Senator the Hon. Mathias Cormann
Minister for Finance
Leader of the Government in the Senate
Senator for Western Australia
Date: Wednesday, 22 January 2020
OLIVER CANN: Hello everybody. Welcome to this issue briefing, it’s our third of day one of the 2020 annual meeting of the World Economic Forum, our 50th meeting. For those of you who aren’t familiar with the issue briefing format, we like to think they engender more free and liberating conversation, far from the throng of the congress centre here in the media village. These are short sessions, they are half an hour. They tend to be issue-based and news agenda-based, so we put our program together at quite short notice. Very, very grateful for our panel who join us. Having that said, we put this panel together in the past few days.
This session is on the global impact of Australia’s wild fires. We’re not here to talk about the wildfires, so much as how do we overcome this problem, how do we fix this problem that is a global crisis. We know the area devastated is twice the size of Belgium. We’ve all heard about the massive damage to humans, communities, wildlife and nature. We really want to focus here on how to stop this thing happening again.
Very, very happy to be joined and proud to be joined by Mathias Cormann, Minister for Finance, Leader of the Government in the Senate of Australia. Carlos Afonso Nobre, director and researcher of Brazilian Academy of Sciences. Dr Nobre, I’d love to hear your views and bring you in to talk about your experience studying forests and their link to climate change and what lessons we need to be learning. And Lynette Wallworth, you’re an artist from Australia, a cultural leader. Last night you were named as one of our Crystal Award winners for 2020.
The format, as I said, will hopefully be interactive. We encourage you to ask questions, make comments. Just stick your hand up and I’ll find a good way of bringing you into the conversation. What we generally do is start with a round of questions to our speakers and get the conversation going.
If I may, Minister Cormann I’ll start with you. As Finance Minister of Australia, what steps are you prepared to take to bring down the country’s climate-related risk in the future?
MATHIAS CORMANN: Australia is taking effective action on climate change. We are one of a handful of countries that is on track not just to meet but to exceed and beat our emissions reduction targets agreed to in Kyoto by 2020 by more than 400 million tonnes of CO2. Not many countries can say that. We are on track to meet and beat our emissions reduction target agreed to in Paris by 2030. The top line emissions reduction target that we are locked into – 26 to 28 per cent – when you assess that on a per capita basis, Australia is a large continent with a comparatively small population, 25 million people, on a per capita basis we are reducing emissions by half, by 50 per cent. That is more ambitious than countries across the European Union, Canada, New Zealand, Japan and others. Indeed, in terms of emissions intensity in the economy, emissions per unit of GDP output, we are committed to reducing emissions by two thirds. We believe that we are very ambitious. Climate change is an issue that can only be addressed effectively at a global level and all countries around the world need to contribute and we believe that we are contributing guided by a desire to pursue policies that are environmentally effective and economically responsible. We believe we are doing our bit.
OLIVER CANN: On that point, it sounds like everything is on track. Having reflected upon the past month or two months and the forest fires we’ve been having, is that going to trigger any kind of change in policy?
MATHIAS CORMANN: In the context of resilience to climate change and climate change adaptation, I think that there is certainly more that we need to do. Generally, Australia is well prepared to deal with emergencies, but this was a particularly devastating extreme bushfire event. Australia has experienced bushfires for thousands of years. Indigenous Australians have conducted back burning operations in a regular, methodical and very sophisticated fashion long before the European settlement of Australia. There is no doubt that climate change has had an impact and it worsens the intensity of the events and there is certainly more that we need to do to deal with managing the events when they occur in a nationally coordinated fashion. The Prime Minister in this bushfire season led an unprecedented nationally coordinated emergency response effort. We are providing significant investment in terms of the bushfire recovery period with a $2 billion fund directed into helping fire-impacted communities rebuild for the future. But into the future, of course there is more that we need to do in terms of adaptation and resilience.
OLIVER CANN: What about repositioning the economy? We need green growth. One of the big watch words of this meeting.
