Beyond Zero speaks to Guy Pearse author of Quarry Vision and High And Dry

On the community show this week Beyond Zero Talks to Guy Pearse about his essay, Quarry Vision, hot off the press, published in the current edition of the Quarterly Essay.  Guy Pearse, also author of the book High and Dry, was a former staffer for Senator Hill and whistle blower on the Australian Industry Greenhouse Network, otherwise known as the Greenhouse Mafia.  We also discuss the Maldives' new direction in going Carbon Neutral by generating all their power from 155 wind turbines and half a kilometre of solar panels backed up by coconut shell biofuels.   They're also shifting their transport sector to zero carbon over 10 years. Predictions on the arctic melt rate are also discussed on the show.

Beyond Zero speaks to Guy Pearse author of Quarry Vision and High And Dry

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Transcript

Transcript starts at [Starts at 25:35]

Matthew Wright:    Welcome to back to 3CR community radio at twenty-six past four, with Matt, Dave, Elena and Rebecca - and producing today is Natasha. And we’re just getting Guy Pearse on the line, who’s our special guest for today. And if you’ve been listening to our arctic ice complete melt by 2013 you might want to log onto beyondzeroemissions.org and catch our interview, our podcast with Wieslaw Maslowski, the lead oceanographer of the US Navy. We’ve actually spoken to him twice on the program and of course we’ll get him again in September this year for an update.

And we’ll probably be getting Warwick Vincent from the Université Laval as well, in Quebec. And talking about those kinds of impacts, Dave’s got another notable one there that we should be concerned about. It came out of that Copenhagen IPCC update that was on last week.

Dave:    Yes indeed, from The Age on the 13th of March. Global warming is now the biggest threat to the Amazon rainforest. Bigger even than deforestation, which of course they’re doing a good job at.

Matthew Wright:    Yeah. Well there’s a few countries in the world that are good at deforestation. Australia, Indonesia - is it Brazil and Argentina?

Dave:    Yeah.

Rebecca: So, is that because it’s drying out?

Dave:    Yeah, even just a small change in temperature has a huge effect on the biodiversity there. And, yeah, apparently that’s become the new biggest threat.

Matthew Wright:    Wow, we’ve got to really worry about that. Now, talking about threats, there is the lobbyists, they’re a big threat. In fact the lobbyists are as big a threat as climate change itself, and we’ve got Guy Pearse on the line who’s an author of a monthly essay update which is called Quarry Vision. Are you there Guy?

Guy Pearse:    I am. Good afternoon.

Matthew Wright:    Good afternoon. You’re with a few of us, and paneling today there’s myself, there’s Dave….

Dave:    G’day Matt.

Matthew Wright:    And Rebecca in the studio, and Elena’s just slipped out.

Guy Pearse:    OK. Thanks for having me on.

Matthew Wright:    No problem. Now we understand you’ve been keeping your finger on the pulse, and you’ve got a bit of an update which is really urgent now, given that there’s a white paper that’s about to turn into legislation. What can you tell us about this book you’ve authored?

Guy Pearse:    Well, in a way it’s a postscript to High and Dry, the book I wrote back in 2007 which was, as you’d know, pretty heavily focused on the response of the Howard Government. I – just to remind your listeners – I used to be a speech writer for Robert Hill when he was Environment Minister back in the late ‘90s, and was a member of the Liberal Party for almost 20 years, and I made the fateful decision to do a PhD on the response of Australian business to climate change and in doing that I interviewed a whole lot of lobbyists who identified themselves on tape as the ‘greenhouse mafia’ and went on to explain to me how they were being invited back inside government walls, where they used to be bureaucrats, to write Cabinet submissions and ministerial briefings and so on.

So that was really the basis of the Greenhouse Mafia episode of Four Corners, which eventually led to High and Dry. But it was very focused on the Howard Government. So, having been through everything a whistleblower goes through, [laughs], I felt a moral obligation really to stick around and see how the Rudd Government performed because – like many Australians – I gave them my vote on the basis that they had to do better, and they were promising to do better, than their predecessors. And so, it wasn’t really enough material to write a full – another 420-odd pages on – so the Quarterly Essay was really the perfect vehicle through which to give people an update on how that same lobbying force has been shaping the response of the new government.

And I guess I’d seen enough after about six months of Garnaut’s early work, and the preparatory work for the green paper that preceded that white paper last year, to know that the government was, much to my disappointment, crafting an illusion of action rather than delivering on its pre-election commitment to make deep cuts in our pollution in Australia.

