Climate Institute takes a final bow, as the lost decade starts to come good
Tina Perinotto | 9 March 2017
The irony was that on the day the Climate Institute was forced to call it quits for lack of funding, conservative newspaper The Australian proclaimed on its front page that energy policy chaos meant consumers were paying for energy price hikes the equivalent of $50 a tonne of carbon.
That’s more than double the former carbon tax of $23 a tonne.
Connor, who spoke to The Fifth Estate on Thursday morning – after the axe that had hovered over the organisation since 2015 finally fell – said that the front page story was a “bitter sweet irony”.
“Even The Australian is no longer a refugia for simplistic scaremongering and the coal lobby is running out of corners to hide.”
It’s not that he could say the institute’s work was done – it would never be done – but certainly there have been some hugely encouraging developments in recent times, particular in the capital markets, Connor said.
The biggest power players in the world – in banking, finance and insurance – now view climate as posing material risk to their assets.
Even company directors are getting on board.
“Of course our work is never done, and we’ve still got serious issues to tackle,” Connor said.
“But I do have to say I’m not pessimistic about our role in the context because everything apart from the politics is trending in the right direction, so I don’t believe the politics is sustainable.”
The goal of the Climate Institute had always been to get climate issues integrated into decision making for longer-term investment.
Connor said he was proud of the progress made in the financial sector and now with the prudential regulator.”
“So the APRA speech the other day was one of my top 10 days in 10 years.”
The Australian Prudential Regulation Authority said in late February that climate was a “material risk” to the financial system.
This echoes two important speeches by the Governor of the Bank of England Mark Carney, who warned that the speed at which financial markets were likely to adjust to climate risk was likely to be very quick and seriously disruptive to the entire financial and economic systems.
APRA’s warning has been seen as the possibility that the “the policy vacuum will be filled by the personal liability of company directors and the disclosure requirements of financial regulators“.
“Directors around the country are starting to sit up and recognise that this is something they need to take into account,” Connor said.
The legal opinion on directors’ duties and climate risk by Noel Huntley SC had made sure of this.
It was clear the Climate Institute had been a leading player in these developments, Connor said.
“Capital is there, the community is there, and politics sits in an uncomfortable spot in the middle.”
Among the best news now was also that technology was rapidly advancing, making renewable energy increasingly affordable.
It’s been a “long lost decade” but somehow there were now strong signs of progress, Connor said.
In relation to the institute’s Climate of the Nations report into attitudes of Australians to climate change and its solutions, Connor said his team would work with its stakeholders to ensure it would continue “in some shape or form”.
Meanwhile Connor has been snapped up by Baker McKenzie to head up the Fijian Government’s COP 23 Secretariat.
The institute closes after 12 years in operation.
It released the following statement on Thursday morning:
The Board of The Climate Institute (TCI) has announced that the TCI will cease to operate on June 30 2017. The Board announced that the decisions comes as a result of being unable to establish the viable level of funding that would enable The Climate Institute to continue in a meaningful, sustainable form.
TCI has conducted ground-breaking research; built influential strategic partnerships among business, investor, welfare, union and other community groups; achieved domestic and diplomatic public policy outcomes; helped shape change to the regulatory landscape and driven the evolution of financial sector climate risk management, particularly among superannuation and institutional funds, domestically and internationally (see attached list of achievements on following page).
Through its Climate of the Nation series, TCI has also conducted what is now the longest trend survey of the attitudes of Australians to climate change and its solutions.
“With the expiry of its original founding bequest, and despite ongoing support from a range of philanthropic and business entities, the Board has been unable to secure sufficient funding to continue the level and quality of work that is representative of TCI’s strong reputation,” said Board Chair Mark Wootton, who was among the original founding Directors and has been Chair since 2007.
“The Climate Institute has been a provider of pioneering research and a leading advocate for credible, practical climate policy throughout a tumultuous period in Australian public, investor and business decision-making.
“TCI is often described as a trusted broker and critical friend, and we are proud of the way it has built understanding and consensus among a wide variety of stakeholders on such a complex, challenging and important issue. “We are disappointed that some in Government prefer to treat what should be a risk management issue as a proxy for political and ideological battles. They are increasingly isolated as the costs of inaction mount and the opportunities and benefits of action become ever clearer,” he said.
When established in 2005 for an intended five-year life, TCI was the only non-government organisation focussed solely on climate change. TCI has now been joined by many other organisations with a significant focus on climate change. Regulators and investors are beginning to seriously integrate climate risk and opportunity management. The historic Paris agreement provides a framework for international accountability and action. There has also been a stunning recent surge in affordability and scale of clean energy alternatives.
“While challenges still abound, the landscape is much stronger than it was twelve years ago when TCI was first established. The Board is proud of the achievements of The Climate Institute, and its staff, in making an enduring contribution towards its 2050 vision of a resilient Australia prospering in a zero-carbon global economy, participating fully and fairly in international climate change solutions.”
