Has The Carbon Lobby Captured Kevin Rudd?

Long before climate change and peak oil emerged as serious issues, fossil-energy producers and their biggest Australian customers — our carbon lobby in waiting — exerted a disproportionate political influence.

As mostly foreign-owned, capital-intensive businesses, they often lacked electoral clout, so the only real ace in their pack was to threaten to take operations elsewhere. The best way to avoid regulation or to attract government support was to confuse the national interest with their own. That required strong relationships with both sides of politics, with bureaucracies, think-tanks, industry associations, scientific and economic agencies, and media commentators.

The extent to which these industries succeeded over a period of decades is best reflected, as we’ve seen, in successive Australian governments’ judgment that cheap coal is the centrepiece of national competitiveness. Thus, when climate change emerged as an issue, there was already a consensus among Australia’s business, political and media establishment that the quarry was sacrosanct, coal non-negotiable. It had to be protected at all costs.

In the early 1990s, the Australian carbon lobby got busy, fast. Its members immediately recognised that any Australian commitment to absolute cuts in greenhouse-gas emissions was a problem. It threatened the place of cheap coal in Australian energy and trade policy, raised operating costs and could expose the fact that many commodities were produced with more emissions here than virtually anywhere else. These industries were under threat of losing their privileged position in Australia’s political order, but they were well placed to defend it and they knew the issue would take decades to play out. They prepared for a long, drawn-out fight.

Their strategy was to prevent action by Australia, and if that failed, to delay action, and if delay failed, to shift the burden of emission cuts elsewhere. This meant nurturing seeds of doubt about whether climate change was caused by burning fossil fuels. It meant persuading government that emission-intensive industries made a much greater economic and employment contribution than was the case; that greenhouse constraints would wreck the entire Australian economy. It also meant arguing that Australia was a special case: an emission-intensive country with relatively less scope to decarbonise. Finally, Australian action had to be made conditional on action by other countries (there would always be sufficient recalcitrance elsewhere to justify delay).

For Australia’s emerging carbon lobby, success depended on the political leadership hearing these messages repeatedly from all the sources they trusted. Much of the infrastructure of influence was in place, but the key to winning the policy battle was using big money and the right people. Directly and indirectly, the key players wrote big cheques to the main sources of economic, scientific, ideological, industry, union and political advice for Australian governments.

Knowing that the Australian Bureau of Agricultural and Resource Economics (ABARE) would be relied upon from the mid-1990s as the principal internal source of greenhouse economic advice, a "who’s who" of fossil-fuel producers, burners and users bought chairs on an ABARE steering committee. (That is, they literally bought them: the price was $50,000 per year, and payers included the Australian Coal Association, the Australian Aluminium Council, BHP, CRA, the Business Council of Australia, the Electricity Supply Association of Australia, Exxon Corporation, Mobil Australia and Texaco). This committee oversaw the creation of the economic models on which crucial assessments about emission cuts were based.

Though the ensuing analysis showed how easily affordable such cuts were, the presentation was consistently spun to create the opposite impression. Given that ABARE’s mission was to "enhance the competitiveness of Australia’s agricultural and resource industries" (rather than the broader national interest), the quarry-friendly take on climate change was unsurprising. However, the carbon lobby took no chances, spending large sums on commissioning extra ABARE greenhouse policy work (hundreds of thousands of dollars were spent in one documented case involving the Minerals Council, the Aluminium Council and the Electricity Supply Association of Australia). As a senior carbon lobbyist involved in that work told me:

"Basically ABARE has a requirement to meet certain earnings targets so you can do that through outside consulting. So we commissioned [another party]to do some work … and they got the modelling done by [another party]and ABARE, alright? To our assumptions."

Carbon-lobby companies and industry associations have also contributed considerable sums towards ABARE’s overall research program, helping the organisation to raise the tens of millions of dollars it needs annually to meet its external funding requirement. Predictably, all of this has resulted in a steady stream of reports about the cost of cutting emissions that have lent themselves to misrepresentation. A senior minister in the Keating government (still serving today) told me a few years ago that, although he didn’t appreciate it back then, ABARE was:

"…effectively used by pro-industry interests at the time … If ever you wanted to see a self-serving group, ABARE would be the absolute classic [example]of an agency that acted that way in my view when we were in government."

"They were guns for hire," the minister said. "They were a wholly owned subsidiary of the Department of Primary Industries and Energy at the time and they did the bidding of the DPIE. [So the idea that they propose, that they’re an independent …] Is unadulterated crap … don’t fall for any suggestion that there’s any impartiality about ABARE."

Knowing that the government listened to more than one source of economic advice, the carbon lobby locked in the key consultants, such as ACIL Tasman, to prepare research backing up its arguments in favour of delay. In recent years, the lobby has also relied heavily on a few consultants in the local branch of CRA International, a firm that has been at the forefront of the successful campaign to delay emission cuts in the United States.

Favoured CRA consultants have now moved over to a group called Concept Economics, and together it and ACIL have advised almost every major carbon-emitting industry in the country. ACIL (and CRA to a lesser degree) has also been contracted, sometimes without open tender, to run government inquiries and taskforces, and to provide advice on a host of greenhouse-related matters to federal departments from the prime minister’s on down. Thus, whether "independent" advice came from inside or outside government, it was subsidised one way or another by carbon-lobby cash and showed a remarkable but unsurprising uniformity.

