On the Australia Fires and what comes next

News from the front desk, issue 463: Dear Scott Morrison, we told you well before Christmas you had the chance to be a superhero. To jump onto the world stage and claim leadership on a scale that no small-to-mid size country has seen before. To beat that annoying Jacinda Ardern who apparently gives Steve Price untold misery – so perfect is she.

But now as the deadline decade of 2020 starts to show its bloodied fangs we have seen you playing a sad game of catch up. There’s been unfriendly mean photographs of you sitting alone in a Hawaiian shirt, staring into space. Or getting the brush off from people who clearly have no manners. Just because they lost their homes. Or were an exhausted mess from firefighting.

That must have hurt.

Now we see you doing a quick two-step, dancing backwards and forwards between a newfound desire to cut carbon, and duchessing the coal industry with the promise of no change. Seriously, you could have a self-inflicted lobotomy if you keep going like this. One side for good; the other for evil. Sooner or later there has to be a complete split.

On the positive side it’s good to see you’ve dropped your insistence to keep our Kyoto credits to meet our Paris commitments on emissions cuts. You too must have spotted that wag saying it was like demanding your primary school grades count towards university entrance.

The headlines haven’t helped your old schtick. Here’s a few fragments:

• Scientists paint Australia fires as red alert on climate change  “The scale of this disaster is something I couldn’t have imagined, and it’s the same for a lot of people in Australia.”
•  Australia’s bushfires could drive more than 700 animal species to extinction.
• Salty water in Bangkok is new ‘reality’ as sea pushes farther inland Bangkok’s water authority says tap water is becoming saline as seawater pushes up the depleted Chao Phraya river, a growing risk faced by many of Asia’s coastal cities
• Siberia has had temperatures 20C higher than average
• “Dystopian future”: Climate change to force review of military’s role

Things got so grim that even the ABC’s chief political correspondent Laura Tingle lost it on Twitter. She told a troll who was carping on with the usual Russian bot-talk of  “unbalanced coverage” from the ABC, to “go f…” himself.

With no ellipses.

What, like, “on the other hand, it’s ONLY 4.6 million hectares of Australia that are burning”. A rare editorial engagement: go fuck yourself https://t.co/wcIaU7q2eQ

— Laura Tingle (@latingle) December 31, 2019

Got to say the Fourth Estate has been amazing in covering these fires over the past weeks, and now of their unending aftermath in so many areas of our lives. Both at home and internationally, and especially from the ABC even with its dystopian-level budget cuts. We suspect much of the coverage was pro bono from the number of journos caught out down in the thick of the fires.

Now even the Murdoch empire is starting to unravel a bit. Watch out. Rupert has been known to turn on a dime if the he senses the mood of the masses change. He’s done it in the UK and he’s done it in Australia. Overnight. That’s the freedom you get when you have no ideology to speak of. You know what we mean, don’t you Mr Morrison.

One thing the media hasn’t done yet though is give these fires a name. Maybe that’s the job of overseas people because of all the smoke and fear we’ve gifted the rest of the planet.  Perhaps they’ll be known simply as the Australia Fires, and Australia will be known as the Canary… in the coal mine, of course.

What comes next is more important. It’s hard to know where to start. And after being glued to news, radio, television and social media for weeks – with the occasional light relief of having a crack at a few Russian bots when the anger overflowed – this is not easy.

But here are a few thoughts.

