developed countries had explicitly ruled out using them.
Hare said the European Union, South Africa and Papua New Guinea, representing a group known as the coalition of rainforest nations, had not embraced an outright ban in Madrid but supported a time limit on their use.
Some major countries including China, India and Brazil have sided with Australia in opposing the ban, at least in part because as written it would also outlaw using Kyoto protocol-era offsets generated in their countries that can be sold to developed nations in lieu of reducing their own pollution.
Richie Merzian, a former Australian climate negotiator and now climate energy director with the Australia Institute, said it was possible the wording of the text would be altered to ban just carryover credits but not carbon offsets. He said China, India and Brazil were far more influential with developing countries than Australia and had a specific interest that could be catered for without allowing carryover credits.
“Australia has a single issue that could be targeted and that’s always risky,” Merzian said. “It means the minister has to start the week on the defensive.”
Australian officials have indicated the government’s position is that using the credits is non-negotiable. As decisions at UN climate talks are by consensus, Australia could stand alone to block a ban, although it would be expected to face significant pressure if isolated.
Faced with objections from the British high Commission at a meeting with business groups last month, Australian officials said there would need to be a diplomatic solution to the standoff.
Official data shows Australia’s emissions have not come down and several analysts have found it was not on track to meet its Paris target.
But the government released two sets of data over the past 10 days to support the argument that Taylor will make at the conference: that the country has “a track record of which all Australians can be proud”.
The first new report used newly adjusted emissions data to suggest national pollution was flat, and had dipped slightly over the past two years, rather than increasing year-on-year as official greenhouse accounts had previously shown. The second updated projections of how much pollution would be released to 2030 and found, contrary to other evidence, the country was expected to meet its Paris target by using the accounting loophole.
The department projections suggested Australia would exceed its 2020 target (a 5% cut compared with 2000) by 411m tonnes of carbon dioxide. This is 44m tonnes more than a year ago.
As analysts have pointed out, 44m tonnes is about 8% of Australia’s annual pollution. It is equivalent to the annual emissions of Switzerland, or 10 times the emissions of Lesotho.
On Saturday Taylor said the improvement in the projections was primarily a result of the government’s $3.5bn climate solutions package and emissions cuts in the electricity sector. “Our commitment is achievable, balanced and responsible, and is part of coordinated global action to deliver a healthy environment for future generations while keeping our economy strong,” Taylor said.
The projections are based on a range of assumptions, including that renewable energy will provide 50% of Australia’s electricity by 2030. When this amount of clean energy was proposed by Labor before the election, the government suggested it would be reckless and damage the economy.

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What Kenneth Hayne Says About Climate Change - Transcript

AFR - Kenneth Hayne

Learned helplessness and short-termism suit those who still see climate change as a matter of belief or ideology, but the obligations directors have for the good of their companies are very clear.
A director acting in the best interests of the company must take account of, and the board must report publicly on, relevant climate-related risks and issues. David Rowe
Kenneth Hayne
The Hon Kenneth Hayne AC QC was a Justice of the High Court of Australia from 1997 to 2015.
Prior to this, he was appointed as a Justice of the Supreme Court of Victoria in 1992, later serving on the Victorian Court of Appeal until his appointment to the High Court.
In 2002 he was appointed a Companion in the General Division of the Order of Australia for service to the judiciary, to the law and the community in both legal and general education.
On his retirement from the High Court he was appointed as a professorial fellow at the Melbourne Law School, University of Melbourne.
On 14 December 2017, Kenneth Hayne was appointed Royal Commissioner into Misconduct in the Banking, Superannuation and Financial Services Industry.
This is an edited transcript of remarks Kenneth Hayne, QC, made at the Centre for Policy Development’s Business Roundtable on Climate and Sustainability on November 21:

 Previous speakers have emphasised the need for system-wide response. Systemic response is essential. But for the moment, I want to stand the issue on its head and look at it from the individual entity’s point of view.
Three things are clear. First, I think the relevant law is clear. Directors must act in the best interests of the company.
'Best interests' is not one-dimensional – it is not determined only by share price movement or 'total shareholder return' over a period.
'Best interests' does not present a binary choice between the interests of shareholders and the interests of others (whether customers, employees or society more generally).The longer the period of reference, the more the interests of all affected by a company’s actions will converge in pursuit of the long-term financial advantage of the enterprise. Second, international opinion is also clear.
International opinion is now firmly behind the need for all entities with public debt or equity to respond to climate change issues in their governance, their strategy, their risk management and their metrics and targets and, importantly, to record their responses to the issues in their financial reports.
The work of the Bank of England and the Financial Stability Board’s Task Force on Climate-related Financial Disclosures both forms and reflects that opinion.
Third, the position of Australian regulators is clear. ASIC, APRA and the Reserve Bank have all recently made plain the significance each of those bodies attaches to climate-related issues.

