By MILLIE MUROI, Economics Writer
If there’s one thing that ChatGPT has taught us, it’s that what we get from it is heavily dependent on the goals we set and the boundaries we spell out for it.
The chatbot is not always predictable (and sometimes outright wrong), but it often works much better when we give it specific targets and clear confines to work within.
We humans are remarkably similar. Most of us like to think we make good decisions with the information we have. We even have a field that looks at optimising our choices: economics.
Yet, we make plenty of bad decisions daily and, when it comes to the environment, over many decades, despite knowing better.
It’s why former Treasury secretary Ken Henry, who led possibly one of the best-known reviews of the Australian tax system, is so furious.
He has previously described our failure to manage our natural resources as an “intergenerational tragedy”, “intergenerational theft”, and a “wilful act of intergenerational bastardry”.
“I guess I’m in danger of running out of printable descriptions to convey the gravity of the situation,” he admitted in a speech to the National Press Club this week.
It was in this speech, too, that Henry pointed out why we seem to be failing so badly at protecting our environment.
Opposition Leader Sussan Ley and Social Services Minister Tanya Plibersek – both former environment ministers – have spoken about the need to fix our national environment laws.
And, after an independent review led by the former chair of the competition watchdog Graeme Samuel recommended a series of big reforms in 2020, both ministers – from opposite sides of the political fence – promised to act on them.
“Yet here we are, in the winter of 2025, and nothing has changed,” Henry points out.
That’s despite the clear warning signs and relatively broad support for such change.
Could it be that political focus has shifted to the economic issue of the day? Treasurer Jim Chalmers, having moved past inflation, has made it clear the government’s second term will be focused on boosting the country’s lagging productivity growth. Never mind the existential issue we face.
But as Henry points out, even if productivity is our focus, no reform is more important to the country’s ambition to pump out more of what we want (with less work hours or materials) than environmental law reform. “If we can’t achieve [that], then we should stop dreaming about more challenging options,” he says.
There’s been no shortage of activity on environmental reform – from policy papers to bills and endless rounds of consultation – yet little to show for it.
Henry rejects the idea that this “policy paralysis” comes down to a conflict between climate warriors and those wanting to charge ahead with economic growth. If this were the case, then why, he asks, is the pace of environmental damage speeding up at the same time our economy is stagnating?
Henry acknowledges reforms won’t be easy. Businesses and politicians are good at seizing moments of uncertainty when new changes are floated to send those changes to the graveyard.
For some, he says, the stakes are high: “We have whole industries with business models built on the destruction of the natural world.”
But we’ve done hard things before. And Henry points out it’s now or never.
While Prime Minister Anthony Albanese and his team won’t want to hear it, changes have to be made within this term of parliament.
The Labor Party may have been swept into a second term in power with a huge majority despite doing little to improve environmental laws. However, the growing national vote for the Greens is solid proof that voters have more appetite for environmental reform than the major parties have been serving.
Many of these reforms are clear and supported by a wider range of people with different interests.
So, what reforms are we actually talking about?
Well, Graeme Samuel’s review made 38 recommendations. But a big focus was on fixing what’s known as the Environment Protection and Biodiversity Conservation Act, which Samuel said was complex, cumbersome and essentially powerless.
Samuel’s suggestions ranged from introducing a set of mandatory National Environmental Standards and enforceable rules to apply to every environmental decision made around the country. These standards would be detailed, based on data and evidence, use clear language and leave very little wriggle room.
He also recommended wiping out all special exemptions and moving from a species-to-species and project-by-project approach, to one that focused on the needs of different regions: areas that shouldn’t be developed, those needing to be revived, and those where development assessments could be waved through more quickly.
This would help give businesses greater certainty, but also help us overcome one of our biggest shortcomings.
Because nature is so vast, when we assess the negative environmental impact of one project at a time, it will often seem tiny and irrelevant. That leads us to underestimate the environmental damage we are allowing over time, especially in particularly vulnerable ecosystems.
The remarkable thing is that Samuel’s recommendations were – and still are – widely supported by both business and environmental organisations.
Yet, there has been no movement five years on.
That’s a problem because there are plenty of big projects we need to get cracking on: huge investments in renewable energy generation and the government’s ambitious target of building 1.2 million homes by 2030.
In 2021, assessment and approval of a wind farm or solar farm blew out to 831 days – up from 505 days in 2018.
And between 2018 and 2024, 124 renewables projects in Queensland, NSW and Victoria needed to be assessed under the Environment Protection Act. Only 28 received a clear “yes” or “no” answer.
There could also be a way to give accreditation to state and territory decision-makers if they proved they could protect the national interest. That would remove the double-ups and complexity in approvals processes, and cut down the time taken to assess development proposals.
Of course, developers have stressed the importance of the types of reforms which fast-track development, while environmentally-focused groups have pushed for more focus on new protections.
Samuel also recommended an expert, independent and trusted decision-maker, in the form of a national Environmental Protection Authority, to work with the government to protect the national interest.
Us humans are full of shortcomings, but by recognising them and changing the frameworks we work with, we can improve the way we look at our choices and make decisions.
One of our problems is that, under the current Environment Protection Act, we tend to undervalue the environment. Part of that, as we’ve discussed, comes down to the vastness of nature (which needs to be matched by a broader regional lens, rather than our project-by-project approach).
The other is our short-sighted view. Because the cost of damaging nature is overwhelmingly shouldered by future generations, Henry points out we have found it very difficult to stop ourselves stealing from the future.
Like bad eyesight, these issues are not unsolvable. We just need clear goals, rules and accountability measures to keep us on track.
As Henry puts it, economics is concerned with optimising choices. That requires carefully defining what we’re wanting to achieve and, just as importantly, determining the constraints that shape the choices we’re incentivised to make. “If the constraints are mis-specified, then decisions will be suboptimal,” Henry says.
Unlike ChatGPT, we can set our own rules and guardrails. But we must choose – and act on – these ourselves before the damage we do forces limitations on us against our will.
