Climate Change and Institutional Self-fulfilment by Roger Underwood

I note that the Federal government has created a new agency called “The Department of Climate Change”. The department is not yet 10 months old, but is already well-established with a CEO, two assistant CEOs, four Divisions, thirteen Branches (including one devoted entirely to public affairs), and a large number of full-time public servants.

Given the current hysteria about global warming, and the plethora and complexity of emerging schemes involving carbon-trading, carbon-capping, carbon-off-setting, carbon-emission-minimising and carbon-taxing, I can understand why the government would want a single agency which can keep tabs on all this and drive their political agenda. I am also unsurprised to find that the department’s chief is an economist, and the ranks are studded with economists. This reflects the new focus of the climate change issue: no longer are governments seeking ways to reduce carbon emissions – rather they are seeking to identify the carbon-fighting measures which will have the least possible economic impact.

Nevertheless I am cynical about the creation of a new department whose budget, staffing, political influence and public status is dependent on climate change actually occurring. A Department of Climate Change needs climate change – no climate change will be (for them) a disaster. In other words, the bad-news scenario now has a bureaucratic home, its very own institution, a whole government organisation dedicated to promoting the prophesy of doom to its own advantage.

This phenomenon is not new. I was a junior officer in the Forests Department many years ago, and I recall how the environmentalists accused us of having been “captured” by the timber industry. They also accused the Mines Department of being captured by the mining industry, the Agriculture Department by the agricultural industry and the Fisheries Department by the fishing industry. (Curiously, they never saw any problem with the Department of Environmental Protection being captured by the environmentalist industry).

There is a difference between what the environmentalists call bureaucratic capture, and what I call institutional self-fulfilment. The former involves external influence on an agency by a special interest group to enhance its special interest; the latter is where an agency is working behind the scenes to ensure its own prosperity and survival. A classic historical example of institutional self-fulfilment was the work of the Rabbit Department in Western Australia. The Rabbit Department was created 100 years or so ago to wipe out the rabbit in WA. The agency grew rapidly, attracted a substantial budget, and undertook (on the advice of its senior public servants) a number of massive, expensive and ultimately useless projects. These included two “rabbit-proof” fences thousands of kilometres in length, the construction of which proceeded despite the fact that the rabbit was already west of the surveyed fenceline. I have talked to old farmers and pastoralists who regarded the department as a joke because it was well-known that departmental staff had no intention of eliminating rabbits. To do so would have been to do themselves out of a job. To make matters worse, the WA government (in the way of governments everywhere) was quite happy to come up with the one-off capital cost of building the fences, but not the recurrent costs of maintaining them properly. The fences became a joke amongst rabbits.

Similarly the bushfire issue in Australia is increasingly subject to institutional self-fulfilment. Bushfire responsibilities have been progressively transferred from land management agencies (who are concerned about fire impacts) to Emergency Services (who fight fires). Staff in Emergency Service agencies are trained and equipped for dealing with bushfire emergencies, not for management of the land where bushfires potentially occur. Don’t get me wrong – the firefighters do a great job, and are an essential community service. The trouble is, fire-fighting is their business, their raison d’être. Furthermore, it is well rewarded in terms of favourable media attention, a grateful public, political support and funds. But if there were no bushfires or an insignificant bushfire threat, the fire-fighting services would wither away. Thus their whole focus is on response after a fire starts, with investment in helitaks, water bombers, fire tankers, high tech equipment, super-gizmo headquarters, and lots of staff. What misses out is the essential but unglamorous work of damage mitigation, fire prevention, fuel reduction, fire trail maintenance, community education, law enforcement and so on, i.e., the year-in and year-out recurrent work of minimising the number and impacts of fires, and making them easier and safer to suppress. Far from being rewarded, fuel reduction burning is hated by environmentalists, who depict land management staff who carry out a burning program as irresponsible vandals, effectively undermining their political support. The way the current system is constructed, all the kudos go to the firefighters and none to the fire pre-emptors – a situation very well understood by Emergency Services chiefs.