Learned helplessness
The inevitable consequence of the three points I have made about the law, international opinion and domestic regulators is that, in Australia, a director acting in the best interests of the company must take account of, and the board must report publicly on, climate-related risks and issues relevant to the entity.
As the 2019 Task Force on Climate-related Financial Disclosures status report shows, the speed at which changes are needed to limit the rise in the global average temperature obliges more companies to consider the potential impact of climate change and disclose their material findings than are now doing so.
The entities and their boards must ask at least two questions:
• What is the potential financial impact of climate-related issues?
• What is now, and what will be, our strategic response?
All this being so, what is the issue?
Political debates (do) not distract from what is clear: directors have a duty to respond to climate-related risks.
Directors have their duties; there are clear statements of what those duties require; regulators have said plainly that they expect the duties to be performed.
What is there left to debate?
I wonder whether there may be two related points to consider – learned helplessness and entrenched short-termism.
The issue, of course, is global. What we are now considering is individual response by entities and by their directors (separately and collectively).
A response often seen in Australian political discourse is that: 'The issue is large; Australia is comparatively small; nothing we do will affect the outcome if the big emitters do not act'.
That is, the response is 'We can do nothing that will help'. By making that response, we are persuading ourselves that we are helpless.
Boards will reinforce that sense of helplessness if they put climate risk into a bucket marked 'non-financial risks'.
Both learned helplessness and short-termism yield a result that fits comfortably with those who still see climate change as a matter of belief or ideology. David Rowe
And boards might think that they can do that if they see the risk as not being immediately realised in the next financial period.
But as recent events in the financial services industry should have shown, the notion of 'non-financial' risks can be very misleading.
The distinction between financial and non-financial risk to the entity is anything but clear.
Conduct and regulatory risk were seen by some financial services entities as
non-financial risks less important than other risks to the financial performance of the entity.
But the realisation of conduct and regulatory risks has had large and continuing effects on, not only the reputation of the entities, but also their profitability.

Short-termism
Helplessness is then coupled with short-termism. At the national level short-termism is expressed as: 'Doing something now will have adverse effects on employment in some part or parts of the country. That would be bad for the national economy. Therefore, we will do nothing.'
Both learned helplessness and short-termism yield a result that fits comfortably with those who still see climate change as a matter of belief or ideology.
Framing the most recent debates provoked by the bushfire emergencies as part of the 'culture wars' reinforces the notion that climate science is a matter of belief, not scientific observation and extrapolation.
No less importantly, because the debate remains framed as a debate about belief, learned helplessness and short-termism can be translated into the nativist-populist terms that now have such currency in many political systems.
But neither helplessness (whether that is learned or real) nor short-termism provides any answer to the director’s duty to act in the best interests of the company.
Indeed, each points plainly towards the need for boards:
• to recognise both the nature and extent of climate-related risks and the speed with which change will have to be made;
• to develop strategic plans in response; and
• to report to shareholders and the wider market about what they have done, are doing and will do in response.
I say that any sense of helplessness points to those results because the choice for a board is between responding or having a response thrust upon the company.
And boards simply cannot confine their attention to the short-term. As I have said, entities which did not look beyond short-term profit have recently suffered very large financial and non-financial losses.
Learned helplessness and short-termism may explain how our political debates are being framed.
If they do, we must be careful that the framing of the political debates does not distract from what is clear: that directors have a duty to respond to climate-related risks and that the continuing work of the  Task Force on Climate-related Financial Disclosures shows directors what they should do.

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(AU) Hayne Rebukes Directors On Climate Risk Failure

