They’re the troika of mandarins who have shepherded Australia into unchartered economic territory: imposing a price on a common pollutant. Their fingers are all over climate policy, from the carbon price to mass rural tree-planting. They are Martin Parkinson, Blair Comley and Ross Garnaut — and together these card-carrying economists take top spot as the most powerful driver of Australia’s low-carbon economy.
The Power Index has profiled business figures, lawyers, regulators and inventors (politicians were excluded) — why put the bureaucrats ahead of them all?
The low-carbon economy is emerging; its rules are still being written. If you want to know who by, read on. A market in its regulatory phase is a time for bureaucrats to dominate, and these three policy wonks have done a fair bit of the thinking, much of the drafting, designing and modelling, and most of the grunt work in getting Labor’s controversial climate policy off the ground.
The Power Index couldn’t pick between them. Climate elder Garnaut wielded heavy influence early, but his star has waned. Parkinson and Comley are ex-heads of the Climate Change Department and remain in senior climate-related posts. Parkinson made climate policy happen but his attention is now divided; Comley has current influence and may be tomorrow’s chief.
Just one problem. Have they stuffed it up?
The three are similar — trained economists who accept the climate science and pushed for a theoretically pure solution straight out of Arthur Pigou: internalise the externality wherever it is found, via a comprehensive carbon price. It’s a welfare economist’s wet dream.
Critics say the result was a prohibitively ambitious and complex scheme, a political ogre which was not pragmatic enough, and which the government — perhaps fatally — could not sell. The carbon price is unpopular and may be dismantled by a Coalition government come September. Perhaps the lesson for the next generation of Comleys is that politics really is the art of the possible.
Dr Garnaut was an economic adviser to Bob Hawke and ambassador to China, an academic and boardroom figure (complete with controversial mining ties) who came to climate late. He was federal Labor’s climate adviser from 2007-2011, delving into the science and proposing wide-ranging policies. Garnaut (and Parkinson) sat on Julia Gillard’s 2010 post-election climate committee which wrangled a carbon price deal with the independents.
Garnaut thinks big, he gave Labor’s climate push substance, credibility and economic heft — and when rent-seeking industry figures and climate deniers set up a hullaballoo, he took them on. He looks like a boffin, but Garnaut treats his critics like a street brawler with an excellent vocabulary. “Alan Jones is a manifestation of a serious degeneration of Australian media and political culture in the last few years,” he said recently. The Coalition dislikes him.
Garnaut recently helped with the UN’s review of the CDM (international carbon trading) and is an academic at the University of Melbourne. Watch his ruminations on China and climate change. Will he take up a senior international role in climate?
“Some of their solutions have looked good theoretically … but have not been practical.”
“He’s challenged assumptions,” said Erwin Jackson from the Climate Institute. Another industry insider described Garnaut’s influence as phenomenal, adding “everyone says he has a huge ego” (check out his 28-page CV). Garnaut is seen as professorial, in the old mould — “so British and reserved” as businessman Andrew Grant says.
Dr Parkinson joined Treasury in 1981 and headed up Kevin Rudd’s new Department of Climate Change from 2007; he joked he was the DCC in the early days. He was at the helm for the crucial years of developing the CPRS then the ETS. He became Treasury head in 2011, so is still involved in climate; Grant says he’s the most powerful climate bureaucrat “full stop”.
But would the Coalition demote Parkinson? Some Liberals think he’s too political in his defence of carbon pricing, but governance expert Stephen Bartos says new governments often keep Treasury secretaries. Parkinson has form in lobbying to keep his job under the Coalition.
A carbon finance source says Parkinson has “been consistent, and he’s got continuous outcomes. He’s smart, he’s persistent and he’s well read.” Another says he’s reserved but willing to listen.
Comley is Parkinson’s protégé. He joined Treasury in 1994, was head of the DCC from 2011-13 and, in a surprise move which set tongues wagging, was this month abruptly shifted sideways to head up the Resources Energy and Tourism Department (Subho Banerjee is acting head of DCCEE). RET is seen as a pro-fossil fuel “brown” department, though Comley retains power over some climate schemes. Can he green the place up?
Comley has more international experience and is seen as being more hardline than Parkinson. A technocrat, he’s known for being gregarious, bright and a talker. “I didn’t get a word in for an hour,” a source recalled about a meeting. And he’s won a scholarship to Harvard.
The troika’s future is uncertain. Shifting Comley may herald “machinery of government changes”; Labor axing the DCCEE, losing some bureaucrats and farming others out to RET and the environment department. The Coalition has already promised to do this. DCCEE staff are nervous. As for the Coalition, Prime Minister Abbott might retain Comley, perhaps demote Parkinson, and ignore Garnaut.
So that’s a cook’s tour of our mandarins (all declined to be interviewed for this story). Has their tight grip on climate policy been positive?
Erwin Jackson says yes; they see things from the “Treasury prism”, but applying the discipline and rigour of economists is a plus. Jackson reckons countries where Treasury is involved in climate policy get better results. But he thinks the dominance of Treasury can lead to “a certain level of short-sightedness”.
Industry analyst Rob Fowler says “the Garnaut/Parkinson/Comley combination has been useful because they’ve driven a lot of outcomes, but it’s been challenging”. Some of their solutions have looked good theoretically — like maximising the carbon price’s coverage — but have not been practical, Fowler argues. Yes, the textbook might recommend including farming in the carbon price, but given entrenched hostility from farmers and difficulties in measuring emissions, would it have been smarter to exempt it from the start? In the CPRS, did Garnaut and Parkinson deliver a scheme so complicated no one could understand it?
There are plenty of big-talking business figures with sustainability policies, but drill down into what they’re doing to cut emissions and you’ll see the market is largely run by the government, top down. It’s bureaucrats and regulators leading the charge, aided by a flotilla of lawyers, bankers, accountants and consultants. Watch this space though — come September 14, we may need a new list.