It seems to me entirely predictable that the processes applying to rabbits and bushfires will also apply to the new Department of Climate Change. If it is to survive and prosper it will need rapidly to become a Department for climate change. I would be very surprised if DCC staff did not already realise that the security of their agency and their opportunities for recognition and promotion will be closely linked to the degree to which the media, community and politicians think that climate change is (i) imminent; (ii) disastrous; (iii) inevitable; and (iv) requiring the sort of complex economic and bureaucratic skills found only among the officers of the Commonwealth Public Service.

I can think of three ways all this might pan out. First, it might become apparent to everyone that climate change is a natural thing governed largely by non-anthropomorphic factors. Second, climate change caused by carbon dioxide emissions might be confirmed, but it will become apparent that there is little Australians can do that will make a significant world-scale difference, even with massive economic self-abuse. Third, the penny might drop that we have real environmental/social problems which demand urgent national attention, i.e., diminishing and more costly oil, management of water resources, declining air quality in cities and killer bushfires. Now there are four issues which each deserve their own Federal department with four divisions, thirteen branches and offices packed with beavering staff!

Roger Underwood is a West Australian forester and writer, Chairman of The Bushfire Front Inc.

,

24 Responses to Climate Change and Institutional Self-fulfilment by Roger Underwood

  1. Ian Mott May 23, 2008 at 9:44 am #

    Good post, Roger.

    When I first started monitoring the nascent greenhouse industry in the mid-1990s, the price of petrol was 56 cents a litre. All the policy discussion on the need for a carbon tax was predicated on a rate of about $40/tonne of carbon which would add about 7 cents/litre to the cost of petrol and a similar 12.5% increase in the price of coal and other carbon emitting products.

    This 12.5% increase was presented by both mice and men as a “tough but necessary” price signal to the market so emissions would be curbed to meet what was later to become the Kyoto targets.

    The only problem with this plan was that someone forgot to tell the Chinese and Indians about it. More importantly, nobody bothered to run it past a competent economist to determine how easily such a price signal could be gobbled up by inflation in a robust ezecredit economy.

    When the latest oil price rise flows through, it will produce local petrol prices of $1.70/litre. The increase in demand from China and India will have delivered the price signal equivalent of a 200% carbon tax to the world economy.

    More importantly, both China and India are capable of digesting a 10% inflation rate because their rate of economic growth is also of that magnitude.

    And that means the climate industry’s little $40/tonne carbon tax only amounts to a 4.1% price signal. It is a triffle that can be swept away by only 5 months worth of a 10% annual inflation rate.

    To have the same impact as was originally envisaged, the carbon tax would need to be $120/tonne and add another 20 cents per litre to the local price, a massive $1.90/litre.

    And there is not the slightest doubt that under those circumstances, under a Labor Government, there would be a massive wages breakout that will entrench inflation rates of 10% plus for decades to come.

    And the biggest losers will be those “ordinary working families” with savings in superannuation. Inflation always punishes those who save and rewards those who borrow. And the more it rewards those who borrow, the higher the inflation rate goes.

    Welcome to economic reality, folks, whether you realise it yet or not, the greenhouse indulgence party is well and truly over.

  2. Doug Lavers May 23, 2008 at 9:45 am #

    Wayne Swan et al already have the problem that any form of carbon trading will effectively represent a tax on energy, no matter how they try and gild the lily.

    This is extremely inflationary, and backs onto a surging oil price. The RBA is already contemplating further interest rate increases to curb inflation.

    How this new department, and the Government, tries to handle irreconcilable objectives will be fascinating to watch.

    What they should really be studying is the relationship between solar activity and the temperature of the planet.

    What has happened to Cycle 24?

  3. cinders May 23, 2008 at 10:12 am #

    Another solid post from Roger, with the benefit of the knowledge of how a government department works. Perhaps some one needs to get the Department a calulator as the following Budget initiatives don’t seem to add up.
    Key climate change initiatives totalling $2.3 billion over four years to address both mitigation of and adaptation to climate change were announced in the Budget, including:

    $1.0 billion to help Australians make their homes and their communities more energy- and
    water-efficient;
    • $260.0 million to Australian businesses to reduce their impact on the environment;
    • $1.7 billion to support Australia’s world-leading scientists, researchers and industry in their
    work to improve energy efficiency and develop clean energy options, including renewable
    energy and clean coal technologies;
    • $130.0 million to Australia’s Farming Future to deliver the Climate Change and
    Productivity Program, the Climate Change and Adaptation Partnerships Program, and the
    Climate Change Adjustment Program;
    • $8.0 million for Australia’s forestry industry to better prepare for climate change, including
    the development of a Forestry Adaptation Plan and assessment of capacity for forests to
    sequester carbon; and
    • $150.0 million for AusAID to strengthen climate change adaptation efforts, focusing on
    countries in Australia’s region.