AFR - James Fernyhough

The former High Court judge says directors cannot hide behind "learned helplessness" as an excuse not to act, and lashed the "short-termism" of national debate. 
Justice Kenneth Hayne says a sense of helplessness and short-termism is no excuse for inaction on climate risk. AFR
Former High Court judge and royal commissioner Kenneth Hayne has warned directors they have a legal duty to act on climate change risk, include it in corporate strategies and report on it to shareholders, raising the real prospect that boards failing to act could end up in court.
In a private address to business leaders, regulators and government officials hosted by think tank, the Centre for Policy Development, Mr Hayne also took a swipe at the Morrison government, which has come under criticism for its unambitious emissions reduction policies.
He said both "learned helplessness" and "short-termism" yielded "a result that fits comfortably with those who still see climate change as a matter of belief or ideology".
"Framing the most recent debates provoked by the bushfire emergencies as part of the 'culture wars' reinforces the notion that climate science is a matter of belief, not scientific observation and extrapolation," he said.
"No less importantly, because the debate remains framed as a debate about belief, learned helplessness and short-termism can be translated into the nativist-populist terms that now have such currency in many political systems."Mr Hayne said in the remarks released exclusively to The Australian Financial Review, that international expert consensus was now clear that climate change risk was a matter of fact and boards could not hide behind excuses for inaction. "International opinion is now firmly behind the need for all entities with public debt or equity to respond to climate change issues in their governance, their strategy, their risk management and their metrics and targets and, importantly, to record their responses to the issues in their financial reports," Mr Hayne said.
He said the financial regulators – the Australian Securities and Investments Commission, the Australian Prudential Regulation Authority and the Reserve Bank of Australia – were all clear that climate change posed real and measurable financial risks.
"The inevitable consequence [of this consensus] is that, in Australia, a director acting in the best interests of the company must take account of, and the board must report publicly on, climate-related risks and issues relevant to the entity," he said.
He said more companies would need "to consider the potential impact of climate change and disclose their material findings than are now doing so", and dismissed the argument that the magnitude of the problem left directors helpless to act, referring to that position as "learned helplessness".
Mr Hayne's remarks come three years after barristers Noel Hutley, SC, and Sebastian Hartford Davis published a landmark opinion, which argued boards that failed to consider climate change risks could be found liable for breaching their duty of care and diligence.
Mr Hayne's opinion will add new force to the view that boards have clear legal obligations on climate risk.
As commissioner of the 2018 financial services royal commission, his recommendations on the treatment of non-financial risks, particularly cultural risks, have already sparked a radical rethink of directors' responsibility for areas previously considered outside their remit.
Alluding to the findings of the royal commission, Mr Hayne told the CPD roundtable: "As recent events in the financial services industry should have shown, the notion of 'non-financial' risks can be very misleading."
He said companies might take the view that the size and global nature of global warming – which is predominantly caused by the burning of fossil fuels, and the resulting emission of carbon dioxide into the atmosphere – left them helpless to act. But he said this excuse would not stand up under the law.
"A response often seen in Australian political discourse is that 'The issue is large; Australia is comparatively small; nothing we do will affect the outcome if the big emitters do not act.' That is, the response is, 'We can do nothing that will help.'
"By making that response, we are persuading ourselves that we are helpless," Mr Hayne said.
"Helplessness is then coupled with short-termism. At the national level, short-termism is expressed as: 'Doing something now will have adverse effects on employment in some part or parts of the country. That would be bad for the national economy. Therefore, we will do nothing.'"
He said directors must not be distracted by the "framing of the political debates", urging them instead to look at standards set out by the international business-led Task Force on Climate-related Financial Disclosures, which has been endorsed by Australian regulators.
Mr Hayne's remarks were made at a closed roundtable discussion hosted by the Centre for Policy Development late last month in Sydney. Also present were RBA deputy governor Guy Debelle, Bank of England executive director Sarah Breeden, APRA executive board member Geoff Summerhayes, and ASIC commissioner John Price.
Representatives from big business, including ANZ, Macquarie, QBE, AustralianSuper, Coles and UBS, were also present.
Government representatives who attended were from the Department of Environment and Energy, the Department of Prime Minister and Cabinet, and Treasury. Greg Combet, the Labor environment minister who oversaw the Gillard government's short-lived carbon tax, was also present in his capacity as chairman of industry super-owned fund management colossus IFM Investors.
The roundtable concluded: "First, the climate crisis is upon us, and decision-makers across the Australian economy have a clear and increasing obligation to address the risks and opportunities it presents. It is clear climate change is a ratcheting risk, a trend change that is highly interactive, systemic and irreversible, and one which will impact every aspect of Australian society.
"History is no guide to its future impacts, meaning that forward-looking scenario analysis is needed to manage the physical and transition risks it will generate. Australia’s economy and financial system is particularly exposed given the significant physical risks the country faces and its profile as a commodity exporter. Australian business is at increasing risk of retaliatory action from other countries because of a perceived view that Australia is not pulling its weight when it comes to reducing emissions."
The conclusions from the roundtable were prepared by the CPD and are not meant to represent individual policy positions of the participants.

Madrid meeting
The release of Mr Hayne's remarks coincide with the second week of the United Nations COP25 meeting in Madrid, at which government ministers from around the world, including Energy Minister Angus Taylor, will discuss details of the Paris climate agreement including potential carbon trading rules, and the use of Kyoto carryover credits.
The government confirmed on the weekend that it intends to use Kyoto carryover credits – that is, credits from its over-achievement of emissions goals under the Kyoto protocol – to meet its Paris goals. In real terms, that means Australia's emissions by 2030 will be 16 per cent below 2005 levels, not the 26 to 28 per cent below set out in the Paris agreement.
The Paris agreement does not mention the use of Kyoto carryover credits, and many nations are pushing for the practice to be formally banned.

