Chris Bowen needs to recover the government’s credibility to promote Australia and support the Pacific
The proposed Adelaide climate conference was a chance to showcase Australia’s climate achievements and opportunities. Bowen can still push that, but now he can duck the hard questions and minimise the political risks.
Chris Bowen can’t hide from reality. The Climate Change Minister has dodged a potential bullet with his COP compromise but he takes another as Pacific Nations and carbon market proponents look for progress.
Carbon Growth Partners’ Rich Gilmore told The Australian the deal “seems like the worst of both worlds”. As COP president, Bowen will be responsible for its successes and failure without the profile and prestige of hosting the event.
Bowen is trumpeting his new global role just as carbon market supporters are bemoaning delays in his own department’s handling of issues crucial to building a viable carbon market.
Without the market, climate ambitions will struggle.
The Adelaide COP was being supported as a vehicle to push the government into climate friendly action while also showcasing the renewables progress achieved in South Australia and Australia’s obvious natural benefits supporting a nature friendly energy transition.
For a reform-shy government, blaming the UN process is an ideal outcome.
Bowen now has it all before him to recover the government’s credibility and this will come using the claimed increased standing in the process to promote and expand Australia’s initiatives and support for the Pacific. The government presumably knew the rules before trumpeting Adelaide as next year’s environmental show case.
The fact is, four of the last five UN Conference of the Parties hosts were based in Western Europe. Brazil was only the second of 30 conferences to be held in the southern hemisphere after South Africa in 2011 and none have been held in the Pacific.
Gilmore noted Bowen’s failure to shift Turkey says nothing positive about Australia’s influence on the world stage. That said, the COP process has moved from setting targets to focusing on implementation and monitoring progress which arguably is less suited to international conferences of 198 countries.
This and logistics issues explains why some of the usual business suspects sat it out this year sending underlings instead. The US absence was obviously notable at a time Bowen and others were stressing the importance of multilateralism.
But COP is an important cog in the emissions reduction wheel.
Pollination’s Anna Hancock told The Australian: “It is still a useful annual calibration as we shift the global economy, build adaptation and respond to steadily escalating physical risk.”
Clean Energy Finance Corp’s Heechung Sung said the conference “raises ambition in an equitable way.”
This year’s focus on natural capital also fits with the Australian agenda with more focus on nature-based investment and stressing the market-based partnership with the land sector. The role of land-based conservation and restoration methods are a key focus of firms like Green Collar and Climate Friendly.
At a time when the government talks up manufacturing, food security is an emerging theme with farmers the main suppliers. Their role in helping to reduce emissions and ensure food security for both the domestic and export market will increasingly be a rallying call from the carbon market club.
Gilmore argues the federal government should also step forward and boost Australia’s economic potential by promoting two way trade in the carbon market, allowing Australian companies to use accredited international offsets and open Australia’s compliance market to international investment.
Carbon market structures aside, Australia is also blessed with an abundance of solar, wind and land which are an under developed boon for the economy. While Australia’s emission reduction framework is world leading, lack of government focus also means a supply shortage looms for new offset methods to attract new capital.
Of the 26 carbon credit unit methods listed on Bowen’s departmental web sites, two are slated to be scrapped, nine are in force, 10 are under review and five under developed.
The standard setting body, the Emission Reduction Assurance Committee, is due to release a draft of the integrated farm land management method for comment this year.
This Climate Friendly-backed project is six years in the making and a proposed multi-method offset has attracted some concern from the soil carbon proponents worried it may mean the loss of their method and critics who say it is designed to hide faults in the human induced regeneration method.
Carbon Market Institute boss Sasha Courville told The Australian that “protracted timelines for priority method development are creating market uncertainty with the potential to undermine investment confidence and thus curb the pipeline of new project supply”.
“This could impact the Safeguard Mechanism and be a handbrake to Australia’s climate ambition.”
Chris Bowen has some work to do in his day job.
McKinsey report into ANZ
Former ANZ chairman David Gonski was no doubt surprised to read the McKinsey report into ANZ culture, having chaired the bank from 2014 to 2020 after also serving on the board from 2002 and 2005.
He appointed former chief executive Shayne Elliott, present chairman Paul O’Sullivan and most of his former comrades on the board.
McKinsey said the bank had “failed to create a risk and customer focused culture” and the evidence was spread across the media almost daily in recent months.
Gonski, of course, left the building five and a half years ago but corporate culture as new boss Nuno Matos is learning takes some time to change.
Nufarm share price challenge
New Nufarm boss Rico Christensen stands just over two metres tall and will need every bit of that heft to get Nufarm back to a stock price above $4 and hopefully 2022 levels approaching $7 a share.
Running a listed agri chemicals company is not for the faint hearted and departing CEO Greg Hunt has faced his share of issues reflected in the total return for his decade in power of negative 63 per cent underperforming the market by 219 per cent.
Hunt was instrumental in revamping his management team including hiring Christensen, the former chief of then Dutch ag chemical group Cheminova.
He also successfully transformed the company from a commodity-based business to one with some potential homegrown superstars such as omega-3 canola and the cover crop carinata, which is poised to be the feedstock for sustainable aviation fuel.
Both are potential company changes but have suffered delays caused by a combination of government policy support and changes in international markets.
More recently investors were wrongly convinced Nufarm was going to raise more capital.
Given its weak share price Nufarm has shelved plans to sell its seed technologies business.
Chairman John Gillam has the company poised to do the hard work to get it back into shape and maybe even ready for sale at a lot more than a fire sale price.
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