Economics

Can we share (some of) the costs of climate change

Its direct costs on our economy are high and rising. How should they be shared?

Anyone taken in by Trump’s assertion that climate change is “the greatest con job ever perpetrated on the world” or that it is too costly to do anything about it, should come to Australia to see its economic effects. To quote from the Insurance Council – it would be hard to imagine a less “woke” outfit – in its Insurance catastrophe resilience report:

New data from Munich Re’s NatCatSERVICE global database shows that among comparable developed nations, Australia has on average ranked at least second highest for economic and insured losses per capita from extreme weather events from 1980–2020. Only in the past five years have we been overtaken – and that’s due to the outsized impact in New Zealand, with its comparatively smaller population, of the 2023 Auckland floods.

In the 1980s the economic cost of climate-related damage in Australia was $US60 per head, of which $US19 was covered by insurance. It is now $US193, of which $US109 is covered by insurance. That comes to something like $A4 billion picked up in our insurance premiums, and another $A4 billion of uninsured damage.

Those are the direct costs of extreme weather events – the easily-traced costs. They don’t include the costs of shifting rainfall patterns, the costs of heat-related disease, or the costs of investments never made because of climate uncertainty to name three costs that don’t show up in graphic TV footage of floods and fires.

These direct costs are concentrated, particularly among those who can no longer afford insurance.

The Insurance Council calls for a number of policy responses – better land use planning, investment in infrastructure to avoid damage, and reduced taxes on insurance.

The broader question is about how we share those costs. The Insurance Council recommends more investment in the Disaster Ready Fund, but perhaps we should go further in sharing those costs. Many Australians who have made decisions about building houses or business premises would have been reassured by an earlier prime minister’s confident assertion that “climate change is crap”. Because Australians elected the government who gave that false assurance, they surely have some collective responsibility to share in the costs of its consequences.

The anti-renewable misinformation industry

People with disdain for Australia’s interests are usually behind well-organized “environmental” protests against renewable energy projects.

If you live in a city you will surely have seen, or perhaps even participated in, some community protest about a change in land-use, a change in traffic flows, or a new commercial development.

So too are many people in non-metropolitan regions apprehensive about wind farms, batteries, transmission lines, and solar farms. Sometimes their objections are based on real unforeseen consequences – new transmission lines in cropping and horticultural regions can rule out aerial crop dusting. Sometimes their objections are based on roughshod and disrespectful attitudes of developers: in this regard some renewable energy companies seem to have inherited their culture from the mining industry.

But often their objections are based on or reinforced by misinformation – about whales’ fatal encounters with offshore wind towers, vast areas of cropping land being covered with solar panels, or strange radiation from batteries.

Book

When these protest movements go beyond a few town-hall meetings and demonstrations with home-made placards, and into more expensive messaging – such as giant billboards, expensively-printed booklets, and paid TV advertisements, it’s a fair bet that the money hasn’t been raised from cake stalls or chook raffles. Outside money is probably involved.

That’s a message in Jess Davis’s post on the ABC website Donald Trump's “climate hoax” comments belong to a well-resourced playbook landing on Australia's shores. The main part of her post is a review of Ed Coper’s book Facts and other lies: welcome to the disinformation age. Coper warns that "There are enormous global efforts underway to erode social licence on the energy transition”.

Davis traces the network of dark money financing so-called “environmental” campaigns against renewable energy projects, particularly wind farms.

Misinformation campaigns about renewable energy are effective in raising doubt and anxiety. She cites work by academics from the University of Queensland who surveyed people’s beliefs about 22 statements on windfarms and electric vehicles. A sample of those beliefs:

A similar message is in Karen Barlow’s Saturday Paper article News Corp and Advance called to misinformation inquiry, which is more specifically about the right-wing activist group Advance and the Murdoch media’s role in spreading misinformation.

