Scorcher: The Dirty Politics of Climate Change

By Clive Hamilton

This is the book that blows the whistle on the politics of global warming in Australia. Why have our political leaders been so slow to act? How have big corporations succeeded in preventing real action? Who are the "greenhouse mafia"?

In Scorcher, Clive Hamilton reveals a shadow world of lobbyists and sceptics, spin and hidden agendas. He investigates a deceitful government and a compliant media. And he lays out the facts about Kyoto, carbon emissions and what governments and individuals might do, and have done.

Written with humour, urgency and great authority, this is the definitive account of the politics of climate change in Australia.

Longlisted, 2007 Walkley Non-Fiction Book Award

Clive Hamilton is the executive director of the Australia Institute and a leading authority on the economics and politics of climate change. His books include the bestsellers Scorcher, Growth Fetish, Affluenza (as co-author), What's Left? (Quarterly Essay 21) and Silencing Dissent (as co-editor and contributor).

• Language: English
• Publisher: Black Inc. Books
• Release date: Apr 19, 2007
• ISBN: 9781921825590

Clive Hamilton

Clive Hamilton is the executive director of the Australia Institute and a leading authority on the economics and politics of climate change. His books include the bestsellers Scorcher, Growth Fetish, Affluenza (as co-author), What's Left? (Quarterly Essay 21) and Silencing Dissent (as co-editor and contributor).

Book preview

BARTON

SCORCHER

THE DIRTY POLITICS OF CLIMATE CHANGE

CLIVE HAMILTON

WITH RESEARCH ASSISTANCE FROM

CHRISTIAN DOWNIE

Published by Black Inc. Agenda,

an imprint of Schwartz Publishing Pty

Ltd Level 5, 289 Flinders Lane

Melbourne Victoria 3000 Australia

email: [e-mail]

http://www.blackincbooks.com

© Clive Hamilton, 2007

ALL RIGHTS RESERVED

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form by any means electronic, mechanical, photocopying, recording or otherwise without the prior consent of the publishers.

National Library of Australia Cataloguing-in-Publication entry:

Hamilton, Clive.

Scorcher : the dirty politics of climate change.

1st ed.

ISBN 9780977594900.

1. Climatic changes - Australia. 2. Climatic changes - Political aspects - Australia. 3. Greenhouse gases - Environmental aspects.

I. Title.

363.73874

Book design: Thomas Deverall

Index by Garry Cousins

Printed in Australia by McPherson’s Printing Group

CONTENTS

Acknowledgments

1. THE GREENHOUSE MAFIA

2. FRAMING THE DEBATE

3. AUSTRALIA’S EMISSIONS

4. BOLD DECLARATIONS

5. THE ROAD TO KYOTO

6. DRAMA AT KYOTO

7. VICTORIES AND DEFEATS

8. AUSTRALIA: AFTER KYOTO

9. BUSINESS REALIGNMENTS

10. THE DENIALISTS

11. THE BATTLE FOR PUBLIC OPINION

12. COMICALIAN

13. NEW GLOBAL MOMENTUM

14. THE TURNING TIDE

15. SABOTAGING THE FUTURE?

Notes

List of Abbreviations

ACKNOWLEDGMENTS

Many people have contributed to this book in one way or another. Christian Downie has provided superb research assistance, which has made the task much easier and improved the final product considerably.

I am especially grateful to five people, each with expertise in aspects of the climate change debate, who read and commented on the entire manuscript: Peter Christoff, Andrew Macintosh, Barry Naughten, Hugh Saddler and Tony Weir. It is a much better book as a result of their comments.

Over the years I have written a number of papers with other authors. Some of the thoughts and materials developed in those collaborations have found their way into this book. In this context I would like to express my gratitude to Richard Denniss, Mark Diesendorf, Paul Pollard, John Quiggin, Justin Sherard, Alan Tate, Lins Vellen and George Wilkenfeld. Hal Turton in particular has written a number of papers with me or for the Australia Institute that have been of great benefit, as the text will show.

Perhaps my greatest intellectual debt is to Hugh Saddler, who has been a constant source of insight and good sense.

None of those mentioned above should be held responsible for anything that appears in the published version.

While I have referenced assiduously the various claims in this book, in some cases information has been communicated to me informally by officials, former officials or business-people who may suffer if their names are revealed.