    These initiatives are in addition to the $59.0 million to establish the Department of
    Climate Change to deliver on commitments including a national renewable energy target and an emissions trading scheme, including $37.3 million in funding for the Department to work on the design of the emissions trading scheme in addition to the $31.6 million previously allocated across government for work on
    emissions trading.
    Perhaps it would have been too much to expect a Department of Working Families!

  4. Steve May 23, 2008 at 10:54 am #

    The notion of institutional self-fulfillment is a good one, but lets not pretend it is so profound that it might apply just to climate change, or even just climate change and bushfires.

    Using Roger’s account, government in general – every department – should be regarded as somewhat self-fulfilling.

    I think this is true, so rather than focus on the Dept. climate change with all the ideological baggage and bias associated with this particular issue, the issue is the more important but also much more well known/discussed/canvassed issue of what is an appropriate level of power/influence of govt on society.

    I think Roger also neglects to highlight some of the checks and balances that exist in government to combat the kind of self-fulfilling activity he identifies, of which there are many.

    The most important is that we live in a democracy – don’t like the govt, vote in another one.

    But perhaps the more immediate/pointy measures to curb a govts excesses are things like (just a couple of examples):

    1. Treasury – while it won’t often be obvious to the general public, there is a never-ceasing and always boiling tension between treasury and any govt dept on how much money they spend, and treasury has enormous influence on the creation of new policy, esp if it involved an impact on the bottom line for the govt or the economy as a whole.
    2. The productivity commission – just today i heard them on the radio saying words to the effect of ‘if we bring in carbon trading, we need to ditch renewable energy support’ – a message that will be highly controversial for much of the environment movement.

    I guess my point is – be paranoid and skeptical of what government is up to, but don’t get carried away.

    Here’s my guess as to how it might pan out:

    Australia will act on climate change, probably with some economic harship. However, our action will generally be in accordance with the actions of other countries and in proportion to our particular responsibility. We won’t be saving the world single-handedly, but we will be contributing our bit.

    It always bothers me this ‘even if we act it won’t make a difference’ mentality, because it is is obviously ethically and intellectually incorrect – its like saying that because my tax payments make little difference to the Australian economy, I may as well not pay tax.

    Even for one of the biggest emitters – the USA – if they acted alone on climate change and no other country did anything we would still have a problem. The fact that one country’s action alone may not be the difference is not a reason for any one country to not act – it is a group effort.

  5. Johnathan Wilkes May 23, 2008 at 1:29 pm #

    Sorry Steve, kindest I can put it, you are an optimist!

    Just to the acting alone business, where did our cutting trade barriers unilaterally, get us?

    Despite of improving productivity as we were supposed to, we lost jobs, simply because there was not enough room for tech. improvement left in the system in the first place, to combat lower wages and import duties, elsewhere.

    Knowing our politicians, of either persuasion, this will be the same with AGW measures.

    If treasury were that powerful,(and smart!) we would never get into any economic mess.

    Yes we can vote pollies out, but the bureaucrats in the main remain, they have all the time in the world to make sure, that they do!

    If I believed in conspiracy theories, I would say “yes our governments are being dictated to by someone, because no politician can be that stupid!”
    Alas they can be and they are, most of them anyway!

  6. Green Davey Gam Esq. May 23, 2008 at 2:05 pm #

    I like the way things often link together in threes. There are links between rabbits, bushfire, and climate change. In the 1920s and 1930s rabbits ate out the fine fuels in parts of Western Australia, so changing the nature and frequency of bushfires. It has been suggested that the general decline in burning since whitefella (and rabbit) arrived has altered the atmosphere. The smoke used to dim the sun a bit in summer.
    If Mr Rudd had only invited me to his ‘best and brightest’ conference, I could have suggested a Ministry of Bunnies, Bushfires and Climate. What went Wong?

  7. Paul Williams May 23, 2008 at 4:25 pm #

    “What went Wong?”