Steering the scientific advice to government was equally crucial, and once again the cheques came thick and fast. Since the late 1990s it has been dangerous for large multinationals and their industry associations to deny openly the link between greenhouse-gas emissions and climate change. Rather than risk damaging their brands, they fund front groups to challenge the findings of the UN’s Intergovernmental Panel on Climate Change.

A small global network of "experts," many of them with no relevant climate-science qualifications, have been funded directly and indirectly to ensure a constant stream of submissions to government inquiries, conference speeches, bogus petitions, documentaries and media commentary. This has created the impression of division in the scientific community where almost none exists.

In Australia since the year 2000, the Lavoisier Group has co-ordinated the local fight against the science. Such organisations can freely say what their sponsors dare not: that climate change is "the greatest fraud ever perpetrated on the public," a "scam" and a "web of deceit"; that concern about climate change is "green religion", that wind farms are monuments to "pagan gods", and that the "Great Barrier Reef may actually benefit from some global warming."

They publish books like Thank God for Carbon and go so far as to suggest that those running the IPCC should "be facing criminal charges and the prospect of going to jail."

Internationally, the funding links between climate sceptics and resources companies (especially Exxon and the coal industry) have been exposed. Some of the "experts" are veterans from previous industry-backed campaigns to discredit scientific findings about tobacco, asbestos and leaded petrol. Yet there has been little attention paid to the funding of Australia’s sceptics, who have delivered testimony to the US Congress, the House of Lords and at countless conferences. They put their hands on their hearts and say they receive no "research" funding from corporations, but what is not disclosed is who funds the globe-trotting greenhouse advocacy that takes up most of their time.

The funding arrangements in Australia are relatively opaque, but the template is the same as overseas. Occasionally we get a glimpse: Western Mining Corporation (WMC), for example, proudly acknowledged its support for the Lavoisier Group in, of all things, a sustainability report. WMC’s former CEO Hugh Morgan launched the Lavoisier Group, and senior staff ran it.

More often than not, the sceptics’ activities are funded by neo-liberal think-tanks, such as the Melbourne-based Institute of Public Affairs, which are in turn funded by emission-intensive companies. The IPA’s Energy Forum is dominated by fossil-energy interests, including La Trobe Valley and NSW coal-fired electricity generators. Senior IPA staff running the forum say the IPA rarely takes a position that differs from that of its Energy Forum funders, "otherwise they’d stop funding us".

Financing the sceptics is only half the story. At the respectable centre of the debate, a different approach is required. Given that fossil-fuel burning is in fact the problem, the case has to be made that fossil fuels are also the solution — that emissions can be safely and economically stored underground through carbon capture and storage. Funds have been channelled into sections of the CSIRO to support research and development of CCS technologies. This has helped to meet external funding requirements just as it helped ABARE, but it has also created "constant pressure" to focus on commercial research for paying industry partners.

As CSIRO has publicly acknowledged, it also gave polluter clients the right to veto research findings they didn’t like being made public. A succession of eminent scientists have spoken out since leaving the CSIRO about the various ways in which they were barred from making public comment unwelcome to the carbon lobby or a government determined not to offend it. Talk about emissions trading, emissions targets or climate refugees was off limits — as was membership of the Wentworth Group of Concerned Scientists.

Various cooperative research centres, along with the Centre for Low Emission Technology, have been established with carbon-lobby backing. On the surface, they resemble academic institutes objectively studying the viability of CCS. In reality, they are champions of the technology whether it is viable or not, and PR conduits for those providing the funding. While these "R&D institutions" are busy generating the impression that "clean coal" is a fait accompli, their sponsors are busy inflating hopes of what it might achieve. The Hydrogen Energy collaboration between BP and Rio Tinto, for example, promoted the idea that coal gasification is the path to a hydrogen economy. The Monash Energy collaboration between Shell and Anglo Coal promoted the idea that coal liquefaction can deliver Australia independence from foreign oil.

Though the carbon lobby is bashful about the amount of money it funnels to independent scientists, the Australian coal industry has consistently lauded its own generosity in placing a levy on itself to fund carbon capture and storage. The billion dollars this levy is intended to raise sounds impressive, but it is spread over more than a decade. It is a tiny fraction of the industry’s profits, and not enough to cover the cost of just one large conventional coal-fired power station, let alone a "clean" one.

Most major greenhouse polluters are represented by at least one industry association: mining, electricity, cement, oil, car manufacturing, trucking, paper, plastics and chemicals. Some, like the Australian Aluminium Council, do little but greenhouse policy; all spend large sums communicating the economic and scientific cases for delay or taking minimal action. Their willingness to spend has enabled these industries to dominate the debate. With a steady stream of international negotiations to be monitored, and a plethora of domestic policy processes, very few stakeholders can afford to be everywhere.

Greenhouse policy is a rich man’s game and the deep pockets of the Australian carbon lobby have made its members ubiquitous. From parliamentary testimonies to press-club speeches to the relentless stream of communication with ministerial offices, senior bureaucrats, party officials and the press gallery, they’ve never missed a day at school.

This is an edited extract from Quarterly Essay 33 — Quarry Vision: Coal, Climate Change and the End of the Resources Boom, by Guy Pearse (Black Inc).