Over the years a number of other people have contributed substantially to my understanding of aspects of climate change in ways that have influenced this book. They include Bob Burton, Bill Hare, Catherine Fitzpatrick, Don Henry, Erwin Jackson, David Karoly, Graeme Pearman, Barrie Pittock, Tony McMichael and Cathy Zoi.

Finally I would like to thank Robert Manne, who suggested the project and provided advice, and Chris Feik at Black Inc. for his excellent editorial advice and support.

1. THE GREENHOUSE MAFIA

THE POLICY FIX

The inner workings of how climate change policy is actually decided in Canberra under the Howard Government were exposed by the ABC’s Four Corners program in February 2006. We learned that for a decade the Government’s policies have been determined by a cabal of powerful fossil-fuel lobbyists representing the very corporations whose commercial interests would be most affected by any move to reduce Australia’s greenhouse gas emissions. In democratic societies, governments are supposed to represent the interests of the people. As will become clear, in the case of greenhouse policy the Howard Government represents the interests of a small but powerful group of corporations.

The story has been uncovered by the author of a doctoral dissertation completed in 2005 at the Australian National University. Guy Pearse, a member of the Liberal Party and a former adviser to Senator Robert Hill when he was environment minister, managed to coax the leading members of the fossil-fuel lobby into frank admissions about how they go about their business.¹ It emerges that climate change policy in Canberra has for years been determined by a small group of lobbyists who happily describe themselves as the ‘greenhouse mafia’. This cabal consists of the executive directors of a handful of industry associations in the coal, oil, cement, aluminium, mining and electricity industries. Almost all of these industry lobbyists have been plucked from the senior ranks of the Australian Public Service, where they wrote briefs and Cabinet submissions and advised ministers on energy policy. The revolving door between the bureaucracy and industry lobby groups has given the fossil-fuel industries unparalleled insight into the policy process and networks throughout Government.

The members of the greenhouse mafia claim to be more familiar with greenhouse policy than the Government, because they are the ones who wrote it. As one bragged: ‘We know more about energy policy than the government does … We know where every skeleton in the closet is – most of them we buried’.² One insider said that at meetings of the greenhouse mafia some of the ex-bureaucrats made ‘Freudian slips’ and talked as if they were still senior public servants in the industry and resources department.

Several members of the mafia have rotated from one industry lobby group to another within the greenhouse network. Due to the closeness of the personal and political connections within the network, the greenhouse mafia is the most potent lobbying alliance in Australia. Most of its members have been operating in Canberra for two decades, making their way up the bureaucratic ladder under Labor and Coalition governments. For example, Barry Jones was a senior official in the industry department before jumping ship first to head up the Pulp and Paper Manufacturers Federation and then the Australian Petroleum Production and Exploration Association (APPEA).³ Dick Wells spent years in the bureaucracy before going on to join, then head, APPEA and the Minerals Council of Australia. The successive heads of the Australian Aluminium Council, perhaps the most powerful of the industry lobby groups, were David Coutts then Ron Knapp, both of whom had held senior positions in the federal public service. Knapp also spent time in London as head of the World Coal Institute.

In addition to these, the core membership of the mafia includes: John Tilley, who left the federal industry department to head the Cement Industry Federation and the Australian Institute of Petroleum; Mark O’Neill, a senior adviser to prime minister Paul Keating who went on to head the Australian Coal Association (ACA); Mike Hitchens, who left the industry department to join ACIL Consulting and to represent the ACA;† John Daley, head of the coal branch of the industry department before becoming a director of ACIL, where he represented the coal industry at various meetings before being appointed to head the Australian Industry Greenhouse Network; and Keith Orchison, the only member not to have come from the federal bureaucracy, who after working for APPEA went on to head the Electricity Supply Association of Australia.⁴ One insider laid it out like this:

What is different about the carbon lobby to any other lobby in the country? First, it is cross-industry … it is incredibly well plugged into government, and it is basically driven by a group of people who have a common background … There was a group of people who knew each other, who knew how people thought, who analysed in the same way, who had a fundamental understanding of the policy process, who had all been taught by Peter Walsh and Gareth Evans how to be a bastard in the game.⁵

After conducting hours of interviews, Pearse concluded that the greenhouse mafia is absolutely committed to defeating the environment movement on climate change. Emboldened by their success, ‘they pursue the greenhouse agenda with an almost religious zeal’, he wrote. According to the insider quoted above, the big early win that set the mafia on their victorious path through Government and the bureaucracy was when they combined in 1996 and 1997 to derail attempts by Phillip Toyne to promote a carbon tax.⁶Toyne was appointed by the Keating Government as deputy secretary of the environment department after a successful period as executive director of the Australian Conservation Foundation.