    We’ve already got an ABC, we don’t need a BBC as well!

    Our Department of Climate Change is hoping we will meet our emission committments by using Greenhouse Friendly™ companies such as BP, Qantas, Jetstar and Cascade.

    http://www.greenhouse.gov.au/greenhousefriendly/products/index.html

    These companies are engaged in mysterious (but “approved”) Greenhouse Friendly™ “abatement activities”. So that’s all right then.

    Abatement Providers should do a “Greenhouse Friendly™ Emission/Abatement Study” for their project.

    http://www.greenhouse.gov.au/greenhousefriendly/abatement/measurement.html

    This is good stuff! I’m feeling cooler just reading about it.

  8. Paul Biggs May 23, 2008 at 5:24 pm #

    No need for all this expense and staff – King Canute simply has a throne placed in the sea where he could sit and command the waves to retreat.

    Why not just sit Kevin Rudd in a office chair in the sea? Cheap and equally as effective as a ‘Climate Change Department.’

  9. Paul Williams May 23, 2008 at 6:41 pm #

    “Why not just sit Kevin Rudd in a office chair in the sea?”

    That would be just as effective, and cheap, but I get the impression from reading the Department of Climate Change website that there is a LOT of money to be made from these Greenhouse Friendly™ Abatement Activities. The gravy train is just building up steam. (With the approved abatement activity to offset any emissions, of course).

  10. wjp May 23, 2008 at 8:13 pm #

    Paul: Sorry mate, but King Canute was smarter than that. It was all the fawning courtiers that insisted that, he, King Canute, was so great he could make the sea retreat.
    To his credit he was not a Kwudd!

    http://www.viking.no/e/people/e-knud.htm

  11. Paul Biggs May 23, 2008 at 9:49 pm #

    I know – Canute was demonstrating that even a king (or a Krudd) has no power over natural forces.

  12. rog May 23, 2008 at 10:57 pm #

    Steve says “Australia will act on climate change, probably with some economic harsdhip”

    There is already economic hardship, the pre election promise to ease the burden of rising food and housing costs to working families has been abandoned; Rudd has said that he has done all that he could physically do to ease prices.

    Voters will remember this gaff, hardship is not a “core promise”

  13. rog May 23, 2008 at 11:00 pm #

    The ALP has also moved to cap subsidies on solar panels, strangely enough

  14. Denialist Scum May 24, 2008 at 4:15 pm #

    “The ALP has also moved to cap subsidies on solar panels, strangely enough”

    What a great idea — probably indicates that they are getting serious about renewable energy.

    Do the maths — 7 million households in Australia. Multiply by $8,000 gives $56 billion.
    Double that when you consider installation and ancilliary costs. How may (24-hour) solar-thermal or geo-thermal power stations could be built for $112 Billion?

  15. rog May 24, 2008 at 4:34 pm #

    ??

    By applying a means test to the subsidy they have reduced the incentive to instal solar

  16. Denialist Scum May 24, 2008 at 4:52 pm #

    The other way of looking at it is that the removal of the subsidy will help to make the solar industry more viable.

    All that a subsidy every achieved was to drive the price up by the amount of the subsidy (think: child care, health insurance, 4c petrol dockets, etc, etc).

    Now, instead of merely gouging the additional $8,000 the solar cell companies will be forced to develop and market more efficient technologies if they want to stay in business.

    Maybe this will be what is needed to get Origin Energy off their backsides and bring their sliver-cell technology to market, instead of simply pushing the old inefficient stuff out the door and banking the subsidy.
    http://www.originenergy.com.au/1233/SLIVER-technology

  17. Johnathan Wilkes May 24, 2008 at 4:52 pm #

    Denialist,
    “How may (24-hour) solar-thermal or geo-thermal power stations could be built for $112 Billion?”

    Provided this is what they had in mind, I totally agree with you.
    However I doubt their reasoning was the same as yours!

  18. Denialist Scum May 24, 2008 at 5:04 pm #

    Johanthan,
    I share your doubts.

    However – there is only 1 thing I am sure of: politicians will do whatever they think there is a vote in. I doubt Krudd is losing too much sleep about losing votes he never had of the people who will no longer qualify for the subsidy, so they might as well use the money more productively while they can.

