Australia cannot squander its prosperity on policies that put vanity before science | Alexander Downer

This is not an argument for Australia to do nothing about climate change. Far from it, writes Alexander Downer.

It is hardly surprising that Australia is once again debating the virtue of its net zero climate change policies.

Similar debates are unfolding across the liberal democratic world because of the enormous costs involved in trying to reach net zero.

What is surprising, however, is how little we really know about the basic facts that should underpin the discussion.

For all the noise and moral fervour, two simple questions remain unanswered.

First, how much will it cost — taxpayers, industry and consumers alike — to meet the government’s 2030, 2035 and 2050 emissions targets? And would the cost of not meeting them be greater still?

Second, what measurable impact will all this expenditure have on the climate itself? These are simple and sensible questions, yet their answers remain obscure.

The mystery is why these questions are not at the very centre of our national conversation. Journalists and politicians should be pressing for clear, empirical answers before billions of dollars are committed to policies whose results may well be negligible.

Climate activists like to remind us that “the science is settled.”

Yet if one wades through the thousands of pages of the IPCC reports or consults other serious analyses, one finds that the only thing truly settled is that the planet has warmed since the Industrial Revolution.

Prime Minister Anthony Albanese. Picture: NewsWire / Martin Ollman

Opposition leader Sussan Ley. Picture: NewsWire / Martin Ollman

The degree, pace and long-term consequences of that warming remain subjects of intense debate.

The more zealous advocates, including those in the present Australian government, prefer to take the most extreme and least likely scenarios and present them as certainties.

They are nothing of the kind.

Indeed, over the past two centuries, as the world has warmed, the global economy has expanded roughly forty-fold and average living standards have risen nearly nine-fold. Humanity has never known such prosperity.

There is no shortage of conflicting claims about what climate change has brought — more storms, fewer storms, more droughts, more rain.

The contradictions themselves tell us that the science of climate impacts is far from “settled.”

What is most troubling is the absence of transparent costings for our current policies. According to the Net Zero Australia project — led by the University of Melbourne, the University of Queensland and Princeton University — cumulative capital requirements to reach net zero are $7–9 trillion by mid-century.

Other analyses, such as BloombergNEF’s Australia New Energy Outlook, estimate around US $1.9 – 2.4 trillion (roughly A $2–3 trillion) of energy-system investment to 2050. The lower figures focus narrowly on the energy sector, but whichever way one cuts it, the sums are colossal.

This raises the obvious question: if we invest between $2 trillion and $7 trillion in pursuit of net zero, what will our return be?

How much will the climate actually improve, and how much better off will Australians be as a result? No one seems to know.

It is worth remembering that inaction also carries costs. Nobel laureate William Nordhaus, whose DICE model remains one of the most widely cited in climate economics, estimates that assuming there will be a 3 °C rise in global temperature that would reduce global income by roughly 2 per cent by 2100. That is hardly trivial — but nor is it catastrophic.

Given that many long-term projections foresee the global economy growing by perhaps 300–400 per cent over the same period, a loss of a few per cent is hardly the end of civilisation.

It does, however, give us a rational framework: we should not spend more mitigating climate change than the economic damage it would otherwise inflict. 3 per cent of Australia’s current GDP is about $80 billion.

Yet our government is contemplating investments of between $2 trillion and $7 trillion to reach net zero — an order of magnitude greater than the total economic loss Nordhaus projects from doing nothing.

And yet in Australia, these arguments are rarely aired. Instead, we are told endlessly to “trust the science,” even as scientists and economists continue to disagree vigorously about both the magnitude of the problem and the effectiveness of the proposed solutions.

Finally, we should confront an uncomfortable truth: no single country, including Australia, can by itself achieve a measurable reduction in global temperature by 2100. Climate stability requires co-ordinated global action.

That does not mean we should do nothing — far from it. We should make a fair and proportionate contribution. But there is no virtue in imposing vast costs on our economy for the sake of gestures that have no practical impact.

Climate policies that raise electricity prices, close industries and carve transmission lines through productive farmland hurt ordinary Australians most. They act, in effect, as regressive taxes on lower and middle-income households.

We should think carefully, and debate honestly, before squandering the wealth built over generations on policies designed more to satisfy moral vanity than to deliver measurable results.

By all means, let us follow the science — but here’s a warning. Science is always changing, as it should.

Originally published as Australia cannot squander its prosperity on policies that put vanity before science | Alexander Downer