MATHIAS CORMANN: Australia has great potential to contribute to emissions reductions globally and it is very important that the policy choices we make don’t make it harder for Australia to help reduce global emissions. Let me say that black coal out of Queensland, for example, which is lower in ash and lower in moisture than other options being burnt in developing countries around the world can make a contribution to help reduce global greenhouse gas emissions. Every tonne of emissions producing LNG in Australia helps to reduce global emissions by five to nine tonnes where it displaces particularly dirty, environmentally inefficient coal sources. In Australia, 25 per cent of our energy supply in our national electricity market comes from renewable energy. The projection for that is to reach 50 per cent by 2030 and, indeed, our per capita investment in renewable energy and clean energy is more than twice the level of Germany, the UK and France. Again, people need to keep it in perspective. Australia is a huge continent with a comparatively small population. When I speak to my family and friends in Europe, having grown up in Belgium as a kid, there seems to be a lack of perspective on how big Australia actually is. You mentioned that an area twice the size of Belgium burnt down. That is of course mentioned in the media…Interrupted… Yes, sure. But let me make the point that Australia is 256 times the size of Belgium and it is about two per cent of the land mass of Australia that has been impacted by those fires, about 0.4 per cent of our population. It is devastating for those communities and obviously our heart goes out to them and on behalf of Australia let me express our deep gratitude for the support, assistance and friendship we have received from countries all around the world in the wake of these devastating bushfires. But it is important to also look at these things objectively and assess them objectively so that we can prepare our responses objectively.
OLIVER CANN: Some great points which we’ll undoubtedly come back to. Lynette, let’s go to you first. You said, if I remember your speech correctly, I believe you said we’ve seen the unfolding wings of climate change yesterday. Let’s unpack that a bit and talk about your confidence in how we can avoid this situation and what needs to be done at the government level, what you’d like to see done at the community level because the Minister said this requires all of society coming together to make Australia more resilient to the disasters.
LYNETTE WALLWORTH: Last night I focused my speech on leadership because I think that that’s what we need. We can talk about these figures, we can say two per cent of the total of Australia or we can talk about 30,000 koalas just from Kangaroo Island alone, lost in the fires just most recently. There’s the statistics and then what it means on the ground. What I feel when I hear, I’m sorry Mathias, but when I hear you talk I feel like I’m listening to someone who still doesn’t believe we’re in a crisis. And I think we are in a crisis. I don’t think that these fires are representative of all the fires that we’ve ever had. I know that the analogy is not correct, the frog in the boiling water disproves scientifically. But I feel like that’s where we are. We keep saying we’re adapting to something without jumping out of the pot. I mean taking action. I don’t want to be listening to how we are using our figures to meet these targets, but not actually responding to an emergency that’s happening.
OLIVER CANN: I think we can make the assumption, I’m making the assumption that we’re living in a crisis and maybe the Minister will disagree. So, what do we do about it? What do you want to see done about it?
LYNETTE WALLWORTH: I want to see leadership from the top that we can follow confidently. We have a Prime Minister right now who is saying we’ll do this, we’ll do that, but we won’t raise electricity prices. I will pay more electricity if it gives me the chance to use renewables and it shifts us away from this trajectory that we’re on.
OLIVER CANN: Anything else? Of course there’s the right to respond, but let’s keep the conversation moving.
LYNETTE WALLWORTH: Anything that’s going to help. I really feel that the point is leadership because people will manage any sort of change if they have to. I think that the conversation is continually around economics and never around the things that we value. We love our environment in Australia, we love the animals, we will do very many things to keep those things protected and what I would love is to see leadership from the top which we can follow. The communities on the ground are doing what they can, but we all know we are better. That’s why we are here. We all know we are bettered by positive leadership that actually accepts what’s happening and not trying to always suggest that it’s really not that bad.
OLIVER CANN: Less numbers…
LYNETTE WALLWORTH: Less numbers, more listening.
OLIVER CANN: Let’s move to Professor Nobre, who’s not Australian but has acquired over his professional lifetime a huge immense knowledge on the linkage between forests and climate change. I want you to step in and give your considered opinion on what needs to be done, not just for Australia because we have had forest fires everywhere, not everywhere but in a number of places in the last six months. Devastating impact on the environment globally, so let’s not just focus on Australia, but I’m very interested to hear what your prescriptions are.
CARLOS AFONSO NOBRE: Yes, devastating forest fires everywhere. In mid-latitude and some tropics the ecology is adapt to fire historically for millions of years. However, we are changing the basic states. The Australian bushfires show that we are very, very close to a tipping point. Climate change is making higher temperatures, extreme droughts much more frequent. If we look at Australia, six out of the 10 most severe droughts and the warm years were in the last 10 years. This is climate change. There is very little doubt that what we’re seeing unfolding is due to climate change. I am not going to get into the meteorological complexities, why this is happening, Il Nino becoming more intense, the Indian Ocean dipole becoming more intense. This is meteorological jargon, but those things are happening. The big question is if repeated situations like that happen, then forests will never have time to readapt. That’s why most of the Australian scientists, very reputed scientists are saying for over 10 years, if we are unable to stop climate global heating, many ecosystems will disappear in the future. In Australia, of course, a very short-term measure for adaptation is recovering from this 16,000 square kilometre bushfire. Keep in mind that the fire was so intense because the temperature was so high that a large portion are still being assessed of those forests, but particularly eucalyptus forests died. They were not only slightly affected. They died. There will be and I think it will be a good experiment, Australia will have to start the largest forest restoration project in the world.
