One of the more popular myths among the conspiratorially minded is that there is a common set of business interests that drives the policy agenda in countries such as Australia. At its crudest, this can mean little more than powerful capitalists bending pliant politicians to their will – generally to the detriment of the rest of us.
The quintessential case in point, perhaps, is the coal industry: it simultaneously threatens our collective well-being because of its massive contribution to both climate change and – especially in China – pollution, but prospers with taxpayer support.
Yet while it is clear that economic power and political influence are invariably linked, the coal industry generates grounds for both hope and despair. A series of recently released reports highlight just how complex and potentially intractable the issues are.
The good news is that business is not monolithic. Some of its most influential leaders now recognise that runaway climate change is the most immediate and tangible threat to security and prosperity that countries like the US and Australia actually face.
While anyone who’s been taking an interest in this debate will find little surprising in Risky Business, what makes it significant is its authors, who include the likes of Michael Bloomberg, Henry Paulson, George Schultz and Robert Rubin – leading figures in the ruling class, if ever there were any.
The point to emphasise is that recognition of the dangers posed by climate change and the need to curb the activities of some of the principal contributors to CO2 emissions – like the coal industry – is not confined to environmentalists.
On the contrary, some of the smartest and most powerful people on the planet increasingly recognise that we are, indeed, all in this together. Their privileged lifestyles will no doubt prove more durable than ours, but ultimately they face the same fate as the rest of us in the absence of mitigation.
What’s less widely recognised is that – especially in this country – we’re all underwriting the profitability of one of the principal sources of the problem. The Australia Institute’s Mining the Age of Entitlement spells out how much support state governments have provided to the mineral sector, primarily in the form of infrastructure. The report estimates that state governments have given more than A$17 billion over a six-year period to the minerals sector.
Such largesse would be noteworthy at any time, but when there is a widespread reluctance to provide support for the manufacturing sector and an ideological aversion to anything that smacks of industry policy it is all the more remarkable.
Even without coal’s contribution to climate change, the folly of investing public funds so heavily in the historically volatile resource sector ought to have given even the most parochial of state premiers pause for thought.
And yet help may be at hand, from an unlikely, but influential source. BHP, for example, is no longer investing in new coal projects. Influential fund mangers are also beginning to re-think their long-term investment strategies. True, this may be driven by concerns about profitability more than concern for the environment, but it may help to shrink the coal industry in ways that state and federal governments seem reluctant to even contemplate.
Indeed, the battle of ideas is a long way from being won. The coal lobby is powerful, effective and knows how to make an argument – even if it is entirely self-serving. The Minerals Council of Australia has added to the pile of recent reports with A Critique of the Coal Divestment Campaign. The report claims:
… the coal industry is under attack from a well-organised, well-financed, and sophisticated network of international environment groups.
The old adage about pots and kettles comes to mind.
In reality, it is estimated that the coal lobby in Australia has spent about $100 million on its recent “Australians for coal” campaign, which looks like a very cost effective investment given the riches showered on coal producers by the governments of Queensland and Western Australia in particular.
Despite the protestations of the coal industry to the contrary, they are clearly capable of mobilising far greater resources and political influence than the environmental lobby – otherwise we would surely have curbed an activity that is increasingly recognised as unsustainable, if not dangerous.
The hope, then, for those of us hoping to actually do something about climate change, at least, is that business may actually prove an unlikely ally. Disinvestment is one powerful mechanism with which to reduce the coal industry in Australia – a country which cannot even claim a vital developmental justification for its use, as the likes of India and China can.
Getting most of the domestic political class to recognise the necessity of thinking about the long-term future of the country, never mind the planet, may be more challenging. Developments in the US suggest that this is not impossible, however, and the debate may finally be decisively shifting.
We must hope that words can be translated into action and that at least some of America’s business elites can show the sort of leadership that seems beyond so many of their political counterparts.