Dave:    So Guy, you’re quite concerned that we’re looking at business as usual, the same sort of issues that we had under the Howard years, and I’d really like you to expand on that in a second, but just an interesting little comment there, after your book in 2007 High and Dry, you said you went through everything that a whistleblower goes through. Do you want to expand a little bit on that?

Guy Pearse:    [Laughs] Not really…..

Dave:    [Laughs]

Guy Pearse:    ….to be honest. I mean, one of the great reliefs of doing the essay, this time round, and not having it be about my own party, is that it’s not about me anymore, which has made it a whole lot easier, at least thus far. I mean, it was only published today – we’ll have to see.

But, in all seriousness, to answer your question, when you do what I did you really, you know that you’re putting many good friendships and close working relationships on the line, and you know that there’s inevitably going to be some people who don’t understand that. You know, for whom the political path of least resistance has been the one that they’ve always taken. But politics, for anyone who’s been involved in party politics, you know how clubby it can be. And how personal loyalties are just so crucial to the way the whole machine works.

And so, in essence I was turning my back on that whole system which people who are still involved in it don’t generally take all that well. So, it was – to sort of invoke Graham Richardson – I knew I was going to have to take a walk in the snow after I did that. I knew it was going to be a pretty lean period. And it has been.

But doing the essay and dealing with the same issues, but a different party that wasn’t my party, has been a whole lot easier. In a way it’s enabled me to see things a lot more clearly.

Matthew Wright:    Yep. And now look, you said these fossil fuel lobbyists, who effectively have embedded themselves in the process and embedded themselves in government – now, I assume when the Rudd Government came, I mean, most Australians would assume that they would have cleaned the worst of those people out. What’s actually happened with the changing of the guards?

Guy Pearse:    Well there really hasn’t been a great changing of the guard to be honest. I mean - I’m talking about the lobbyists themselves. There’s been, you know, some switching around, some musical chairs. What you find, if you look at the industry associations representing the biggest producers and consumers of fossil fuels in Australia, they really do play musical chairs, almost as if to keep things interesting for each other. You know, one executive director just moves across from, say, the Minerals Council to run the Petroleum Association, that sort of thing. You see that repeated. And there’s also, as well as musical chairs, you see a revolving door process going on whereby senior bureaucrats, particularly in fossil friendly branches of the bureaucracy, are offered a career path once they reach a certain level and they come out and run a lobby group.
And so many of these people who were powerful under the carbon - sorry, under the Howard regime – are still in the same position, because if you actually look at their resumes, most of them had their start when the Keating Government was in office and many of them were quite closely involved in what I think was really one of the crucial mistakes, looking back now.

During the early ‘80s when we turned our economy outwards and we decided we would tear down the tariff walls, the whole idea was that we would become more trade competitive and that what we lost through subsidising manufacturing and so on – through tearing that down, those protections that we gave to domestic manufacturers that we would gain through coal exports, better access for agricultural products, and also by using cheap coal to attract energy intensive industry to our shores, things like aluminium, for example.

So amongst that bureaucracy at the time there was a genuine belief – and I’m not making this up – I mean, I’ve got this on tape from carbon lobbyists who have explained it to me. That at the time there was a belief among the fossil friendly bureaucrats that were making this decision to turn the economy outwards, that it was in Australia’s interest to do that. That cheap coal could be our competitive advantage. And that we knew at the time that climate change was becoming a concern, but that didn’t really bother us. We thought it was probably, to use the lobbyists’ word, ‘a load of cobblers’, and the last thing we wanted was to interfere with that coal industry.

Matthew Wright:    So they basically banked the country’s future on dig it up and ship it out?

Guy Pearse:    They did. And so many of those same lobbyists are still in – they’re still running the same associations. They may have moved across, just for a bit of a change. But it’s the same players and they still have very good links back into the bureaucracy. So the people that were sort of coming through as youngsters – at the time they were running the relevant branches – they’re now dealing with their former bosses as an industry association boss. That’s just one way the system works, and there are many others.

So for example, the carbon lobby knows that ABARE (Australian Bureau of Agricultural and Resource Economics), as the main source of economic advice on greenhouse policy, has an external fundraising requirement. So they have to find a certain amount of money each year through external consulting. And so the carbon lobby will commission ABARE to do greenhouse policy work which helps them to meet their external fundraising requirement and then, perhaps not coincidentally, you then have a stream of fairly fossil energy friendly advice coming out of ABARE over the years. And you see the same pattern replicated if you go to CSIRO, for the main source of scientific advice. On things like clean coal, you find the same sorts of patterns.

