Climate Flu: Is there finally a cure?

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Climate Flu is inconvenient to governments, corporates and the investor community for two key reasons. But while the symptoms are likely to get worse, there is a cure.

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Flu is a contagious respiratory illness caused by influenza viru

If you imagine climate change as a flu that the world is coming down with, then you could probably say that the physical symptoms are only just starting to be felt. Current climate change-amplified floods, cyclones, coral bleaching and record heat waves are but a slight tickle at the back of Earth’s throat.

And whilst the worst of the symptoms are still decades away, the problem is real, will become increasingly pervasive, and will come to dominate mainstream economic and financial market discourse in coming years and decades.

Indeed, the World Economic Forum (WEF), in recently releasing its 11th Global Risk Report, ranked “failure of climate change mitigation and adaptation” as the world’s most potentially impactful, and the third most likely risk.

And yet, climate change-related risk analysis remains (after all these years) largely disconnected from mainstream discourse on the prosperity of the economy. Equally, interventions to fight the symptoms of ‘Climate Flu’ still touch on a raw nerve for so many today.

And so it’s worth revisiting the question; why such a persistent resistance to these interventions?

One obvious explanation is that as Climate Flu remains relatively asymptomatic it also remains convenient to ignore the progressive onset of its symptoms, even deny its very existence. And this bias towards denialism is reinforced by the fact that Climate Flu has become an incredibly inconvenient problem to deal with.

Specifically, Climate Flu brings into sharp focus how paralysed the global economy currently is, and its utter incapacity to absorb the impacts of – let alone manage its way out of – yet another emerging crisis.

The global economy has been sick in bed for years now, with a number of ‘turn for the worse’ episodes since the last GFC. In response, governments and central bankers have been allocating all of their time, and financial resources, to getting the patient out of bed.

Blame the medication, but after several bed-ridden years the patient is not getting any better.

And so when experts from the climate change world come along and talk about a new impending crisis (Climate Flu), policy makers (sitting by the economy’s bedside) are inclined to respond “That’s nice dear. Come back another time. Surely you can see that we’re busy here?”

This global economic malaise also explains why the corporate sector is struggling to proactively manage growing climate risks. Even while so many corporates are looking green around the gills because of the sick real economy, investors – for want of better yield elsewhere – are continuing to pour wealth into equity markets.

This in turn is further raising share prices, and is only serving to heighten pressure on fluey corporates to deliver good short-term dividends. This short-term pressure to perform and pay dividends in an increasingly challenging global economic environment has left corporates unable to respond effectively to slower-growing and complicated threats like Climate Flu, to their detriment.

Climate Flu is inconvenient to governments, corporates and the investor community for two key reasons. Firstly, because of the unwillingness or incapacity to focus on what is perceived as a longer-term threat to economic growth given there are so many short-term crises to be preoccupied with. The second reason (related to the first) is that the required interventions often come with short-term risks and side-effects to an already fragile economy.

If by ‘intervention’ we were referring to administering an ‘elixir for growth’ to our global economy then there would be calls to administer the drug immediately. Unfortunately though, most of the economic interventions on offer to combat Climate Flu (i.e. ambitious emissions trading schemes, carbon taxes, tariffs etc) come with the following back of packet warning to the economy “Caution! May induce drowsiness”.

That’s why in Australia the previous Labor government administered a range of other stimulant drugs alongside its ‘carbon tax’ (such as direct financial compensation to liable entities and consumers) in order to counteract the effects of drowsiness.

Shortly after, the Abbott Government repealed the carbon tax, considering it a “handbrake on the economy”. It vowed to replace it with the so-called wonder drug ‘Direct Action’. Then minister for the Environment, Greg Hunt stated in a Lateline interview:

direct action on climate change… you can achieve without a carbon tax; without an emissions trading scheme. We want to pursue an incentives-based program rather than a punitive program”.

It was, of course, too good to be true. As Australia’s Clean Energy Regulator confirmed earlier this year, emissions in our economy are rising under Direct Action; that’s despite the Government allocating $2.55 billion of public revenue to incentivising emissions reductions. Abbott’s expensive incentives-only medication, whilst not inducing drowsiness over our economy, was equally totally ineffective at reducing emissions.

The reality for any government hoping to effectively fight the symptoms of Climate Flu (without crashing the economy) is that interventions must be administered as a comprehensive, complex and carefully balanced cocktail of drugs. The cocktail must include both sedatives to put the old emissions-intensive economy to sleep, and stimulants to awaken the new low-emissions economy. The stimulants should include finance, limited compensation and other incentives mechanisms so that the economic transition can take place efficiently, and in the most equitable way for affected communities.