OLIVER CANN: That’s a good point Professor because we heard the President of the United States mention earlier today that his country was supporting an initiative to facilitate and planting and restoration of a trillion trees this decade. But we need to do things differently, right? Is it restoration, is it replanting? What are the lessons and how do we plant forests and create woodland spaces that are less vulnerable in the future because we know that global warming is here?
CARLOS AFONSO NOBRE: Again, for mid-latitude and sub-tropical ecosystems you can restore forests. However, the severity of droughts and the warm temperatures continue unabated. Lightning strikes start a fire. Sorry to say, it will be impossible to maintain those ecosystems if we do not meet the Paris Agreement target of 1.5 degrees. That’s why it’s a global responsibility, although Australia certainly has responsibility as any other country. We really have to get to net zero emissions by 2050 if we want to maintain those ecosystems, particularly mid-latitude and sub-tropics.
OLIVER CANN: We’ve reached the halfway stage and we’ve covered our bases very well. Let’s get some different perspectives. Let’s have a quick show of hands for questions.
QUESTION: I’ve recently retired from the Fire and Rescue New South Wales. I’ve spent the last 40 years of my life as a career firefighter. I have worked very closely with the volunteer firefighters as well. I guess it’s more of a comment, but there’s a significant level of frustration within the firefighting community and they’ve been hailed as heroes for the outstanding work they’ve done, but they really need to be listened to as well. Climate change has been happening and there have been a couple of critical fires – 2003 in Canberra, 2009 in Victoria – that have rewritten the textbook on fire behaviour. The fires we’ve experienced recently are different to any other fires we’ve had. One, they’ve been so geographically extensive. There’s no capacity from other states to come and assist because all states are now at their maximum in fire-fighting capacity. Two, we normally have severe fire seasons in conjunction with an El Nino effect, the weather affect. That didn’t happen with these fires. There’s now an El Nino neutral climate system and we still have these fires and it has pointed out that Australia is now the hottest it’s been and we’ve recorded record hot years over the last number of years.
So firefighters are looking for political leadership to recognise and to take action and really, the fires that we’ve just experienced in Australia are a wakeup call to the world and the clear message is the absolute need to reduce deeply and urgently carbon emissions.
OLIVER CANN: Thank you sir, we’ll come to that later. Can you pass the microphone over to your neighbour?
QUESTION: Mathias, really glad you mentioned Indigenous land practices and wondering if your government is thinking about supporting more of the traditional ways of managing the land in Australia and perhaps the economics of investing in that, saving great damage in other activities.
OLIVER CANN: I believe, if I’m correct, we have a non-Australian about to ask a question so we can globalise the conversation.
QUESTION: I suppose I wanted really just to find out whether your reaction to President Trump’s speech. President Trump spoke about prophets of doom and I think sort of felt that climate change activists were over-egging the science. Do you agree Minister, with the President of the United States that people are being too gloomy about climate change?
OLIVER CANN: Now let’s take this in order, so political leadership and the firefighters. Are you…
MATHIAS CORMANN: If I take them in turn, this is obviously going to be an ongoing conversation in a domestic context in Australia and the Prime Minister has flagged the Government is considering what form a comprehensive enquiry, a Royal Commission or other enquiry might take moving forward. Right now we’re still dealing with the emergency response. There are still quite a few fires burning, so that’s the priority. We have started the bushfire recovery process but there will be a period to properly work through how better to respond and what else we can sensibly do in relation to these sorts of issues.
I say it again, Australia absolutely does its bit when it comes to effective action on climate change globally. There are not many countries that are going to beat the emissions reductions targets by 2020 agreed to in Kyoto. When it comes to our Paris targets, looking at it on a per capita basis and on an emissions intensity of the economy basis, our emissions reductions are significantly higher than those of many other comparable developed countries.
