Abbott’s mooted banking advisor questions integrity of climate scientists

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The man tipped to lead a federal review of the $5trn financial services industry says the climate problem is ‘severely overstated’.

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David Murray, the man tipped to be chosen by the Tony Abbott government to lead its review of the $5 trillion Australian financial services industry, has again dismissed the threat of climate change, and suggested climate scientists had no integrity.

In an interview on ABC TV’s Lateline Program on Wednesday, Murray – a former CEO of the Commonwealth bank of Australia, and former head of the $90 billion Future Fund – said the climate problem is “severely overstated.”

Asked what it would take to change is mind about the climate science, particularly in light of the recent IPCC 5th assessment report, Murray replied: “When I see some evidence of integrity amongst the scientists themselves.”

He said if he were in a leadership role, he would “set up some scientific approach to get a community consensus here about what is the truth on this matter.” This is despite the fact that every major scientific institution around the world, including the CSIRO, the Bureau of Meteorology, Australia’s chief scientist Ian Chubb, and the recently disbanded Climate Commission, accepts the science of climate change.

The Abbott government also supposedly accepts climate science, even it describes the link between climate change and actual events, such as bush-fires as “complete hogwash“. Murray is yet another key business appointee that is openly hostile to scientific evidence.

Tony Abbott’s chief business advisor, Maurice Newman, the former chairman of the ABC and the ASX, last month launched an attack against the CSIRO, the weather bureau and the “myth” of anthropological climate change.

Tony Shepherd, the man chosen to lead an “audit” of government expenditure, is also chair of the Business Council of Australia, which has thrown its weight behind the government’s move to repeal the carbon price.

This is despite its stated position being that emissions should be reduced at the “lowest possible price. That puts its new policy at odds with the conclusions of the Climate Change Authority and nearly every economist about the cost of Direct Action or not having a carbon price, and the BCA’s previous support for such a mechanism.

Murray’s likely appointment to head the first full scale review of the financial system in 17 years is problematic given his stance on climate change. The financial services industry is probably the most exposed to risk created by a changing climate, changing policy, and the likelihood of stranded assets as the world accelerates towards a low carbon economy.

A growing number of actuaries, advisors and investor groups are raising concerns that banks and funds managers are “flying blind” on climate risk because they are effectively ignoring the issue.

They argue that systemic reviews, be they in finance or resources of manufacturing, need rigorous attention to how the world is changing. Denying climate change is the wrong way to start.

“If the review does not consider climate change, it risks being redundant before the report is released,” said Nathan Fabian, the head of the Australian-based Investor Group on Climate Change.

The question now being put to industry leaders is how prudent is it to leave out an assessment of the financial risks from climate change?

But this is what Murray said on managing climate risk in the Lateline interview: “My view is that when faced with a potential risk, you manage it by looking at the size of the risk and the probability of it occurring.

“If you’re not sure on either of those fronts, then you look to measures you can take that would help you in any event, whether it occurs or not, but also if it does occur, ameliorate some of the risk. Now the way to deal with that was not to implement a carbon tax.”

Well, certainly not if your estimate is that there is no risk in the first place.

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7 Comments
  1. Keith 6 years ago

    The elephant in the room has to be George Pell….David Murray is a St Aloysius old boy.
    It’s pretty serious when key figures in running the country are living in the middle ages.

  2. Jason 6 years ago

    RAGE!!! ahhhhhhhhhhhhhhhhhhhhhhhhh!!!! there is nothing rational left to say to these morons … and they are running this country?

  3. Jennifer Gow 6 years ago

    This just goes to illustrate why “merchant banker” has become a piece of rhyming slang.

  4. sunoba 6 years ago

    Brilliant piece Giles! I encourage you to keep chipping away at these themes. It’s really important to have a good trail of articles showing the perilous pathway being adopted by those currently in power. A day of reckoning for them will come!

  5. Lifeboatman 6 years ago

    I would rather put my trust in the integrity of the Scientific Community any day as compared with the Financiers. After all, it was the lack of integrity in the American banking system that brought about the Global Financial Crisis.

  6. suthnsun 6 years ago

    +1 to sunoba, Jennifer Gow, Lifeboatman, Jason, Keith
    many years ago I respected David Murray, sigh, sob…

  7. Terry J Wall 6 years ago

    Are we really interested? We must not forget that with a couple of exceptions, no financial adviser, global credit rating company, central banker, elected leader, commercial banker or fund manager correctly anticipate the GFC,

    It is truly astonishing as to how efficiently greed will kill off common sense. It seems to provide an instant lobotomy.

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