In 2017 the Government will undertake a formal review of its Direct Action policy framework. Given the current failings, it will be tasked with ‘having another go’ and reengineering a more complex cocktail of drugs that this time will actually reduce emissions whilst also safeguarding the health of the economy. This formidable task will be complicated even further by the current fiscal situation, and the Government’s commitment to finding savings to reduce public debt.

Given the current predicament, one might conclude that the task is beyond the Government. And yet if the Government genuinely wants to fight Climate Flu and at the same time stimulate the economy and reduce debt, then it should be thrilled to hear of some promising results from a little-known herbal drug.

It’s been around for donkey’s years but rarely grows in Australia. Don’t ask me what it’s marketed as, but its binomial name is bipartisan politicus.

Bipartisan politicus apparently acts to simultaneously reduce debt and stimulate the economy by attacking waste and dysfunction created in toxic political environments (think Australia’s energy market). It also prevents ‘pop-up’ government schemes and programs from being designed and implemented – only then to be binned, thereby saving the Government countless more millions.

The herb also acts to stimulate the economy over the longer-term by creating a stable investment environment for businesses. With sophisticated Government support, these much needed investments can then be channelled into supporting the growth of a dynamic, innovative, and globally-competitive low emissions economy.

Whoever said that herbal remedies couldn’t help fight a flu? it’s worth a shot anyway…

Evan Stamatiou is Director of Carbon Risk Management.

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17 Comments
  1. David Smith 3 years ago

    Of course Evan’s going to come out with this alarmism as his job depends on it. As a director of “Carbon Risk Management” he’s just one member of Big Carbon who is cashing-in on the CAGW hysteria.

    As for “sophisticated Government support”, that’s just code for tax-payers’ money being used to create a fake market. If people really needed something they’d pay for it voluntarily – that’s how the free market works.

    I want my taxes spent on heath, education, and defence. I don’t want them wasted on pointless green schemes that justify their existence by promoting a dodgy scientific hypothesis that has yet to produce any empirical proof (and no, a couple of storms and some dried river beds are not proof of CAGW. They are just products of a climate that has been changing since the year zero).

    • Chris Fraser 3 years ago

      Pricing carbon is economically very sound. Similar to the way speeding tickets are handed out to careless drivers as a part of keeping our roads safe – roads that we have to share – pricing carbon will help keep our climate safe. Evan said that emissions are rising under Direct Action so maybe you prefer your tax dollars to be wasted on a task that government intervention can’t handle.

      • Ren Stimpy 3 years ago

        Agree. Pricing carbon is also much like toll roads.

        There are people who live in regional and rural NSW who rarely go to Sydney, so why should they have to pay – via their income taxes and GST – for Sydney city bypass roads? The people living in Sydney who use those bypasses every day should pay proportionately to the use they make of them, via toll road charges. This is accepted Liberal government policy.

        OK, so now the people who fill their roofs with solar panels and add battery storage to their premises, and the people who opt for clean green energy on their power bills, reducing their emissions voluntarily – why should they have to pay twice, via their income taxes, to reduce the nation’s emissions? It’s exactly the same situation as the toll roads – the people who don’t contribute to emissions should be exempt from paying taxes which go to reducing national emissions. Direct Action – where EVERYBODY is taxed to reduce emissions – is the antithesis of the Liberal mindset. It eliminates incentive.

        A carbon tax – where only the people who produce carbon emissions are taxed to reduce carbon emissions – is much more in line with common sense.

        • David Smith 3 years ago

          There is no common sense whatsoever in taxing people for a problem that doesn’t exist.
          The climate changes. Always has and always will. If we all stopped emitting “carbom” right now (just 3% of the 0.04% of the atmosphere that is comprised of CO2) such a miniscule change would make not one iota of difference. You might as well flush your money down the toilet for all the difference it would make.

          • Ren Stimpy 3 years ago

            I would urge you to look at the government’s policy – a 26-28% reduction in carbon emissions on 2005 levels by 2030. Clearly the problem does exist. Perhaps in your own opinion it doesn’t exist, but this is a democracy and your individual opinion is beside the point. The point is we WILL reduce carbon emissions by 26-28% on 2005 levels by 2030.