It was not just the environment groups that felt the power of the greenhouse mafia. Other industry groups that had a stake in measures to reduce greenhouse gas emissions - like the gas industry, the tourism industry and the insurance companies - were intimidated and went ‘missing in action’ for years. In bodies such as the Business Council of Australia, the hard-heads from the mining, coal and aluminium companies insisted that greenhouse was their issue and others should stay out. Pearse concluded that ‘the intimidation or scarecrow effect of the greenhouse mafia has been central to the missing-in-action phenomenon’.⁷ Nor was it only the greenhouse mafia (who at times also refer to themselves as ‘the Society for Egomaniacs’) who would give grief to any business that did not toe the line; so would the Government itself. When one senior businessman was asked why his corporation was unwilling to publicly urge the Government to ratify the Kyoto Protocol, he said that ministers made decisions affecting his company’s commercial interests every week and he did not want to see the decisions start to favour his competitors.⁸

The Howard Government has allowed the greenhouse mafia extraordinary influence over Australia’s stance on climate change. Alone among the nations of the developed world, Australia has included key members of fossil-fuel lobby groups in its official delegation to negotiate the Kyoto Protocol. Even the Bush Administration does not permit this unseemly arrangement, relegating fossil-fuel lobbyists to the gallery with the other NGOs rather than having them at the conference table. Said an insider: ‘They are part of the [Government’s] team. It is probably the best cross-industry alliance – the most successful … of any one that has been put together … We all write the same way, we all think the same way, we all worked for the same set of ministers’.⁹

Green groups have been no match for such a potent opponent when it comes to crucial policy decisions. This is when the inside knowledge and connections of the greenhouse mafia really make a difference, and when the democratic process is overruled. Cabinet deliberations, ministerial committees and preparation of Cabinet submissions are meant to be confidential and beyond the reach of lobbyists; indeed, the unauthorised disclosure of Cabinet-in-confidence materials is a crime. Yet Pearse’s research reveals that the greenhouse mafia has unrivalled access to internal Government processes. Members of the greenhouse mafia even admit to being called in to Government departments to vet and help write Cabinet submissions and ministerial briefings, referring to ‘mutual trust’ between the lobbyists and the public servants (whose seats the lobbyists once warmed).¹⁰ They have used this access to help public servants in the industry and resources department write submissions designed to counter proposals coming to Cabinet from the Australian Greenhouse Office through the environment minister. One of the most insightful industry insiders interviewed by Pearse made the following comments:

I used to read the cabinet papers, you know, I know what was going on. And it was a question of using those ‘ins’ carefully and protecting sources, and you never go public on it. It is about fixing the outcomes. But at times there are some quite critical political games going on in there – power games, information games … [Environment minister] Robert Hill was sending letters to the Prime Minister trying to say that certain actions that he was about to take were consistent with previous cabinet decisions and so on, and the Prime Minister is about to go overseas and we get wind of it – we get a copy of the bloody letter, and then show it to Anderson [National Party leader and deputy prime minister] and other people on the ministerial committee who Robert hadn’t bothered to copy in. And then, you know uproar breaks out because what Hill was trying to do was to slide it by the Prime Minister … Robert Hill had a lot of trust with the Prime Minister after 1997 [the Kyoto conference], but then he started to over-play his hand and in the end he lost the trust of the ministerial committee and the backbench because he was seen to be arguing his own book.¹¹

In this way the process of government is corrupted.

