Is tobacco a history lesson for climate change?

You'll be hard-pressed to find someone willing to argue the medical benefits of smoking tobacco, but that wasn't always the case. Between the 1930's and 50's plenty of doctors advocated (and even prescribed) smoking. By the 1950's, however, lung cancer had already became the most diagnosed cancer in American men. When the body of research started to stack up, advertising began insinuating rather than referencing doctors' support for it; and later - bereft of supporters - the industry took up the case itself in building a counter research base.

In the 1980's Philip Morris spearheaded the 'Whitecoat Project', with a specific aim of paying for scientific research to counter the body of evidence, to change the policy direction, public sentiment, and potential manufacturer liability around cigarettes. The successful intention was to then recruit other manufacturers to join.

Research on the anthropogenic nature of climate change, like health impacts from tobacco, has provided an inconvenient headwind to some industries - and some political parties globally. Professor Naomi Oreskes, science historian at Harvard, has published extensively on the topic, including on the direct involvement of some oil majors on propelling climate change misinformation. The significant weight of scientific consensus now, of course, makes funding climate science that counters the anthropogenic basis reasonably unrewarding, and thus we've seen a pivot.

As I've argued in prior posts, we've spent a fair amount of time contesting that a clean, green, future is one to aspire to; and that the certainty on the impacts of unmitigated climate change should provide adequate impetus to see capital and political shifts in that direction. Whilst we have, of course, the speed and scale to date doesn't appear to be enough to avoid climate change's catastrophic impacts. Thus, we're once again seeing calls for 'more action'.

In Australia, we have a partisan view on the quantum of decarbonisation of the economy by 2030, though both major parties align on a longer-term trajectory that's "in accordance with Paris". Of late, this has moved to become an economic consequence debate of such a move, not an environmental effectiveness one. Alas, like the tobacco misinformation, I think we're missing the point: we already know the world is better off economically from deep, early, decarbonisation. Building on a body of leading economists' findings, Tom Kompas et al. (2018) showed using country-scale computer general equilibrium (CGE) modelling that at a global level even attributing modest impacts from a climate impacted future, aligning 'to Paris' would have a net US$1.7 trillion benefit.

Why, then, are we seeing recent modelling in Australia contesting this?

As an example as to why this might be the case, I'll talk about other research: Westpac NZ commissioned us to carry out CGE modelling and analysis on different climate policy scenarios; the results showed that taking earlier, planned action on climate change under the central scenario was modelled to save NZ$30 billion in GDP growth by 2050 compared with the shock scenario, and resulted in a 32% lower carbon price by 2050. Work completed earlier for Westpac in Australia showed similar outcomes for GDP over the longer-term, but acknowledged that near-term GDP growth could be reduced from taking early action. The rewards, we showed, are made from the investment. Research released this week by BAE economics show that in Australia the differential implications of more stringent GHG emissions reductions by 2030 lead to a contrary view, however.

I am not here to criticize the research, but to draw out the implications of the assumptions and timeframes used. What's the question we want the answer to?

We currently view climate change as a longer-term issue, and economic productivity and company value-creation as a near-term issue; and there's the rub.

I think we need a balanced approach to considering both the costs and merits of action of climate change. I believe if you take an inter-generational view, the investments today are not only required, they're ultimately rewarding.