So consistently, what the carbon lobby has done is to identify the main sources of advice that the government of the day relies on, and then to – by writing cheques and taking advantage of the revolving door where they can – exerting influence on the thinking of the government.
And it’s not necessarily – I’m not suggesting that it’s illegal in any way – but it’s a contamination of the political process I think.

Dave:    Guy, you should see the shrugs and the shaking of heads going on in the studio as you tell us this.

Rebecca:    [Laughs]

Dave:    It’s really, um, I guess what we imagined to be the case, but to hear this as the reality is quite difficult.

Matthew Wright:    I think the ABARE one is the most painful.

Dave:    Yeah. That’s right.

Guy Pearse:    Well, let me give you another example that’s more up to date. You know, the expectation was that after Rudd was elected, many of these relationships would subside. But perhaps what people aren’t counting on, for example, is that the CFMEU (Construction, Forestry, Mining and Energy Union), which identifies itself as the largest coal union in the country, is also – has been for quite a few years now – the largest external donor to the ALP (Australian Labor Party) federally.

If you go to a state like Queensland, you see a company that’s deeply involved in digging up the coal, Macarthur Coal, who has as chair of its board, a former Queensland Labor treasurer, Keith De Lacy. And then once the coal’s dug up and it goes to the coast, the company that owns Dalrymple Bay terminal – it’s a long term lease rather than ownership – but the company that’s running that, Babcock & Brown Infrastructure, has another Labor treasurer from Queensland as a chairman of its board. And then the largest coal union in Queensland is run by Bill Ludwig, who just the other day called Ross Garnaut a ‘whacko’ as you probably recall…..

Matthew Wright:    [Laughs]

Guy Pearse:    ….and suggested, I think in jest, that the best way to deal with climate change was to plug volcanoes rather than cut pollution. So many of the links that were very powerful under Howard, perhaps they may have subsided, but they’ve been replaced by equally powerful constraints on a Prime Minister like Kevin Rudd who hails from that state and hails from the same faction.

So it puts him in a position – I’m not trying to defend him – but it does require a fair bit of political courage to stand up against those sorts of interests.

Dave:    Yeah, thanks Guy. Look, we are just going to go to a brief break - much more to talk about, especially in regards to the CFMEU. A quick little break - we’ll be back with Guy Pearse.

[Returns at 38:52]

Dave:    Welcome back to 3CR. We’re talking with Guy Pearse, the author of High and Dry back in 2007, an expose on the Howard years and their non-action when it comes to climate change. Unfortunately, as we’ve just been hearing, it seems business as usual – a lot of the same people that are making the same decisions.

Now Guy, it’s a big export industry, coal. I think – correct me if I’m wrong – something like $60 billion a year pumped into the economy through shipping our coal, our cheap coal, mostly off to Asia.

Your thoughts on how we could replace such a massive, massive economy there?

Guy Pearse:    Well, yes it is a big industry, but it’s a case of yes and no. The industry is worth around I think – ABARE’s projections change quite regularly but I think they….

Dave: [Laughs] Yes they do.

Guy Pearse:    ….they had said at one point that it was going to be 55 billion this financial year. They’ve recently come out and said that it will be worth $20 billion less once the prices, the new prices, come in. So the coal industry is going to go close to falling by 40 per cent in the coming year. I think Terry McCrann said possibly 50 per cent.

So it’s not going to be as big as people think. And when you actually look at it in the context of the overall economy, it’s quite small. The coal industry’s – in a normal year – is worth about two dollars out of every hundred in Australia. And it’s worth around 30,000 jobs at present, which is about half of the jobs that McDonald’s provides in Australia. So it’s a formidable and significant employer in certain regions of the country, but it is not what many Australians would imagine if you stopped them in the street asked them, you know, what’s it worth?

Looking at the coal industry and its impact on emissions: at present, as you’d know, we’re able to ignore the emissions associated with our coal exports because they count where the coal’s burned. But the emissions we’re ignoring are a lot bigger than most people would imagine. They’re roughly 700 million tonnes a year, which is more than Australia’s entire emissions. And if you look at where our coal export production is headed, we’re going to be roughly doubling emissions from about 2004-2005 levels by 2030. And we know from the projections of when carbon capture and storage would be rolled out, particularly in developing countries, that our coal is not going to be burned cleanly on scale in a meaningful time frame.