The greenhouse mafia has direct access to the Prime Minister. Said one: ‘there’s this arrangement where senior business people can ring Howard direct’. The resources company Woodside’s huge investment in the North West Shelf had given its boss John Ake–hurst ‘enormous influence over Howard’.¹² One celebrated incident at a meeting of the Minerals Council of Australia involved David Buckingham, a former senior bureaucrat in the environment department who became the executive director of the Business Council of Australia (BCA). Under the influence of Hugh Morgan and a handful of powerful mining and aluminium companies, the BCA took a strongly anti-Kyoto view that Buckingham wanted to soften. In arguing his case, Buckingham reportedly said that he had it from ‘the highest levels of government’ that industry ought to take a certain view. At that point Dick Wells, the executive officer of the Minerals Council, excused himself, left the room and, it’s claimed, rang Arthur Sinodinos (Prime Minister Howard’s then chief of staff). As one insider explained:

So Dick calls Arthur – and he said, ‘Arthur, Buckingham is sitting in a room next to me in my office here telling us that the government wants us to do this, this, and this. And he is talking like it is coming from you’. And Arthur says, ‘Well, it has not come from me, and we do not want you to do it’. And so Dick walked back in and said, ‘Look, sorry David – I just talked to Arthur Sinodinos and he disagrees completely with what you just said’. It was that sort of game.¹³

If early intervention failed and a proposal to tackle greenhouse gas emissions managed to get to Cabinet – such as occasionally happened when Robert Hill thought he could get something up – the mafia would turn to its closest friends in Cabinet to knock it off. Said one: ‘if we wanted to put a spoke in the wheel of Robert Hill or whatever, we could do it pretty quickly … we reverse-managed that ministerial [greenhouse] committee so many times’.

When the inner workings of the greenhouse mafia and its influence on the Howard Government were exposed on Four Corners, the main players were indignant. Within hours, the coal lobby ‘resolutely denied’ obtaining undue access to Government decision-making processes. The executive director of the Australian Coal Association, Mark O’Neill (a prominent member of the mafia), attacked the program as a ‘new low-water mark in shoddy, biased journalism’ and denied they had been given any untoward privileges. 14 Pearse was dismissed as a ‘self-styled whistle-blower with declared political ambitions’. The Murdoch press’s most rabid commentator, Andrew Bolt, presented the Government’s response, writing that the claims were mere hearsay and, besides, had been denied by the Coal Association.¹⁵ In fact, he wrote, the ‘real’ greenhouse mafia comprises environmentalists and their mates in the media, and he went on to try to undermine the credibility of Guy Pearse. The Opposition and the Greens called for an inquiry, a call that fell on deaf ears.

Pearse’s findings are consistent with other glimpses into the cynical world of Australian greenhouse politics, including a leaked set of notes from a high-level secret meeting. On 6 May 2004 the Prime Minister convened a meeting of LETAG, the Lower Emissions Technology Advisory Group, which consists of the CEOs of the major fossil-fuel corporations. The companies around the table were Rio Tinto, Edison Mission Energy, BHP-Billiton, Alcoa, Energex, Origin Energy, Boral and Orica. These are the companies behind the lobby groups that make up the greenhouse mafia. Meetings like these are never publicised, but we know about this one because private notes made by Sam Walsh, chief executive of Rio Tinto’s iron ore division, were leaked. The notes, which came to light a year or so after the meeting, provide another extraordinary insight into how climate change policy is really made under the Howard Government.¹⁶

The industry minister Ian Macfarlane stressed the need for absolute confidentiality, saying that if the renewable energy industry knew they were meeting, ‘there would be a huge outcry’. He chided the fossil-fuel companies for being insufficiently vocal, allowing the renewables industry to set the agenda, which had ‘got away from us’. Here ‘us’ meant the alliance between the Government and the polluting companies.

The Prime Minister told the highly select group that his Government was in political trouble over greenhouse policy, as it was being outmanoeuvred by the NSW government and by the Labor Opposition led by Mark Latham, who was benefiting politically from his promise to ratify the Kyoto Protocol and support the renewable energy industries. There was an election coming up, he said, and the media, especially The Sydney Morning Herald, ‘had created a problem for Government’, so he had called the meeting to get some ideas about how the Government could beef up its greenhouse credentials in a way that would convince the Herald it was serious about climate change.

The Prime Minister also said he was worried about the Tambling Review of the Mandatory Renewable Energy Target (MRET), which had cautiously recommended extending a renewable energy investment scheme. Minister Macfarlane said that the review had ‘found that the scheme worked too well and investment in renewables was running ahead of the original planning’. The Government was looking for an alternative so that it could kill off MRET, which, they believed, was ‘skewed to Wind Power’. According to the leaked notes, the Prime Minister said that ‘it was not credible to ignore the Tambling Report unactioned [it was tabled in January] and there was a real need to propose alternatives to extending MRET’. He said that he was ‘keen to protect Industry’, by which, of course, he meant the fossil fuel–based industries, at the expense of the renewable and energy efficiency industries. The renewable sector had boomed briefly in response to MRET.