When it comes to Indigenous land practices, there has been some of it. I think there could be more and the Prime Minister overnight, in Australia last night, has been making the point that we need to focus on hazard reduction as well as on emissions reductions and that is certainly something that Indigenous Australians did very, very well for thousands of years. Indigenous Australians, I know that I had the great experience here in Davos in 2016 to watch a movie, an immersed experience of watching those Indigenous land practices in action and they were pursued for a range of purposes but they also helped mitigate the risk of large scale bushfires. Using those sorts of methodical, regular, sophisticated methods into the future has to be part of the conversation. There is no question.
In terms of President Trump, I thought he gave a great speech. It was a very uplifting speech. He was obviously focussing on the great achievements of his administration when it comes to boosting economic growth in the United States and some of the global issues and some of the global economic outlook.
When it comes to climate change, the Australian Government’s position is very clear. We are committed to effective action on climate change. We do understand that climate change is something that needs to be addressed. We also understand that the only way that it will be addressed effectively is through a global response. If we had a mature global conversation about this we would not be doing constant finger-pointing, we would actually be looking at how each country can best contribute given the natural attributes that respective countries have to contribute to a global solution. We always have to make sure that we don’t have preconceived ideas on what blanket policy propositions might deliver the best possible impact. A carbon tax has been mentioned, a price on carbon, when in Australia it would actually make it harder for Australia to help reduce global greenhouse gas emissions. No question. We would be shifting economic activity and jobs overseas where for the same amount of economic output emissions would be higher. We would be making it harder to export comparatively cleaner energy sources into developing countries around the world where they are currently, and can even more so into the future, displacing less environmentally efficient energy sources, from LNG to uranium to, even to black coal compared to brown coal options in other countries as well as solar, wind, hydrogen and all of these other energy sources. There’s no question.
Again, on a per capita basis, everybody is saying that we don’t like to talk about numbers, but it’s very hard to talk objectively about an issue without mentioning numbers. There is no question that Australia is a world leader when it comes to per capita investment in clean energy. The level of investment in wind and solar, and the Government is pursuing substantial investment and catalysing substantial investment through the Clean Energy Finance Corporation into clean energy. There is no question that we are a world leader when it comes to clean energy investment. As technologies evolve and technologies improve there is always more and better things we can do, but we are committed.
QUESTION: Back on to the point about President Trump. I take the points you’re making, but President Trump doesn’t seem to believe the science of climate change. Does that worry you?
MATHIAS CORMANN: I am not a commentator on President Trump’s beliefs. I was in the audience, I thought it was a great speech. It was a fantastic speech.
QUESTION: It didn’t worry you, he didn’t mention climate change?
MATHIAS CORMANN: I thought he delivered a great speech about the economic achievements of his government.
QUESTION: Professor Nobre, let’s talk to you. Does it worry you that the President of the United States likened the climate community to prophets of doom?
CARLOS AFONSO NOBRE: Of course it worries all of us because since his election, getting out of the Paris agreement, that really sent a very bad signal to many countries I think. Countries which were more committed to meeting their commitments to Paris Agreement are in a position for instance China, China should really abandon completely coal fired power plants if we want to reach 1.5 and even 2 degrees and that would certainly effect Australian economy exporting coal. I think this is really very troubled political leadership coming from the US because that’s not even the position as viewed by the population. 17.4 per cent of the US population are concerned about climate change. I don’t think this is good for sustainability of the planet, it’s very bad. However, I think the population, particularly the US population, will not really respond. And also, I’m not sure it’s true whether adapting or preventive adaptation will lead to bad or poor business. On the contrary, climate change gives enormous opportunities and as the Minister here mentioned, renewable energy which is generating hundreds of thousands of jobs a year in the world and also in the United States so, I don’t think defending say, coal, mining and a very small community in the US really is good for the planet.
LYNETTE WALLWORTH: I would like to say something about that.
OLIVER CANN: Keep it quick if you don’t mind. And let’s hear two more questions.
LYNETTE WALLWORTH: I’m not against the numbers. I’m talking about values in addition to the numbers. I’m talking about how we weigh these things up. We can say we’re investing in renewables, but we de-invested in renewables. We can say that we’re shifting, but we’re opening large coal mines in addition to what we already have, so it’s about where does this pendulum swing, where it shifts in the direction of where we are actually heading and not continually trying to hold in balance things that may be incompatible for the future of the entire world.
