Climate change must be put on the front burner

Stephen McGrail
January 25, 2007
The Age

IF THERE is one issue that is forcing most businesses to think seriously about the future, it is climate change.

It is generating increased uncertainty. Australian companies wishing to plan effectively need new tools, processes and thinking to adapt and succeed.

For most of last year, one could understand companies considering climate change to be something they would worry about later, or as something for others to worry about.

Today, the context is different. This year, a "low-carbon future" is increasingly the priority of all: public, politicians and businessmen.

Waves of change are building that could join forces to become, in the words of futurist Jim Dator, "tsunamis of change". To Dator, people and organisations are too often standing with their backs to the metaphorical waves as they gather pace and become unforeseen tsunamis.

Consider these "three Ls": legislation, litigation and liability.

New climate change legislation has been recently proposed or passed by British Prime Minister Tony Blair, California "Governator" Arnold Schwarzenegger and in South Australia by Premier Mike Rann.

Rann's bill, the first of its kind in the southern hemisphere, introduces targets, a commitment to reducing greenhouse emissions and other programs and initiatives. Victoria won't be far behind, with Labor pledging similar legislation in the recent state election. This is only the start.

There has also been a gathering wave of the second "L", litigation.

Last September, California began legal action against the "big six" car companies. The action has been hailed as the most significant piece of climate change litigation. If successful, it will set an important legal precedent.

While the car industry is trying to play it down, some experts claim that if a big polluter knew it was damaging the environment and persisted, regardless, or denied the knowledge, it could be found as guilty as the tobacco giants that tried to hide what they knew about cancer.

In Australia, the NSW Land and Environment Court recently found that Centennial Coal, which planned an open-cut coalmine in the Hunter Valley, failed to assess properly its environmental impacts by not including a global warming assessment.

The judge found a connection between coalmining and climate change. Green groups were delighted, while the local Labor MP went ballistic at the news, claiming "extreme environmentalists are launching a jihad against the (coal) industry". This decision also gives real legal meaning to the principles of sustainable development embedded in many state and federal acts of Parliament.

It is worth noting that the Carbon Disclosure Project has been warning about the possibility of such litigation and multibillion-dollar climate change lawsuits for many years.

Our last "L", liability, is just as crucial. Companies need to understand and mitigate the potential for crippling financial carbon liabilities.

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