            The question is who will pay for these emission reductions? Will the people who are already paying for their own emission reductions have to pay double through their income taxes? Or will the slackers, loafers, maximisers and non-believers in this great democracy of ours be mandated to contribute to GHG reductions in the same proportion that they contribution to GHG emissions?

          • David Smith 3 years ago

            ” 26-28% reduction in carbon emissions on 2005 levels by 2030. ” Yep, unbelievably stupid idea that would be economically crippling. It’ll never happen – I think you’re talking about the US and it’s just empty rhetoric.
            Here in the UK we have the Climate Change Act that legally compells us to reduce GHGs – it’s a monumentally stupid piece of legislation pushed through parliament by the useless Ed Milliband.

            BTW A govt administration promising to reduce emissions does not constitute proof of CAGW. You need to study-up on the scientific method

          • bill 3 years ago

            Blah, blah, blah.. Whatever dude.. You’re an idiot..

          • David Smith 3 years ago

            Wow, what else can I say to that?
            You’ve won the debate hands down with you erudite reply!

          • David Smith 3 years ago

            The West making feel-good efforts to reduce their GHG emissions is a complete waste of time. Any reduction that is made will be completely swamped by the increase produced by the rapidly industrialising China and India.
            China made some vague promises to not increase their level of emissions just to string along the green goons at the Paris climate love-in

      • David Smith 3 years ago

        You’re assuming that our “carbon” emissions have some kind of measurable influence on the world’s climate.
        They don’t (and no one has empirically proven that they do). Therefore, wasting public or private money on a non-problem would be laughable if it wasn’t such a tragic waste of resources.
        Your use of the phrase “keep our climate safe” implies that you think we have control over the chaotic system that is our climate. We don’t have any control over the climate and it is arrogance of the highest order to think we do.

        • Chris Fraser 3 years ago

          Considered over geological time, earth’s climate was at times very difficult for all but a few hardy species. Humans would not have been one of them. All the more important they consider their own anthropogenic impact. People are not going to be capable of engineering their way out of this one – they will have to firstly understand environmental systems and then cooperate with them.There’s no argument we should have spending on health and education. That investment will return itself several times over in social well-being and security. Reducing atmospheric carbon to lower levels enhances and extends the value of that investment by mollifying the damage wrought by climate change.

          • David Smith 3 years ago

            ” they will have to firstly understand environmental systems and then cooperate with them.”
            We understand that the Earth’s climate is chaotic and we cannot control it. Assuming CO2 levels are some kind of control knob is just naive. We cannot predict what the climate is going to do in the long term – it will get warmer and it will get colder We will adapt as we are a resourceful animal.

          • Chris Fraser 3 years ago

            It is quite true human activity influences climate. Climate change accepters have already been provided the empirical evidence from the recognised expert scientific groups. Only human activity can quickly extract ancient fossilised sources of carbon that were slowly sequestered over very long periods of time. Humans can control their emissions of that, just as they can manage various uses of the land, how they farm, or allow sediment transport or pollutant into the oceans. People can control and conserve environment and climate regimes they create. They would also be wise to recognise historic climate regimes that permitted their species, and plants, to evolve and thrive.

          • David Smith 3 years ago

            ” been provided the empirical evidence from the recognised expert scientific groups. ”
            No they haven’t. If you can find empirical proof of CAGW you’ll be first in line for a Nobel

          • Chris Fraser 3 years ago

            I assure you there’s no need to award Nobels for things that have already been discovered. Anthropogenic climate change has already been established not just through empirical observation but also theoretically and logically. There have been numerous examples of results in Australia which have no historic precedent whatsoever in El Niño or any natural cycle.Humans have had huge impact. It’s not necessarily because there are 9 billion individuals creating the impact, but because on average humans have the largest ecological footprint of any species. Humans need to again find balance.

          • Chris Fraser 3 years ago

            This happens. These climate contrarian fellow travellers disengage and I’m left talking to passers-by.All of Earth’s changes in climate have been explained. We already have an astronomic and geological record of some 4 billion years. Human impact is but a mere blip in the record let alone their last 300 years of most impact. The contrarian confusion stems from not understanding anthropogenic impact is only a small subset – although perhaps a rather acute one – of broader natural, anticipated and very long-lasting systems. Conscious human decisions, for worse and for better (eg Montreal Protocol) have caused changes in our lifetime. And they will determine the good standard of living of your descendants. There’s no good reason to just give up if you’re not under influence of some malignant political force.

          • David Smith 3 years ago

            ” All of Earth’s changes in climate have been explained. ”
            Er, no they haven’t. You need to brush up on your science.

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