Twin Crises: both Big Ethics Failures

A Tale of Two Crises (Version of Feature Article published in The Herald Thursday 3rd October 2008)

It is interesting to examine the responses, in Australia and in the USA, to the fiscal and climate crises. The fiscal crisis gets urgent attention and with breathtaking speed there appear billions of dollars to save the financial system from meltdown.

The USA, home of private enterprise, nationalises huge financial institutions, taxpayers money is placed at the disposal of money lenders so that the wheels of Capitalism can keep turning. Many argue that each day of delay of a big bailout could bring the system into another global depression. Even in Australia, the Rudd Government has an instant spare $4 billion to help out the liquidity crisis in non-bank home lending markets.

Yet when it comes to the climate crisis we don’t have instant access to funds to save the planet from a global warming meltdown. We also seem to have plenty of time to consider our options despite the pleas from climate scientists about the urgency of the problem. The Garnaut Report has taken over a year to consider the implications of the changing climate.

However, the two crises are inter-related; the credit-driven fiscal crisis is at the heart of the climate crisis. The mass consumption of the USA and other countries such as Australia is driving the climate crisis. The Hunter Valley, with its coal exports to China and India, is a source of the energy that converts coal into the DVD players and cars that we import. The three Cs; credit, consumers and climate are intimately connected.

Indeed, a cynic might argue that the current crisis and the slow-down in consumer spending that will inevitably follow is finally “the recession we had to have”. Only this time the banana republics come out on top because at least you can eat bananas; you cannot eat coal, oil and sub-prime money. The huge reduction in carbon emissions that follow from a global depression just might, the cynic could argue, be the break our climate and environment so desperately needs.

In Australia we remain ‘concerned’ about the climate but the Rudd government is reluctant to move quickly to commit Australia to world-leading action. In the name of ‘economic responsibility’ we are by told by Climate Minister Penny Wong and business leaders that even the Garnaut Report’s suggestion that we commit to a greenhouse gas pollution ceiling of 450 parts per million (ppm) achieved with a 25% reduction by 2020 is “unrealistic”. Yet many leading climate scientists tell us that this target still has a real risk of delivering devastating climate change and huge damage to our economy. To be really safe, we need to be well under that target.

The mechanism offered to achieve reductions in the amount of greenhouse gases being emitted is a cap and trade, market-driven carbon trading system. However, as we have painfully seen with the fiscal failure, it is dangerous to have foundational elements of our economy in unregulated private hands. Market failure leads to total system failure and we cannot afford to have such a failure with our climate.

In addition there are the huge risks involved with the Rudd government’s strong support for carbon capture and storage. With the technology in development mode for at least another decade we already know that it will be energy and capital intensive and that it does not solve the climate crisis … it merely displaces it underground. Again, a huge burden is placed into the hands of future generations who will have to manage the risk of carbon dioxide leakage into the indefinite future.

The Garnaut Report provides us with an excellent summary of our predicament and Garnaut has focussed our attention on what is politically acceptable. This puts pressure on leadership to face up to the nature of the risks involved. Risk assessment is substantially an ethical issue as those who will suffer the worst consequences of us getting it all wrong are the poor, the young and the yet unborn.

So far, the stance of our State and Federal leaders has been ethically bankrupt. The leadership of NSW, addicted to royalties and multipliers, has sold out its values to the fossil fuel market. With a reckless lack of concern about the future they have approved massive expansion of the coal industry in the Hunter.

Kevin Rudd and the federal leadership promised much on climate change but have also delivered little. As was evident in the visit of the cabinet to the Hunter this week, they too are addicted to coal. The constant refrain from national leadership was protection of the coal industry and carbon trading, capture and storage. As with the discredited Howard government, the chorus is all about ‘clean coal’ and adjusting and adapting to climate change ‘reality’.

The more we destroy of the Hunter Valley, the Gloucester Valley and further, fertile places like the Liverpool Plains, the less productive we become. Exploitation of non-renewable resources using non-renewable energy is delivering a fiscal bonanza, but at what real cost? The real reality is, we lose forever productive land, regional ecosystems are polluted, health is compromised and we import climate change in the form of severe drought and heat to our own part of the world.

The Garnaut Report has given us an opportunity to carefully evaluate our options for the future. Great leadership now involves making ethical judgements based on the escalating risks as explained by science. So far, our leaders seem unable to comprehend the severity of the risks and the speed at which they must be addressed.