The Prime Minister proposed a Low Emission Technology Demonstration Fund to support technological developments, with $1.5 billion to be funded jointly by Government and industry. Most of the corporate heads responded to this proposal by arguing that it would be much better, Prime Minister, if all of the money came from Government. They issued the usual warnings about companies shifting offshore if any carbon levy were to be imposed.

The meeting notes provide a remarkable insight into the uncanny ability of major corporates to sniff out a pot of taxpayer funds. The CEOs all fully supported the Government’s proposal to starve the renewables industry and obtain large sums of taxpayers’ money for themselves. When the dollar signs fell from their eyes, they remembered to commend the proposal. Presumably speaking with a straight face, Wayne Osborn of Alcoa praised ‘the Government’s leadership in the Greenhouse debate’. The ‘proposal makes sense’, declared Bob Driscoll of Edison Mission, and Rio Tinto’s Sam Walsh reassured the minister that they all ‘understood the confidentiality issue’.

In the tight little world of greenhouse lobbying, the Prime Minister saw nothing improper in going to the country’s biggest greenhouse polluters to ask them what the Government should do about greenhouse policy, without extending the same opportunity to other industries, not to mention environment groups and independent experts.

Just how closely the Government and the corporations collaborate was revealed in an email dated 4 June 2004 (a month after the LETAG meeting) from the head of government relations at Rio Tinto to the heads of the major fossil-fuel polluters. It detailed how industry representatives should respond to the forthcoming energy statement by the Prime Minister. The email outlined the still-secret policy and rehearsed the lines that spokespersons should use in the media, including ‘key messages’ such as ‘the program is a strongly positive step forward’ and ‘industry believes the joint industry– Government program is a win-win approach’. The email finished by setting out the dates for the pre-announcement by the Prime Minister and the formal announcement in his National Press Club speech and reminded recipients that private briefings would be provided.

It is hard to avoid the impression that these captains of the polluting industries are in cahoots with the Government to pull the wool over the eyes of Australians. That impression is strengthened by the fact that the email from the head of government relations at Rio Tinto was signed by Lyall Howard, the Prime Minister’s nephew.¹⁷

SKEWING THE DEBATE

For several years the Howard Government has worked diligently to control public debate over greenhouse, including making extensive efforts to deny the existence, or the seriousness, of climate change. This has included attempts to politicise scientific research. The increasingly Orwellian approach of the Government was highlighted by revelations in February 2006 that, under pressure from the Government, the CSIRO had gagged some of its scientists from speaking about climate change. The principal whistle-blower was Dr Graeme Pearman, for years the head of the CSIRO Division of Atmospheric Research and one of the world’s most eminent experts on greenhouse science. Pearman stated that he was told by CSIRO management at least half-a-dozen times not to speak about the need to reduce greenhouse gas emissions. He said on the ABC’s Four Corners program: ‘As far as I can see, the CSIRO was enormously frightened of the idea that anyone in Government might interpret a piece of information that I was communicating from the basis of scientific knowledge as being critical of Government policy’.¹⁸

Pearman’s contract was not renewed despite his desire to continue and his formidable reputation as a scientist. In effect, he was sacked. Another CSIRO scientist, Dr Barrie Pittock, said he was asked to remove a section from a book he was writing on how rising sea levels could lead to millions of people being displaced in Asia and the Pacific, resulting in a potential refugee problem. Another scientist interviewed by Four Corners, still employed by the organisation, said he had never been asked by his superiors not to talk about scientific issues. But when asked about the problem of environmental refugees, he said five times that he could not comment, ‘not on camera’. As we will see, the Government’s extraordinary sensitivity to the prospect of environmental refugees arriving on our shores helps to explain its tactics when the issue has arisen.

University scientists around the country have been made aware that criticism of the Government jeopardises research funding.¹⁹ Renewable energy researchers, some of whom still receive federal funds despite severe cuts, have been silenced. According to Philip Jennings,