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09/12/2019

Climate Change Now 'The Most Significant Threat' To Australia's Wet Tropics

The Guardian - 
Wet Tropics Management Authority offers grim assessment of impacts on region’s biodiversity and economy
The Wet Tropics Management Authority warns climate change is likely to result in ‘substantial ecological change’ in north Queensland. Photograph: Maria Grazia Casella/Alamy Stock Photo
Climate change is escalating as “the most significant threat” to Australia’s wet tropics world heritage area, with an update to parliament reporting the outlook for the bioregion is a cause of “great concern”.
The grim assessment of the critical north Queensland rainforest region is outlined in an annual snapshot of the protected area prepared by the Wet Tropics Management Authority, which urges greater national and international effort to address the causes of climate change.
The wet tropics world heritage area spans 450km of tropical north Queensland coastline between Cooktown and Townsville and comprises the world’s oldest living rainforests and the largest area of rainforest in Australia.
It also supports the highest level of biodiversity of any region in Australia, being home to 36% of Australia’s mammals, 29% of Australia’s frog species, 60% of Australia’s butterfly species and 50% of Australia’s bird species.
Of over 173,000 protected areas, the Wet Tropics World Heritage Area was rated as the second most ‘irreplaceable’ natural World Heritage Area on earth and the sixth most irreplaceable protected area by a team of international scientists. Although it represents only 0.12% of the total area of the Australian landmass, the Area is home to an exceptionally high proportion of the nation’s biodiversity.
The agency’s two annual reports, one specifically on the state of the world heritage area, both warn that the conservation outlook for the region is deteriorating, with climate change seen as “likely to result in widespread and substantial ecological change”.
“Climate change is escalating as the most significant threat to the wet tropics long-term outlook, including changes to the distribution and density of endemic and specialised cool adapted rainforest species,” the report says.
“Changes to endemic and specialised cool adapted rainforest species distribution and density having already been recorded – and some somber predictions of modelled effects are already being realised.”
The agency reports that after receiving new evidence of the “accelerated decline of unique, endemic wet tropics animals”, such as the lemuroid ringtail possum which is at risk of imminent extinction, the board released a climate impact statement and a 10-point plan for climate adaptation.
“The board’s call is for urgent action and investment to improve resilience and protection to give the area the best chance of withstanding extreme events and climate impacts, pending a reduction in global emissions,” it said.
The snapshot also warns that “more extreme and unplanned bushfires” will occur in the future, posing a significant threat to the old-growth rainforest.
“Although not directly attributable to climate change, our rapidly warming climate, driven by human activities, is exacerbating every risk factor for more frequent and intense bushfires,” the report says.
Other threats reported by the authority include the damage being inflicted by invasive species, with feral pigs, yellow crazy ants, invasive weeds and pathogens such as myrtle rust all having an impact.
Funding cuts are also listed as a threat, with the authority reporting a “significant decline in research and monitoring of the property”.
“Despite previous historical investment in research in the area, research funding has significantly declined over recent years,” the report says.
Under the current National Environmental Science Program (2015-2021) commonwealth research funding investment into wet tropics rainforests was not a priority.
The final threat listed by the agency is the increased demand for infrastructure like roads, dams and energy supply, “caused by a growing urban population and tourist visitor numbers, distributing visitation across a wider area”.
The wet tropics area, which was declared protected in 1988, was also examined in 2017 by the International Union for the Conservation of Nature which carries out regular assessments of the world’s 241 natural world heritage sites.
The 2017 Outlook Report reported that the wet tropics region was under direct threat from “invasive plants, animals and diseases, and the high risk posed by the predicted impacts of climate change”.
The authority is concerned that the threat to the region’s ecology could also threaten the world heritage listing, which would have a knock-on effect to the Queensland economy.
“Climate change is one of the most significant threats to the area and is likely to result in widespread and substantial ecological change,” the report says.
“This change will impact the biodiversity values underpinning the world heritage listing of the area and has the potential to affect the region’s economy.”
A spokesman for environment minister Sussan Ley said the wet tropics was an “incredibly important area and one that receives significant funding.”
“In addition to its annual funding, the government has further invested $9m in crazy ant eradication and the formation of a Tourism Destination Development Plan to enhance opportunities for Indigenous cultural tourism enterprises and grow appropriate eco-tourism.
“We will continue to work with Queensland to protect this very important place.”

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