TCI will see a core body of projects to fruition by June 30, and the Board will work with other organisations to ensure key aspects of its work continue through 2017 and beyond. A Transition Sub-Committee has been established to oversee this work.
The Board has also reluctantly accepted the resignation of John Connor who has been Chief Executive Officer of The Climate Institute since February 2007. From April, Mr Connor will be working with Baker McKenzie, heading up the Fijian Government’s COP 23 Secretariat which has been established for the purpose of Fiji’s Presidency of the 23rd Convention of the Parties to the United Nations Framework Convention on Climate Change. John has been a dedicated and highly skilled CEO at TCI and has been pivotal to our achievements.
Olivia Kember, head of policy will assume the role of acting CEO.
The board will make final determinations on the future of The Climate Institute and its work before June 30.
In its 12 years, The Climate Institute has delivered impacts across policy-making, corporate and investment strategy, and public understanding of climate change. Here is a short summary of our key achievements:
Delivering federal momentum – TCI’s advocacy helped deliver the expansion of the Renewable Energy Target in 2008, the Turnbull/Rudd Carbon Pollution Reduction Scheme agreement in 2009, and the implementation in 2012 of the Clean Energy Future Act. The CEF Act reduced emissions by around 40 million tonnes over two years, while the economy grew. When the CEF Act was abolished, we helped save vital independent institutions like the Climate Change Authority (CCA). More recently we built bipartisan support for Australia’s ratification of the Paris Agreement, in December 2016.This year we are building support across business, social, environmental, union, investment sectors for the current Coalition government’s 2017 review of climate change and energy policies to deliver a stable long-term emissions reduction strategy consistent with the objectives of the Paris Agreement.
Research and risk management – TCI has provided new insights into the impacts of climate change, leading to adjustments in industry practice and empowering everyday Australians to make sound decisions. For example, in 2007 we led ground-breaking research forecasting bushfire weather conditions that resulted in the “very extreme” and “catastrophic” categories of bushfire risk now in use across the nation.
We pioneered research into the cascading consequences of climate impacts on interdependent infrastructure. We investigated the potential systemic financial implications of climate change, and the risks to banks from impacts on real estate. (e.g There Goes the Neighbourhood cited in the recent influential directors duty memo of Noel Huntley SC ). This and work on climate risk for company directors, published by the Governance Leadership Centre at the Australian Institute of Company Directors, was recognised by the Australian Prudential Regulatory Authority in February in an APRA speech signalling that Australian financial institutions would be expected to consider all forms of climate risk.
We pioneered the use of carbon budgeting in national policy and in analysing risks to the electricity system. This approach was taken up by the CCA, and our report A Switch in Time was cited by the International Energy Agency.
Climate of the Nation – TCI has tracked and analysed the attitudes of Australians, nationwide, to climate change and energy issues, policy and action since 2007. This research has been widely used by government, stakeholders and the media as attitudes and policies have changed. As climate issues have become more politicised and subject to ideological argument, our research has been an anchor for the mood and responses of the electorate.
Climate change diplomacy – Since 2007, TCI has played a leading role in supporting Australia’s climate change diplomacy efforts, while holding Australia’s position to account. We have educated policy-makers, businesses, investor media, and others about the implications of the Paris agreement for Australia’s economy, and helped them understand how to ensure prosperity through decarbonisation.
Strategic alliances – Strategic alliances that TCI has developed have been crucial in achieving progress. For example, in July 2015 the high profile coalition of business, investor, welfare, union and environmental organisations – the Australian Climate Roundtable – jointly announced support for reducing Australia’s emissions to net zero. This sign of support for strong action shows that the issue is not seen as ideological or political, but as an economic risk and opportunity, by a broad range of Australian interests.
Investment, assets and climate change – In 2008, TCI developed the Asset Owners Disclosure Project (AODP) in partnership with the Australian Institute of Superannuation Trustees, now an independent global organisation. The AODP focuses on shifting trillions of dollars toward the zero-carbon economy by requiring asset owners to disclose and manage their climate risks. The AODP Global 500 Climate index of climate risk management in the world’s top 500 asset owner organisations is now published annually. The 2016 Index rated funds with $38 trillion assets collectively under management.
Presenting the human face of climate change – TCI has also revealed the impact of climate change in our everyday lives: the implications for mental health and community wellbeing , for our ability to access and afford home insurance, for playing and organising all levels of sport and recreation, and for production, trade and our consumption of the world’s coffee supply.
Practical tools – We have provided practical tools for understanding complex climate-related situations. Our G20 Low Carbon Competitiveness Index was used by Lord Nicholas Stern in his engagement with governments across the major economies. In the lead up to Paris, our monthly briefs and calendar of climate policy developments around the world showed how much other countries were moving forward.
Working with the states – We have provided the states with evidence-based advice to assist them to step up pollution reduction and investment in clean technologies. We have participated on various state advisory councils, been commissioned by state governments to provide analysis, and recently contributed to the development of NSW’s 2016 draft climate strategy, which includes an aspirational goal of net zero emissions by 2050 among other key policies.