Climate policy and industry groups: what does ‘constructive’ look like?

Climate policy is a fraught debate in Australia. It has claimed many political careers; it inspires intense feelings; and it requires us to weigh and manage lots of risks to the community and industry. Ai Group has been an active and constructive part of this discussion for many years. So we just about fell off our chairs when a London-based non-profit recently rated global industry groups on their climate lobbying, and ranked us 30th most negative in the world!

This blog post takes a short look at the report by InfluenceMap and its methodology, and at Ai Group’s record. The bottom line? It’s really hard to assess the full impact and meaning of policy advocacy on a comparable basis across many countries; and while InfluenceMap may have tried their best in the ambitious task they have set themselves, they are well wide of the mark – in our case at least.

The September 2019 report Trade Groups and their Carbon Footprints is a point-in-time snapshot of a continually updated database that InfluenceMap maintains, wherein they try to capture and assess the advocacy of companies and trade groups. They publish their methodology; with respect to trade groups, this involves:

  • assessing a selection of 35 “of the most powerful organizations representing corporations around the world”;
  • gathering data on each organisation’s advocacy and influence from externally verifiable sources such as policy submissions or quoted remarks to the media;
  • assessing and scoring the organisations, based on the data, against 12 queries relating to transparency and performance on:
    • climate science;
    • global treaty on climate change;
    • climate change policy and legislation, including carbon pricing, energy efficiency, renewable energy, energy policy and emissions targets and regulation;
    • Disclosure on relationships
  • Totalling the scores and ranking the organisations for their performance.

That all sounds well structured. But it is in practice very hard to apply, and involves some very contestable value judgments. InfluenceMap transparently publish the data points and assessments that go into their scores for each organisation; trawling through the Ai Group assessment highlights the problems.

On climate science InfluenceMap scores us negatively for “not fully supporting IPCC need for drastic action”, based on two comments in our 2013 submissions to the Climate Change Authority’s review of emissions caps and targets. It’s worth reviewing these in full.

Ai Group comment InfluenceMap assessment
Addressing climate change is as important to the long term interests of industry as to any segment of society. Solutions need to be economically efficient as well as environmentally effective. Emissions reduction efforts must attract the participation of countries representing a sufficient proportion of global emissions to address the problem and satisfy participants that their efforts are not in vain. The enactment of some forms of effective constraint on greenhouse gas emissions in major producer countries is also vital to prevent distortions to the competitiveness of Australia’s trade exposed businesses. The potential for such competitiveness impacts is the most serious concern that industry has with emissions reduction policy. Placing emphasis on technological feasibility and economic viability of emissions reductions as opposed to IPCC demanded response
Consistent with the principle of calibrating climate effort to the actual and evolving level of international action, the Authority should also give additional thought to the issue of the 2°C goal and consistent emissions budgets. All countries are formally committed to the goal of ensuring that global average surface temperatures do not increase by more than 2°C from preindustrial levels. However, it is very widely acknowledged that current emissions commitments from all nations are collectively inadequate to achieve this goal, even if headline pledges are assumed to be met. While international climate negotiations are an iterative process, and future rounds may lead to commitments consistent with the 2°C goal, there is a very serious possibility that commitments remain inadequate for this objective. The world may effectively pursue looser, though still challenging, goals, to constrain temperatures at levels above 2°C. That would have serious implications for Australia in terms of risk and adaptation requirements, but it would also imply a different notional global carbon budget to define Australia’s fair contribution against. While such scenarios are troubling, they need to be fully considered if the review is to provide the best input to policy. The Authority has provided guidance on Australian emissions budgets consistent with the 2°C goal. It should also consider other outcomes, such as 2.5°C and 3°C, and the carbon budgets, mitigation and adaptation requirements associated with them. Not clearly supporting IPCC demanded GHG emissions reductions

The underlying comments are nuanced; the assessments are not. It is not clear why arguing for economic efficiency in how we achieve our climate goals is inconsistent with science. The same is true of noting that global action is lagging short of what is needed, and that planning should take this into account. Moreover Ai Group has repeatedly recognised, including through the joint climate policy principles we negotiated with the Australian Climate Roundtable, that we want the world to succeed in keeping temperature increases well below 2°C, and that this entails most countries including Australia eventually reducing net emissions to zero or below. The practical, economic, competitive and social aspects of this are important topics in their own right, not failures to accept the science.

Other elements of the assessment are perplexing. In the leadup to the 2013 election, Ai Group argued that the fixed carbon price introduced by the Gillard Government had started too high, and that the so-called ‘carbon tax’ should bring forward its already-scheduled transition to a floating-price emissions trading scheme. At the time this would have reduced the carbon price, likely either to the price of domestic offsets from land sector activities, or the price of European Union ETS. The InfluenceMap assessment marks us down for ‘Opposing carbon tax’, but does not mark us up for supporting an ETS in the same context.

