David Murray, the man tipped to be chosen by the Tony Abbott government to lead its review of the $5 trillion Australian financial services industry, has again dismissed the threat of climate change, and suggested climate scientists had no integrity.
In an interview on ABC TV’s Lateline Program on Wednesday, Murray – a former CEO of the Commonwealth bank of Australia, and former head of the $90 billion Future Fund – said the climate problem is “severely overstated.”
Asked what it would take to change is mind about the climate science, particularly in light of the recent IPCC 5th assessment report, Murray replied: “When I see some evidence of integrity amongst the scientists themselves.”
He said if he were in a leadership role, he would “set up some scientific approach to get a community consensus here about what is the truth on this matter.” This is despite the fact that every major scientific institution around the world, including the CSIRO, the Bureau of Meteorology, Australia’s chief scientist Ian Chubb, and the recently disbanded Climate Commission, accepts the science of climate change.
The Abbott government also supposedly accepts climate science, even it describes the link between climate change and actual events, such as bush-fires as “complete hogwash“. Murray is yet another key business appointee that is openly hostile to scientific evidence.
Tony Abbott’s chief business advisor, Maurice Newman, the former chairman of the ABC and the ASX, last month launched an attack against the CSIRO, the weather bureau and the “myth” of anthropological climate change.
Tony Shepherd, the man chosen to lead an “audit” of government expenditure, is also chair of the Business Council of Australia, which has thrown its weight behind the government’s move to repeal the carbon price.
This is despite its stated position being that emissions should be reduced at the “lowest possible price. That puts its new policy at odds with the conclusions of the Climate Change Authority and nearly every economist about the cost of Direct Action or not having a carbon price, and the BCA’s previous support for such a mechanism.
Murray’s likely appointment to head the first full scale review of the financial system in 17 years is problematic given his stance on climate change. The financial services industry is probably the most exposed to risk created by a changing climate, changing policy, and the likelihood of stranded assets as the world accelerates towards a low carbon economy.
A growing number of actuaries, advisors and investor groups are raising concerns that banks and funds managers are “flying blind” on climate risk because they are effectively ignoring the issue.
They argue that systemic reviews, be they in finance or resources of manufacturing, need rigorous attention to how the world is changing. Denying climate change is the wrong way to start.
“If the review does not consider climate change, it risks being redundant before the report is released,” said Nathan Fabian, the head of the Australian-based Investor Group on Climate Change.
The question now being put to industry leaders is how prudent is it to leave out an assessment of the financial risks from climate change?
But this is what Murray said on managing climate risk in the Lateline interview: “My view is that when faced with a potential risk, you manage it by looking at the size of the risk and the probability of it occurring.
“If you’re not sure on either of those fronts, then you look to measures you can take that would help you in any event, whether it occurs or not, but also if it does occur, ameliorate some of the risk. Now the way to deal with that was not to implement a carbon tax.”
Well, certainly not if your estimate is that there is no risk in the first place.
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.