Confirming Davis’s point about the effectiveness of disinformation campaigns, Barlow refers to a 2020 study by the University of Canberra, which surprisingly found that “Australia ranks third in the world for climate denialism, at 8 percent of the population, behind the United States (12 percent) and Sweden (9 per cent). The global average is 3 per cent”.

There’s probably a multiplicity of reasons for Australia’s prominence in absorption of climate change misinformation. Since the 2013 election the Coalition has run strong campaigns, initially denying the existence of climate change, before morphing into a torrent of lies and misinformation about renewable energy. Our large deposits of coal and gas have allowed the fossil fuel lobby to link action on climate change with supposed damage to the Australian economy. And there are global interests, ranging from multinational oil companies through to Putin’s Russia, who are fearful about the demonstration effect of a country’s successful transaction to net zero. The misinformation industry has brought together an unholy alliance.

The question of misinformation about climate change is the subject of a current Senate Select Committee on Information Integrity on Climate Change and Energy. Among its terms of reference are:

Gambling – now the heat is on the government

After almost two years of inaction on gambling, will the Four Corners exposure of sleaze, theft and government neglect prompt a response?

The harm of loosely-regulated gambling has been a recurrent theme of these roundups, particularly since the publication of the 2023 Commonwealth House of Representatives inquiry into online gambling You win some, you lose more, known as the “Murphy report” in memory of its chair, the late Peta Murphy.

Monday Night’s Four Corners episode Losing Streak is the latest prod to a government, under the thumb of the gambling industry, that has used every flimsy excuse imaginable to push the Murphy Report’s findings and is 31 recommendations under the carpet.

If the parliamentary “opposition” had any guts it would be hammering the government to move on the Murphy recommendations. That would be a vote winner, but the Liberal and National Parties are just as much in the thrall of big money interests in football and gambling as Labor, and they dare not upset the Murdoch media.

That is why the only strong voices in Parliament pushing the government on gambling are the independents, whose voices are prominent in the Four Corners program. (If we are to have an “opposition” why do we not give that title to the independents and minor parties, people who have some policy ideas and moral courage, rather than to the mob in the remnants of the Liberal and National Parties? But that’s another matter.)

On that Four Corners program we heard Peter Vlandys roll out a warning about the imposition of a “nanny state ideology”. But as Thomas Schelling demonstrated in the work that earned him the Nobel Prize in economics, there is no incompatibility between the liberal principle of free choice and our approval of regulations built around the conflict between our immediate temptations and our long-term interests. Is Vlandys arguing against compulsory superannuation, for instance?

Those calling for action aren’t the Protestant wowsers who once condemned meat raffles and bingo games. Rather they are people who want to see a restoration of practices that previously contained gambling to domains where people could enjoy it while being somewhat protected against its harms. Races were held on Saturday afternoons, and were social occasions. Raffles and prize wheels were an aspect of community fairs. The convenience stores selling lottery tickets didn’t offer VIP treatment and free tickets to keep people gambling. The technologies than have allowed gambling to become a 24/7 activity can surely be harnessed to return it to its previous contained social space.

At one level the Four Corners episode is about exploitation of the vulnerable by unscrupulous people in an almost entirely unregulated industry. In itself that’s a story of reprehensible neglect by governments, particularly the Commonwealth government.

It’s a story about how we choose to ignore the misery inflicted by gambling that’s run out of control. We underestimate its damage, and if we have the fortune to enjoy a high income we can get through life without ever seeing a poker machine or being hounded by a spiv encouraging us to bet on a football game.

But it’s also a story about how entertainment – gambling and football in this case – have been transformed from activities of amusement and enjoyment, to become billion-dollar enterprises, with all the accompanying opportunities for corruption and exploitation.

If we closed down all the sports betting companies, threw the poker machines into metal recycling, stopped spending scarce public money on billion-dollar stadiums, and closed the casinos, people would still be playing and watching football, eating and drinking in clubs, and enjoying the occasional bet in safer circumstances. And the people now taking six- and seven-digit pay packages from gambling and sport lobbying might have to find useful jobs.