With respect to greenhouse emissions targets and standards, InfluenceMap give us an overall negative score based on several assessments worth unpacking.

  • We are described as opposing Victorian state greenhouse gas targets because in 2016 we said that we strongly preferred targets to be set at the national level. But in the same statement we recognised the contribution that States could make if they avoided conflicting and inefficient policies, and we have not in fact campaigned against Victorian policy or targets at any time over the past three years. This suggests the limits of relying on isolated statements and overinterpreting them free of context.
  • Similarly, we are described as not supporting ambitious Australian emissions targets because in 2016 we noted that Opposition targets of 45% reductions by 2030 and net zero by 2050 will be very challenging and require major changes across the economy. We also called the announcement an important contribution and said that to meet the goals we would need to build broad consensus and address trade competitiveness. We did not campaign against this target either, and acknowledged in our 2019 pre-election policy papers that emissions targets will need to deepen over time under any government.
  • A 2015 blog post by me is described as not supporting ambitious emissions reductions in Australia. The post in fact argued that business as usual emissions projections were much too pessimistic, making emissions targets much easier to meet than commonly recognised. The text quoted by InfluenceMap concludes: “And while it appears certain that emissions will fall well short of the latest projections, the truly deep reductions implied by a global goal to keep climate change to less than 2°C will still be very challenging – a mountainous task.” The quote fails to include the capper: “But a closer look shows it is more Kosciuszko than Everest.” This perhaps shows the difficulty of assessing evidence from a different cultural context; an Australian reader would be aware that our highest mountain, Mount Koscuszko, is a tiddler compared to Mount Everest (2.2km versus 8.8km, in fact). The piece is clearly arguing that deep emissions targets are both a significant challenge, and much more achievable than then-typical Australian projections indicated.
  • Finally, we are described as having a mixed position on targets because our 2019 pre-election policy statement both referred to building on the Commonwealth’s Safeguard Mechanism, and to the need to manage trade competitiveness risks within it, considering tools such as access to offsets or baselines reflecting trade exposure “which might [lessen] the stringency of the emissions standards”. From direct conversation with InfluenceMap, raising concerns about competitiveness and advocating for access to offsets are inherently negative factors in the assessment, though not necessarily given the worst score. But we and many others would forthrightly argue that managing trade competitiveness is a core challenge for effective and sustainable climate policy, while well-regulated offset markets can help achieve climate goals at lower cost or enable higher ambition at no further cost, while spreading benefits to other sectors, regions and countries. Our statement acknowledged the need for legal certainty and environmental integrity in any offsets, and that offsets will not be cheap or plentiful in the long term (given the global quest for decarbonisation). The scoring system gives no weight to such positions or nuances.

Judgements around the Renewable Energy Target are equally questionable. We are marked down for “opposing renewable energy legislation” because in 2014 we argued that “the large scale RET target should be lowered to a level that is practically deliverable in 2020, but no further”. But the context for this was a strong political desire to cut the target deeply or abolish it altogether; we argued that deep cuts would not be in anyone’s interest, and that the target should only be reduced to the extent that it could not actually be achieved by 2020. Similarly, we are criticised for ‘not supporting renewable energy legislation’ and ‘not supporting modifications to increase RET ambition’ in early 2017. In fact our joint statement with the Business Council of Australia, which said “We are reassured that the Federal Government does not intend to alter the existing Renewable Energy Target, which was settled in a bipartisan decision less than two years ago”, came in the context of fresh mutterings about cutting or abolishing the scheme, not expanding it. This kind of context is understandably difficult to gather through desktop research in a different country.

There are many more data points in the InfluenceMap assessment, and I don’t intend to respond to them all. The examples cited above highlight the limits of InfluenceMap’s approach to assessing us:

  • InfluenceMap are entitled to make their own judgments about values and policy design, but theirs are not the only options. Their scoring system gives no weight to contrary views about the best policy design.
  • InfluenceMap are reliant on limited documentary evidence gathered on the internet from many other countries. They are unable to situate this evidence in the policy, political and cultural contexts that give it meaning. Their judgments are therefore often unreliable.

We welcome scrutiny – but we reject a scoring system that flies blind and appears to prize cheerleading over problem solving. Ai Group’s job is not climate advocacy, but dogged pursuit of our members’ long-term interests. It has long been our judgment that those interests are served by an effective global response to climate change, with Australia playing its fair part and pursuing a successful economy-wide transition to net zero emissions. We will continue to play a constructive role in line with that view.

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Tennant Reed
Tennant is Principal National Adviser – Public Policy at Ai Group. He has worked heavily on climate and energy issues, advising Ai Group’s Leaders’ Group on Energy and Climate Policy and developing reports on natural gas supply, energy prices and energy efficiency. He also works on a range of issues related to manufacturing and innovation. Previously he was an adviser in the Department of Prime Minister and Cabinet, working on fiscal policy, stimulus and infrastructure.

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