MATHIAS CORMANN: Just on that point because obviously a high profile coal mine in Australia is the Adani mine. I was in a session earlier with the Indian Commerce Minister and he made the point that India for the foreseeable future will need to rely substantially, including in order to facilitate increased reliance on renewables, will need to rely on coal for their baseload power. They will have several options. Either they use cleaner Australian coal with lower ash and moisture content and higher energy intensity or they use dirtier, environmentally less friendly and more polluting coal in order to achieve what they will seek to achieve, and that is to provide electricity to their people. Now again, this is actually Australia making a beneficial contribution. Not every coal mine is a bad thing for the environment. When you have better quality coal compared to the alternative options that are available, you actually might be able to help, through the transition, provide better outcomes.
LYNETTE WALLWORTH: Are we talking about transition as a government? Is the Government talking about transition away from coal to renewables?
MATHIAS CORMANN: For the foreseeable future coal will be a significantly important energy source. We’re facilitating increased levels of renewable energy and that will continue into the future. But let’s be realistic. 50 per cent of global coal production comes from China. Australia is responsible for six per cent of global coal production. India, about 12 per cent. The US, 10 per cent. 50 per cent of global coal production happens in China.
OLIVER CANN: Anyone for a last question before we start wrapping up?
QUESTION: As the young generation, this is the world you are leaving to us and you are taking the decision right now, so we are watching. Just a point I would like to bring that I heard this morning that I found very interesting was from an Indigenous woman. I really think we should listen to Indigenous people because they have solutions and connection to nature and the way how we can connect to in order to rebuild the forests which have been completely burned. Maybe you have a point to address it just to pass the message forward.
MATHIAS CORMANN: Indigenous Australians were and are very good at managing fire. When it comes to hazard reduction burning we could learn a lot from Indigenous Australians, there is no question. One of the issues, not the only issue but one of the issues, after an extended period of drought in the Australian context, was the fuel load that had built up. It was quite extraordinary and if we had more regular back burning and more regular hazard reduction activities, which are in Australia organised at a state level, it will help reduce the risk. There is no question. That is one of the great things that Indigenous Australians have shown over many, many years.
CARLOS AFONSO NOBRE: Just one point. If we reach three degrees, which is the commitment of the countries towards the Paris Agreement, not 1.5 or two, if we reach three degrees, this year’s summer in Australia will be every year’s summer. And if that happens, even indigenous communities are not used to, for 60,000 years, to that kind of climate. They may be very ingenious and come out with ways, but I’m not sure.
OLIVER CANN: I have a question for Minister if I may. Coming immediately from another session where we talked about net-zero and we had Green Peace, we had Lord Stern, we had a climate investor and very much the discussion was on the fact that there is beginnings of a change, we’re not at a tipping point yet, but we are seeing major action among sovereign wealth funds, among investors on de-risking their own portfolios and moving away from fossil fuels, for example. So my question is very simple, in terms of the risk to the economy, do you think you have accurately and are you happy with your risk assessment of how insulated the Australian economy is?
MATHIAS CORMANN: I don’t accept your analysis in terms of the nature of the Australian economy. The Australian economy is quite diversified. Yes we do have a significant component that is made up of the resources sector, which the coal sector is a part of. But I will say it again, there is a global demand for coal and if it is not met by cleaner Australian coal, comparatively cleaner Australian coal, it will be met by comparatively dirtier coal from other sources and the world environment will be worse off.
I just make the point again about Australia. Australia is a sunburnt country of droughts and flooding rains. These are not words that I have invented, these are words that were coined by Dorothea Mackellar 115 years ago. Climate change is making things worse. We do have to have an effective response to climate change. We do have to have effective strategies to increase resilience and to deal with hazard reduction but we also have to keep it in perspective in the sense that Australia has always been a country that has suffered extreme weather events on both sides of the spectrum.
LYNETTE WALLWORTH: I think that’s the challenge. That’s where we’re poles apart because we can say this about a history continually, we can meet the challenge of this moment and one requires a shift. And the shift in thinking is the thing that’s very hard to hear from our leadership I feel. I am waiting for the change that says, that acknowledges that this is unprecedented. That we haven’t experience this before. That even indigenous people with their long-standing and continuing mosaic pattern burning would not be able to manage this. When do we change?
OLIVER CANN: You’ve made that point very eloquently, unfortunately we’re out of time. We need effective climate change strategies, we need new hazard avoidance strategies, we need new ideas about how to replant forests, and we need solutions to take to our communities, our fire fighters and our indigenous peoples. Thank you very much for joining us. Thank you for watching us live online.