Australia’s ex-finance minister is jetting across Europe on his leadership push, but will his government’s record fly?
Nearly two years before Mathias Cormann embraced the language of a “green recovery” and rapid net-zero emissions goals, the then finance minister’s government received a report rebuking it for Australia’s climate performance.
Australia remained one of the most carbon-intensive countries in the developed world, and would fail to reach its 2030 emissions pledge without major changes, the report warned. Among its many calls for action was “pricing carbon emissions more effectively”.
This critical report was not the latest offering from green groups or from some bunch of lefty activists but from the economic boffins at the Organisation for Economic Cooperation and Development (OECD) – the very body Cormann is now campaigning to lead.
While Cormann is seeking to burnish his economic credentials as Australia’s longest serving finance minister as he crisscrosses Europe in a Royal Australian Air Force plane, analysts say the government’s climate record could present a key obstacle to his prospects, given the OECD is dominated by European countries and it has long been arguing for stronger global action on the issue.
“On climate change, Australia’s record will not fly,” says Bill Hare, a veteran climate scientist, campaigner and the founder and chief executive of Climate Analytics.
“Governments are not stupid, they have highly intelligent officials and ambassadors who work out what is really going on and advise them. My real concern is that the attempts by the federal government and Cormann to essentially try and invert reality are really going to damage the Australian brand.”
In a sign the government – which has officially supported Cormann’s campaign – sees climate as a potential wrinkle, his promotional material makes clear that he too values the importance of environmental action.
As Guardian Australia revealed this week, Cormann has used a “vision statement” for the position to declare that pursuing “effective global action on climate change is a must and we must get to zero net emissions as soon as possible”.
This is strikingly different from his rhetoric in the context of domestic political debate as recently as February 2020, when Cormann accused the Labor party of making “extremist pronouncements” pledging to reach net-zero emissions by 2050.
“What I am saying is making commitments, meaningless commitments without actually properly assessing what the economic cost is, the impact on jobs, the impact on power prices and the impact on emissions, is extremist and irresponsible,” Cormann told Sky News at the time.
Cormann, when first announced as Australia’s nominee for the OECD position, argued that the political debate in Australia was not about the “what” but about the “how” of curbing emissions.
While leaving room in his OECD promotional material for different countries and regions to differ in their precise policy responses, Cormann promotes a vision where – under his leadership – “we can come together to share ideas about our collective green recovery effort on our journey towards a low-emissions future”.
There is no mention of the Coalition government’s previous repeal of the carbon pricing scheme that helped drive cuts in Australia’s emissions, nor its efforts – thwarted by the Senate – to abolish the Clean Energy Finance Corporation and the Australian Renewable Energy Agency. Picking up this thread, the Australian Greens have written to ambassadors of 36 OECD member countries excluding Australia to warn that selecting Cormann would be a blow to tackling climate change.
The OECD has long held a policy position that “putting a price on carbon is essential to drive the technological and behavioural innovation necessary to limit climate change”. Its analysis has suggested that market-based instruments like cap-and-trade emission trading schemes can “keep the costs of climate action low”.
Hare argues the OECD “has done a lot of good work on climate change, including thought and political leadership in recent years”.
“I think if you look at virtually anything that the OECD has published in recent times you would find that the government of which Cormann has been a senior minister is pretty much opposed to, or hasn’t done, or has no intention of doing [those actions],” Hare says.
“Now with the world looking at a critical decade ahead, with the fastest emission reductions in a most rapid period of energy transformation needed to meet the Paris agreements goals, it is impossible to imagine Cormann playing a constructive role in all that.”
It is possible, however, with the global economic downturn triggered by Covid-19, that member countries will have their attention focused on more immediate challenges.
Cormann has told OECD countries that, if selected, his agenda will include strengthening economic resilience, expanding global trade and investment, and designing “more effective, efficient and equitable” tax systems. He also pushes for liberal democratic values.
The material sent to OECD nations includes statements of support from a range of Australian business and political figures, including the prime minister, Scott Morrison, and the opposition leader, Anthony Albanese. The Labor leader described the Coalition figure as “a skilled negotiator with the ability to effectively engage across the political spectrum” and who is “known for being a man of his word”.
While there has been political controversy this week over the cost of Cormann’s travel, the government has defended the candidacy as important. The government has appointed a campaign taskforce of about eight dedicated staff, who are helping to schedule meetings, coordinate messaging and update the itinerary. Guardian Australia has also established Cormann is travelling with a doctor, a step that appears to be linked to Covid-19 precautions.
Cormann has already held meetings in Turkey, Denmark, Germany, Switzerland, Slovenia, Luxembourg, Belgium, Spain and Portugal since the beginning of November, and has further visits planned to Austria, the Slovak Republic, Hungary and France – plus trips across to the South American member countries of Chile and Colombia – to press his case.
If successful, Cormann would serve a five-year term as secretary general of the Paris-based OECD from 2021 to 2026. But he has strong competition for the role, with nine other candidates in the field.
The other candidates include Sweden’s nominee, Cecilia Malmström, who has strong links across the OECD’s European member states, given she served for four years as EU commissioner for home affairs before taking the role of EU commissioner for trade from 2014 until last year.
Malmström is one of seven candidates from European countries. America’s candidate, Christopher Liddell, is a senior official in the Trump White House and would appear unlikely to succeed after the presidential election result. Canada has nominated William Morneau, who, like Cormann, is a former finance minister.
The OECD selection processes are somewhat mysterious but will include a job interview-style meeting with member state ambassadors in France shortly. The OECD says the chair of the selection committee, UK representative Christopher Sharrock, will “carry out confidential consultations with individual members, in order to narrow the field of candidates and ultimately identify the candidate around whom consensus can be built for appointment”. A final decision is due by March.
Most of the talks are happening behind closed doors, so it is difficult to assess how Cormann’s message is being received during his European travels. While most countries are keeping their cards close to their chest, Luxembourg’s finance ministry said it had held “good discussions” with Cormann, while Slovenia’s prime minister said he found the Australian to be “a strong candidate”.
The rising cost of Cormann’s campaign – which the government has refused to reveal at this stage of the process – has led some people to question what Australia would be getting out of having Cormann in the top job.
On this point, the Department of Foreign Affairs and Trade maintains that the OECD is a “pillar of global economic governance and a core multilateral organisation” – but Australia has not yet played a leadership role there.
“If we want international institutions such as the OECD to thrive, we must step forward and offer to lead them,” a Dfat spokesperson says.
Dave Sharma, a Liberal MP and former Australian ambassador to Israel, says the potential leadership role is important for Australia. That is because the OECD is an important standard-setting body. It is one of several organisations, he says, that “underpin the ‘rules of the road’ for the liberal world order”.
“Having an Australian leading the OECD would ensure our values and viewpoints have a prominent role in helping shape the operating system and rules for the global economy for the decades ahead,” Sharma says.
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