• First, everything is different. That’s because of complex systems where everything is connected. And while the political and investment world likes to think it need only abide by its own arcane set of rules and principles, in fact these rely on some underlying fundamental drivers that are very fragile.
• The air we breathe, the water we drink, the biodiversity that gives us life. Yes there is a health, humane, psychological and community impact of these fires. Along with this reality there has also been a massive Tiananmen Square attack on the fundamental drivers of value. People need to know we all agree that a dollar is worth a dollar, and that Sydney and Melbourne and the South Coast of NSW are fabulous places to live. Let’s not mention the 90 towns in NSW facing Day Zero. That’s the day they run out of water and they must wait in line for water trucks or the desal or reverse osmosis plant to kick in. Latest to face this is Braidwood, near Canberra. What the economic cost of keeping these towns hydrated – with a “water grid from the Macquarie River to Murrumbidgee” – is not known. Despite all the best intentions of the state government, the rivers of gold – like the rivers of water – are not a guarantee.
• The intersection of the complex systems thingy. This is where the natural environment – and our food chain – intersects with the pricing mechanism and overtakes any economic rationalist argument or sense of financial value that might have previously held true. It means a whole revaluation of those fundamentals, locations and supply chains.
• The fear of more to come. This is not a one off disaster event. It is just the start. Think of Siberia experiencing a 20 degrees centigrade hike in temperatures with the real possibility that whole cities and towns may sink into the melting permafrost. Think how this has put a polar vortex of wind up Vladimir Putin, who just on Thursday announced a new political regime to entrench his powers, prompting the government to resign. Holus bolus.
• Australia is not a small player; it’s a giant player. As the canary in the coal mine, it will be the most important player of all. Will it move to save itself or will it self harm into oblivion. Our reaction will be a guidance and light for all humanity. Will self preservation trump preservation of capital?
• Then there was BlackRock, the world’s biggest fund manager made the most important call of all to the global capital markets this week when its boss Larry Fink delivered his famous “Dear CEO” annual letter to the world’s biggest investors. He’s scared. We think he’d been watching the fires. He said he’d been watching Greta Thunberg. After retreating from the greenwash of recent years, Fink was clear and unambiguous – all climate guns blazing.
• The very foundations of our financial/economic/capitalist system could be undermined, he said. Fink is talking about the reshaping (or destruction) of the very things that give capitalism its resilience such as the security of property, mortgages, insurance and the ability to model the future value of things. Here are some highlights:
  • “Climate change has become a defining factor in companies’ long-term prospects. Last September, when millions of people took to the streets to demand action on climate change, many of them emphasised the significant and lasting impact that it will have on economic growth and prosperity – a risk that markets to date have been slower to reflect. But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.”
  • “The existential threats of climate are as much to the markets as to the planet. Will cities, for example, be able to afford their infrastructure needs as climate risk reshapes the market for municipal bonds?”
  • “What will happen to the 30-year mortgage – a key building block of finance – if lenders can’t estimate the impact of climate risk over such a long timeline, and if there is no viable market for flood or fire insurance in impacted areas?”
  • “What happens to inflation, and in turn interest rates, if the cost of food climbs from drought and flooding?”
  • “How can we model economic growth if emerging markets see their productivity decline due to extreme heat and other climate impacts?”
• The politicians and government. Two separate beasts. The former are hostage to their electorates, the government agencies less so and we must be kind to them and help them quietly and subversively because they are our true friends, the keepers of the knowledge of the sacred Machiavelli, the “Yes Ministers” of our future. We must help them and embarrass their ministers at the correct time to effect change. We must be vigilant and learn from the masters of the past. Many public servants are among the last caring ideologues of our world; generally they go into the government to help (Let’s agitate to bring more of them back and to not squander $4.5 billion or thereabout on private consultants who fill the roles of sacked public servants and cow tow to their purse strings).
• Business and Greenwash. Tough one. What to do about the complex “path to sustainability” that almost the entire business world now professes to be on? What do we do about those errant left hands of companies that do whatever they like – business as usual, among their worst deeds – so that the right hand can spout their noble and ethical stories? Check out the nerve of Siemens recently, a giant global company with more than 80 billion in annual revenue and nearly 400,000 employees, that says it’s “one of the world’s largest producers of energy efficiency resource-saving technologies”, which while the Australia Fires were still burning its CEO Joe Kaeser announced it had decided be loyal to its “small” contractual obligations with Adani and its Carmichael coal mine instead of its much bigger obligations to planet and sustainability. This despite 57,000 Germans signing a petition to drop the contract.
• Virtue signalling. What the hell is wrong with sticking your hand up and saying “here is where I stand”? When you’re a small voice, signalling is pretty much all you’ve got. Get that, Mr Morrison?