The world according to Ken Henry

Chair of the Australian Climate and Biodiversity Foundation Ken Henry at the National Press Club in Canberra.

Ken Henry is a darling of the Canberra press gallery, which breathlessly reports his every pronouncement – investing them with Papal infallibility. I hate to break it to them, but he is as capable of speaking rubbish as any other mortal.

Don’t get me wrong: Henry was a fine Treasury secretary (who I worked closely with and admired) and should always be carefully listened to on tax. But when he becomes an “angry” environmental prophet – as he did in his widely-reported Press Club address on Wednesday – his listeners should be on their guard.

Think I’m exaggerating? Channelling his inner David Attenborough, if not his Greta Thunberg, Henry at one point said “we have turned nature against us”, “posing an existential threat to everything we value”.

Henry’s speech was an impassioned call for the “urgent reform” of the 1999 Environment Protection and Biodiversity Conservation Act.

This legislation has not only failed to achieve its stated environmental objectives, he argues, but the “slow, opaque, duplicative and contested” planning decisions it has fostered have proven “incapable of supporting an economy in transition to net zero”, slowed housing construction and undermined productivity.

Indeed, according to Henry, there is no “more important” way to lift our productivity growth than fixing our environmental laws. Really, Ken?

Henry urges our political leaders to adopt, in whole cloth, the recommendations of Graeme Samuel’s review of the EPBC in 2020. He expresses his frustration that, five years on, “not a single reform has been implemented”, putting this down to “indulgence”, “commercial and political vested interest[s]” and industries “with business models built on the destruction of the natural world”.

A pretty dismissive way to refer to those with reasonable economic concerns about Samuel’s radical blueprint.

Samuel wants to scrap the exemptions and carve-outs in the EPBC, replacing them with a set of national environmental standards to govern all project approvals, with minimal discretion for governments to depart from them.

Project-by-project decision making under the existing Act – which Henry argues will “always undervalue natural capital” given the “free riding” and “myopia” of pro-development advocates – will be replaced by regional plans specifying those where development can take place and where it will be banned.

These bright lines, Henry suggests, will “deliver the quick decisions” demanded by business.

(Samuel also recommends a voice-like body for Indigenous representatives to participate in decision making, but Henry is smart enough to pass over this in silence.)

Henry acknowledges that business and environmental groups want further changes to the Act – with the latter seeking a climate change trigger – but calls on them to compromise.

On the surface, Samuel’s blueprint may seem hard to argue with, but I have serious reservations with it which Henry’s speech has only reinforced.

First, while Henry accuses development advocates of “free-riding” and “intergenerational myopia”, the environmental bureaucrats who will write Samuel’s binding standards are not free of these cognitive biases.

In the Canberra bubble, the private sector is no more than an abstraction; the impact of its harsh rules on farmers, miners and manufacturers is rarely recognised; and the global retreat from net zero has not been acknowledged.

Second, the make-up of the proposed standards cannot, as Henry suggests, be determined by the “immutable laws of nature, chemistry, physics and biology”.

Reasonable people will disagree about them, given the trade-offs and differing value judgements that will inevitably come into play. While almost all will agree that threatened native species and forests should be protected, restrictions on land clearing, which hurts farmers, will always be contested.

Third, the new Act will give a strong green light to the government’s reckless renewable rollout. Henry says that Australia will have “no chance” of meeting its renewable targets – which require a tripling of our wind and solar capacity in the coming five years – unless we have much faster approvals for wind and solar factories.

He makes no mention of the local environmental or economic harm this is already causing, nor the minuscule impact it can ever have on global emissions.

Flying in the face of international experience – which shows that energy costs rise as reliance on renewables to the grid increases – Henry even suggests that productivity will be boosted as we go down this path.

While no-one disputes the need for targeted environmental protection, our material living standards, our national security and the life chances of future generations depend on continued economic development – as Amartya Sen wisely argued, “development is freedom”.

Difficult choices will have to be made, based on an open discussion of competing views and respect for both pro-development as well as environmental perspectives.

On the eve of the productivity summit, Henry was ideally placed to articulate the trade-offs, but chose instead to ignore them, finding refuge in a form of environmental catastrophism that closes off, rather than fosters, rational debate.

David Pearl is a former Treasury assistant secretary.