So we can roughly assume that Australia will be exporting over a billion tonnes of CO2 through its coal by 2030, which is getting close to the emissions associated with Saudi oil exports right now. So we’re on track – if you consider, as I do, that it’s quite likely that Saudi oil production will peak and fall, if it hasn’t already, we’re on track to become the world’s leading carbon mule by 2030. But we’re able to ignore that.

So I do think we have to start at least putting pen to paper and planning an exit strategy. At present we have none and we’re afraid as a nation to even start writing a plan to consider an exit from coal.

And it’s not something – as much as some people might want to – and as convenient as it is for Kevin Rudd to accuse anyone who mentions coal exports of wanting to shut the industry down by next Thursday, that’s not a practical proposition. You can’t shut down an industry like that overnight. But what you can do is start to plan an exit strategy if it proves, over the next five to ten years, that it’s not going to be possible to roll out clean coal on time. And that’s what we have to start doing.

And if you look at the economic cost for Australia if we were to actually start to do that, if we were to phase down coal over ten years or so, if it was not to be burned cleanly, if we could see it wasn’t going to be burned cleanly. And the overall impact on the economy is not as bad as you might imagine. It doesn’t create any major shocks for our coal customers because it’s a phase down process. But, more importantly, on the home front, even if you are very conservative and generous in the estimates for the coal price and the amount of coal we might actually ship out, by 2031 the economy doubles rather than in 2030.

So we really - the $2 trillion that might be tied up in our coal exports over the next two decades or so, on very generous assumptions, we make up basically through an extra year over that period. Keep taking into account that our current GDP of around $1.2 trillion is itself growing, so it’ll be much bigger. So we roughly lose a year by 2031 on our way to doubling GDP.

Matthew Wright:    That’s not huge. Now the other thing about the, I guess, this, whatever it ends up being at the end of this year with the huge retraction in the price. A lot of money is spent on actually provisioning services to facilitate this industry, you know, like the port infrastructure, and it’s taking away from our Commonwealth to do that. And so do we really benefit at all anyway from that money coming in, or for the taxation revenue, and that seems to get poured back into reinforcing its own infrastructure.

Guy Pearse:    Well, you do see when you look closely. The assumption is that Treasury is awash with cash thanks to our digging and drilling, and more specifically the coal industry. But when you look at the Queensland and New South Wales budgets, for example, you find that there’s been a one-off spike with the boom and the prices that were locked in for this financial year, but that they are going to plummet next year. So in Queensland, I think, as coal provides around 3 billion out of, I think it’s around 36 billion, for the overall budget.

In New South Wales - and my figures are perhaps getting a little fuzzy there – I think it’s about one and a half out of 45 billion or so. That’s significant, but it’s not the be all and end all. And federally, the entire mining industry claims – I think it’s around, in a good year, about four dollars in every hundred – if you look at those figures. So, it’s a significant contributor, but whenever you hear discussion of just how important the quarry is for the tax coffers, what’s never really mentioned to balance that is the – I think it’s nine billion or so that’s estimated to – in federal support, in one way or another – for activities that increase greenhouse pollution. So primarily things like fringe benefits tax breaks, you know, so that we drive our car to work, things like that. But there’s a whole range of them. I think it’s – I always get this guy’s name wrong – but last name’s Riedy, whose done the quintessential study on that. I always confuse him with – I think it’s Chris Riedy. I always confuse him with Pat Reidy the basketball player. Forgive me.

Dave:     No that’s fine. Just looking at some hidden costs there aren’t we Guy? I mean, we’ve mentioned the infrastructure, and you’ve mentioned the 9 billion there that the Government has to provide in how it organises all that, but what about the actual lobbying? I mean you saw it first hand. You’ve mentioned the CFMEU is really powerful there isn’t it? The largest coal union. It’s the largest donor to the ALP. I mean, is there an inherent cost in that as well?

Guy Pearse: How do you mean, a cost?

Dave:    Well, I just wonder whether there are some more hidden costs behind all of this - just in maintaining that we are so coal dependent; both to the Government selling it to us, and them selling it to the Government.

Guy Pearse:    Perhaps, perhaps. I thought a good example recently was when we saw in Queensland there was a federal approval given for the Wiggins Island Coal Terminal which will roughly – that along with other expansions taking place in Queensland – will roughly double Queensland’s coal exports.

And then in New South Wales, I think the Government’s spending, I think it was over, it was around 0.5 billion on just railway infrastructure to double the Hunter Valley coal exports. And you combine those two, and in two decisions really, the Government is doubling the export of emissions from coal production in Australia. And yet at the same time claiming to be reducing carbon pollution. So there would have been some pretty hefty lobbying behind those decisions. You can rest assured.

