As reported in
today’s Oz
the chief executive of Australia’s largest insurance company,
IAG, Michael Hawker has asserted that the extreme weather that has been
sweeping the world will raise insurance costs in affected areas to a point where
people will no longer be able to afford insurance
coverage. Hawker drew a
direct connection between extreme weather, like Cyclone Larry in Northern
Queensland and Hurricane Katrina in New Orleans, and global warming, stating
that “there has been almost a linear increase in catastrophes occurring since
global temperatures started rising in the early
1970s”.

Also reported
in the Oz,
Hawker is part of an impressive group of worthies called the Australian Business
Roundtable on Climate Change, including Westpac chief David Morgan, managing
director of Origin Energy Grant King, BP Australasia chief Gerry Hueston, head
of Visy Industries Harry Debney, and Keith Scott, Australian chief of
reinsurance company Swiss Re.

The members of the group, which has been
meeting for several years, released a report entitled the Business Case for
Early Action, suggesting that the Australian government aim to reduce greenhouse
gas by 60% by 2050. The proposals
listed in the report, including the establishment of a carbon price signal (ie.
tax), elicited a speedy response from the mining industry, with Macarthur Coal
saying the industry has invested millions of dollars into the development of
low-emission technologies on a voluntary basis.

In Henry’s
experience, and over 200 years of thinking by economists, pricing signals are
required to change most habits. Relevant pricing signals are of course required
to alter the polluting habits of industry. Voluntary actions are welcome, and
will be rewarded in heaven, but are certainly unable to bring about significant
change in the real world we inhabit.

We note that
Henry’s writer Louis Hissink suggests that the whole shebang of climate change
is exaggerated and misunderstood, arguing here that
it’s impossible to predict future climate states by computer modelling, and here that
the so-called consensus on climate change is a fallacy. He may be right that
some methods are sloppy and causes may be in part natural, not all due to human
activity, but Henry is with the worthies of Australian business in their call to
action.

Readers may be
interested to learn that Morgan Poll data shows
that 35% of Australians over 14 years of age believe global warming is the most
important environmental issue facing the world today, followed by the greenhouse
effect/ greenhouse gases (15%).

Read more at Henry Thornton here.

Peter Fray

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