    On the other hand, as more people grow a brain and realise that domestic solar PV is a complete waste of money vis-a-vis more effective renewable technologies such as solar-thermal and others, and start making their opinions known – then politicians will start to pay attention.

    In the meantime, you can’t blame them for not developing sensible renewable energy policies if no-one is providing them with sensible advice. (Thoughts of putting sulphur into the atmosphere spring to mind, as an example).

  19. rog May 24, 2008 at 6:00 pm #

    Denialist scum predicts that people will grow a brain without exhibiting any evidence that he is willing to follow his prophecy.

  20. Keiran May 24, 2008 at 8:52 pm #

    Is much being done in Australia to investigate deriving biodiesel from algae grown in CO2 enriched air like right near lovely coal fired power stations. This could help these carbon guilt ridden types two fold although somehow they may still feel this to be quite sinful.

  21. Aynsley Kellow May 26, 2008 at 8:11 am #

    Roger,
    There is, as you argue, a danger in establishing an organisation dedicated to a problem, particularly of what Langdon Winner once referred to as ‘reverse adaptation’ – the adaptation of ends to available means.

    The classic example of this was electricity planning in the days of state-owned, independent utitlities, such as the Hydro-electric Commission of Tasmania. In a book on this topic, I referred to their forecasts as ‘self-prophesying fulfilments of bureaucractic ambition.’

    The best recent example of this is, ironically, the Stern Review. Take an unbelievably low discount rate (estimated at 0.1% by Dasgupta, Nordhaus, Tol, etc), add a totally unrealistic 2%pa real increase in damage from extreme weather events and perform a very long run analysis. Conclusion: the furure costs are so large that they justify extreme action now. Leak the findings over a weekend, release on a Monday with no prior embargoed circulation of the document to the media at a press conferecn where no questions are taken, and you get widespread acceptance of the ‘findings’ before the critiques come in. Just don’t tell anyone that half the costs that justify action no come after the year 2800!

    Stern might have been rewarded by Brown with a peerage for providing such a noble justification for a bunch of green taxes, but recent British politics (local goverment elections and the Crewe by-election) suggests that the public is not quite so easily convinced.

    This is why philosopher Paul Feyerabend was so opposed to ‘official science.’ We need ‘counter institutions’ (or brave souls prepared to stick their heads above thhe parapet and question the official line).

  22. Ian Mott May 26, 2008 at 9:31 am #

    Do you mean Stern still isn’t in jail yet, Aynsley?

  23. Aynsley Kellow May 26, 2008 at 10:00 am #

    Ian,
    Stern is ‘sound’, as they used to say in ‘Yes, Minister’, just as Garnaut is ‘sound’. Neither really has any research record in the area. Garnaut is a very good international and resource economist, but you will struggle to find any publications on climate change economics on his cv. If you wanted genuine expertise in this are you would have chosen Warwick McKibbin, who is an internationally regarded expert with a list of publications as long as your arm. But he’s probably not considered ‘sound’.

    Rudd was very clever in commissioning his review last year. It was commissioned (and paid for) by the state ALP governments and charged with reporting to them and (if requested) the state governments. No real capacity to swim against the tide, even though the Productivity Commission has been giving him some food for thought – even a critique of Stern.

    Apologies for the typos in my last post: Should have been, for example, ‘Just don’t tell anyone that half the costs that justify action no come after the year 2800!’ I know you can figure it out, but I’m not too flash with a bowl of meusli in hand!

  24. Denialist Scum May 26, 2008 at 6:02 pm #

    “Rudd was very clever in commissioning his review last year…”

    Yes – but why chose another economist to do another review? I suspect it has to do with the old story about economists:

    A mathematician, an accountant and an economist apply for the same job.
    The interviewer calls in the mathematician and asks: “What do two plus two equal?”
    The mathematician replies: “Four.”
    The interviewer asks: “Four, exactly?”
    The mathematician looks at the interviewer incredulously and says: “Yes, four, exactly.”
    Then the interviewer calls in the accountant and asks the same question: “What do two plus two equal?”
    The accountant says: “On average, four – give or take ten percent, but on average, four.”
    Then the interviewer calls in the economist and poses the same question: “What do two plus two equal?”
    The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says: “What do you want it to equal?”

Website by 46digital