Matthew Wright:    Now, we’ll just finish up with one more question, and then after Guy’s gone there’s the opportunity for talkback just with the regular panel here. Now Guy, I understand you’ve got a bit of an explanation around what is happening with the white paper and the final legislation in that it’s not likely that Australia’s CO2 emissions will actually drop at all, even in the short term or even in the longer, sort of, 2050 horizon. Can you give us some reasoning behind why that drop won’t actually occur?

Guy Pearse:    Yeah. Thank you for that. I was going to interrupt and ask for a special chance to talk about this had you not mentioned it.

I think the great misunderstanding with the whole debate about emission targets for 2020 and 2050, and so on in Australia - the great problem with it is that it doesn’t relate to emissions in Australia. It relates to emissions for which Australia’s responsible. So essentially when we take on a target for 2020 or 2050, we’re talking about an emissions level, an emissions outcome for which we’re responsible.

So if we undertake to reduce Australia’s emissions, say 60 per cent by 2050, we’re not actually promising to cut greenhouse pollution – the stuff that comes out of the smoke stacks and the tailpipes by 2050. What we’re doing is saying that what we can’t achieve at home we will simply outsource by buying emission credits offshore. And the most important thing I see, the biggest failing in the so-called Carbon Pollution Reduction Scheme is that they have allowed 100 per cent outsourcing of Australia’s emissions obligations. So there is no limit on the number of credits that you can buy offshore. So essentially we can outsource all of the things they talk about – you know, the economic transformation, the low pollution future, the green jobs and so on. All that can be effectively outsourced to other countries. It won’t happen here. And the cheapest way of doing it appears to be preserving rainforests, signing contracts to preserve rainforests that can store carbon in developing countries.

The Government’s been very careful to exclude those credits for the first couple of years of the trading scheme, assuming it starts in 2010. But all bets are off once we get to 2012 when the Kyoto period is over. And the clear intention of the Government - and you can see it very clearly in Rudd’s visits to PNG and Indonesia – is that they want to incorporate those deforestation credits if they possibly can into Australia’s Copenhagen target.

Matthew Wright:    [Interrupts] So effect….

Guy Pearse:    ….and you…sorry.

Matthew Wright:    Yeah, so effectively, there’s no structural - no restructuring of our economy. They’re just thinking…..

Guy Pearse:    [Interrupts] No.

Matthew Wright:    ….you know, just go on the way it is and just pay somebody else for it.

Guy Pearse:    That’s right. We just meet a – we could actually have a situation where in 2050 we’ve met our Copenhagen target, even if it was, say, 25 per cent, and we’re on track for our 60 per cent target for 2050, and yet our actual emissions in Australia haven’t fallen and the emissions from our coal exports have doubled.

And in fact if you look at Treasury’s modeling, you see that they assume we outsource about half of our emissions obligation up till 2020 - they’re a bit less clear about what they assume after that – and then by 2050 they expect that greenhouse pollution, the actual pollution in Australia, would be between 400 and 425 million tonnes a year, which is very close to what it was in 1990. So essentially, this is excluding land use change in forestry back in 1990 - they were at 418 million tonnes. So essentially all we’re doing is returning actual emissions to 1990 and then outsourcing the rest of the job overseas while we cross our fingers waiting for clean coal.

Dave:    Guy, we could keeping talking all afternoon. I’ve still got a list of questions that I could ask, but unfortunately we do have to wrap up. But I’ve been asked to thank you on behalf of all Australians for your very brave whistleblowing effort. And thanks very much for talking to us today.

Guy Pearse:    Thanks. It’s been a pleasure. I’ll come back on another time.

Matthew Wright:    Look forward to speaking to you again. Thanks Guy.

Dave:     Thanks Guy.

Guy Pearse:    Cheers. Bye.

Matthew Wright:    Right. That was Guy Pearse, whose book High and Dry was a fabulous seller, and I read it myself and can recommend that. And now the Quarterly Essay which is available and you can read Quarry Vision and it’s a fantastic name, depicting the state of the Australian political psyche which is all about dig it up, ship it out and somehow we’re all going to ride on the coal loader’s back into the future.

Dave: [Laughs]

Rebecca: [Laughs]

Matthew Wright:    But that’s sort of a backward thing - coal loaders. Very, very turn of the century.

Rebecca:    Yesterday.

Matthew Wright:    Yeah, 1900.