An unlikely new climate champion flexes some billion dollar muscles

open cut mine, Australia

The front page cover of every major newspaper in Australia today is spread with the unlikely statement that Marius Kloppers, CEO of BHP Billiton, supports action on climate change. More specifically, he supports a carbon tax.

“We do believe that such a global initiative will eventually come and, when it does, Australia will need to have acted ahead of it to maintain its competitiveness,” Mr Kloppers told an Australian British Chamber of Commerce lunch in Sydney.

“Carbon emissions need to have a cost impact in order to cause the consumer and companies to change behaviour and favour low-carbon alternatives.

“We all recognise this is a politically charged subject. No government relishes telling people that things need to cost more.”

Kloppers

He recommended an approach which combines a carbon tax, land use actions and a limited emissions trading system, which could apply to electricity generators. Pointing out that Australia’s energy production is the highest among OECD countries in terms of carbon emitted per unit of energy, he further stated (somewhat incredibly, for someone who sells coal) that ”Australia will need to look beyond just coal towards the full spectrum of available energy solutions. ”

His comments are timely, and contribute significantly to a debate that is commonly constructed as greenies versus business. His public acknowledgement that climate change is human induced and that we need to mitigate it puts the pressure on stalling politicians like Abbot, which can only be a good thing. Greens climate change spokeswoman Christine Milne expressed guarded appreciation of his comments, saying: “I welcome Marius Kloppers’ acknowledgement that a carbon price is inevitable, and that Australia should get moving on it, but it will be the parliament in charge of designing a scheme this time – not lobbyists in ministerial offices”.

It’s not unthinkable that the CEO of a mining company would come out in support of carbon trading. After all, coal mining does not form the totality of BHPs mining operations and they have a business interest in keeping policy rolling along. As the likes of Kloppers and Malcolm Turnbull point out, much of the business world knows that a carbon trading system is inevitable and waits impatiently for the government to get on with it.

But there is something strange about this situation. If you follow what I will call the climate change ‘chain of understanding’ from its starting point of acknowledgement that ‘climate change is 97% likely to be human induced’, the logical line of reasoning would be to wander down the path of ‘accelerating already unsustainable global consumption of fossil fuels is probably a little silly’, to be lead eventually to the conclusion that ‘pulling finite, polluting resources out of the earth and using them all up as quickly as possible in order to make a profit is probably not the right thing to do.’ And yet, this is what BHP Billiton does; they sell as much crude oil, coal, iron ore and other finite minerals as they can find, as fast as they possibly can. It’s the entirety of their existence. Indeed, they announced earlier this year that they will be expanding their mining operations in Australia to meet growing demand for resources in China. Apparently shifting to a low carbon economy in Australia does not include selling less coal to other countries.

The philosophy of leaving resources for future generations to use is central to the mind shift we need to deal with climate change. It’s also completely at odds with the ‘we have a right to grow our profits unhindered at any cost’ mentality of the mining industry in its current form. It’s this sense of righteous entitlement that reared its ugly advertising campaign head when the government tried to implement the super profits tax. And it hasn’t gone away; Kloppers reiterated it again at the lunch yesterday, using his platform to warn against reopening negotiations on the tax with the Greens and Independents.  

It’s great for the environmental movement that Kloppers and BHP have thrown this much needed support for action into the political mix, even despite their well funded disrespect for the democratic process. Kloppers seems to genuinely care about the issue. The positive impact that someone in his position who cares can have is enormous. Having business acknowledge that they are accountable to society (not just to shareholders) and embedded within the environment is crucial if we are to progress to a more sustainable and equitable world.

It will take a lot to change the economic landscape so that companies like BHP don’t just mine as fast as possible, leaving nothing for our grandkids. Including the real cost of environmental degradation through taxation is a start. Regulatory reform is central to this process, as is ethical investment, long term planning and measurement, the ‘internalisation’ of the real social and environmental costs of production, and government fostering of emerging green industries and businesses. Above all, we need to shake off the destructive short termism that dominates business and government policymaking. Central to this is the neccessary reshaping of our economic system into one that rewards environmentally and socially responsible business practices, and punishes those companies who prioritise profit over their real planetary legacy. Our current system, perversely, does the opposite of this.

Despite considerable advances made in corporate social responsibility over the last two decades, we still have not truly grasped that the significant challenges we face require a response much stronger than cosmetic voluntary schemes entered into by companies like BHP that have a mandate to become increasingly unsustainable.  Individuals like Kloppers can assist in pushing the debate along, but the real problems are systemic and need to be addressed as such.  I can’t help but wonder if Kloppers really understands that for his industry, sustainability and expansion are actually mutually exclusive and entirely incompatible. As progressive as he might be, I can’t see him agreeing to mine less and more slowly, to leave mineral resources for the next generation. But then, why should he? We aren’t asking him to.

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