Don't worry, climate change is just imaginary

As we've sweltered through this terrible summer – and lately, as bushfires have raged – what a comfort it's been to know that climate change doesn't exist and isn't happening.

Or, if it does exist, it's not caused by anything humans have done, so there's nothing we can do about it.

Or, if it is caused by humans burning fossil fuels for the past 200 years, let's say we've got a policy to deal with it, go to international conferences and make pledges to act, then come home and not do much about it.

That way, we'll have all bases covered: something to calm the consciences of those still silly enough to believe climate change is real, but not enough to annoy the party's many climate change deniers, nor our generous donors in the coal industry.

And, just to make you feel better, let me remind you of the big win the deniers have had. The Coalition's leading, longest-standing and most articulate supporter of action on climate change has changed sides.

Malcolm Turnbull, the man who lost his job as party leader because was so keen to see action he supported the Labor government's emissions trading scheme, is now keen to ensure it never happens again.

The squeakiest wheels in the party want him to demonise renewable energy, blaming it for all the blackouts and price rises?  Introduce new government subsidies for coal while making the future for power generation so uncertain no one's game to invest in anything?

Sure. Whatever it takes.

(Don't worry, Malcolm, I'm sure all the people inside and outside the Liberal fold who were so pleased when you became Prime Minister – me included – will learn to accept your need to abandon everything we know you believe and start doing Tony Abbott impressions.)

It's the easiest thing in the world for people to imagine that whatever's been happening lately is much bigger and more terrible than ever before.

Trouble is, the scientists keep confirming our casual impressions.  A report this month prepared by top climate scientists for the independent Climate Council, is all bad news.

They say all extreme weather events in Australia are now occurring in an atmosphere that's warmer and wetter than it was in the 1950s.

"Heatwaves are becoming hotter, lasting longer and occurring more often," they say.

"Extreme fire weather and the length of the fire season is increasing, leading to an increase in bushfire risk."

This fits with the findings of the latest biennial CSIRO and Bureau of Meteorology State of the Climate report.

According to the bureau's Dr Karl Braganza, Australia is already experiencing the effects of climate change, with record-breaking heat now becoming commonplace across the country.

"Australia experienced its three warmest springs on record in 2013, 2014 and 2015," he says. "Temperature and rainfall during this period is critical to southern Australia's fire season.

"We've already seen an increase in fire weather and a longer fire season across southern and eastern Australia since the 1970s.

"In these regions the number of days with weather conducive to fire is likely to increase.

"Whilst the observations show us increased rainfall in some parts of Australia, we have also seen significant seasonal decline, such as in the April-October growing season, where an 11 per cent decline in rainfall has been experienced in the continental southeast since the mid-1990s.

"The changing climate significantly affects all Australians through increased heatwaves, more significant wet weather events and more severe fire weather conditions.

"Some of the record-breaking extreme heat we have been seeing recently will be considered normal in 30 years' time."

Oh, good.

Of course, none of this is having any effect on agriculture. It must be a great comfort to our farmers to know that, by order of Barnaby Joyce and the National Party, climate change is a figment of the climate scientists' imagination.

This is good news, since I read that reliable rainfall and predictable temperature ranges are critical to agricultural production, and these are the very factors affected by a changing climate – if it was changing, which it isn't.

A new CSIRO study, led by Dr Zvi Hochman, has found that Australia's average yields from wheat-growing more than tripled between 1900 and 1990 thanks to advances in technology, but have stalled in the years since then.

The study found that, since 1990, our wheat-growing zone had experienced an average rainfall decline of 2.8 millimetres, or 28 per cent per cropping season, and a maximum daily temperature increase of about 1 degree.

Australia's "yield potential" – determined by climate and soil type – which is always much higher than farmers' actual yields, has fallen by 27 per cent since 1990.

So all the efforts farmers have made to improve their yields with better technology and methods have served only to offset the effects of climate change, leaving them no better off.

"Assuming the climate trends we have observed over the past 26 years continue at the same rate, even if farmers continue to improve their practices, it is likely that the national wheat yield will fall," Hochman says.

He says these findings would be broadly applicable to other cereal grains, pulses and oilseed crops, which grow in the same regions and season.

But not to worry. They're only scientists. What would they know that our pollies didn't want to know?

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Reserve Bank chief gently reproves Turnbull’s failings

Reserve Bank governor Dr Philip Lowe's economic policy to-do list for 2017 contains a lot more implied criticism of the Turnbull government's weak performance than it has suited some in the national press to report.

It's true that, in his speech last Thursday, Lowe was clear in his support for a cut in the company tax rate and, by implication, the government's plan to cut the rate from 30 per cent to 25 per cent over 10 years, at a cumulative cost to revenue of $48 billion, and then a continuing net cost of $8 billion a year.

Last among the four items on Lowe's to-do list was "rebuilding our fiscal buffers", by which he meant getting the budget back into surplus.

Our former good record of successive surpluses and negligible net government debt "provided us with a form of insurance", he said.

"It meant that when difficult times did strike last decade, fiscal [budgetary] policy had the capacity to play a stabilising role. We had options that not all other countries enjoyed."

Note to the government's media cheer squad, Treasury revisionists and Professor Tony Makin: this leaves little doubt about Lowe's rejection of your minority view that fiscal policy is ineffective in stabilising the economy during downturns.

Lowe went on to say that the task of returning the budget to surplus is complicated by our simultaneous "need to make sure that our tax system is internationally competitive".

"One example of this complication is in the area of corporate tax, where there is a form of international tax competition going on in an effort to attract foreign investment," he said.

"Like other countries, we face the challenge of responding to this, while achieving a balance between recurrent spending and fiscal revenue."

Since Labor is using its senators to oppose passing the government's tax cuts to big businesses, one Australian newspaper headlined this "Reserve Bank chief slams Labor on company tax block". Some slam.

I'm unpersuaded by the need to cut the company tax rate at a time when many multinational companies have already found ways to pay far less than 25 per cent, but that's for another day.

A point to note, however, is that whereas the government argues cutting company tax would do wonders for "jobs and growth", Lowe's argument is more negative: if we don't do it while other countries are doing it we'll lose foreign investment – and, presumably, jobs and growth.

Not nearly such an attractive selling proposition.

Another point worth noting is Lowe's implication that the budget needs to achieve balance in spite of the huge cost of cutting company tax.

Maybe we should headline this: Reserve Bank chief slams Coalition's failure to show how company tax cut will be paid for, and so not further delay our return to surplus.

Note, too, Lowe's reference to "achieving a balance between recurrent spending and fiscal revenue" (my emphasis).

This isn't the first time he's quietly taken issue with Treasury's longstanding practice of exaggerating the size of budget deficits by lumping spending on capital works in with recurrent spending – unlike the state governments.

Borrowing part of the cost of building infrastructure that will deliver economic and social benefits for 30 or 50 years is in no way "living beyond our means".

And, indeed, one place higher on Lowe's to-do list than achieving budget surplus in spite of company tax cuts is the task of "providing adequate high-quality infrastructure to help our citizens be as productive as they can be and enjoy a high quality of life".

He notes we've got a strongly growing population which, if we fail to invest in sufficient infrastructure, including transport infrastructure, can "impair our ability to compete and be as productive as we can be".

It's surprising how many people are great advocates of high immigration levels, but won't countenance the increased spending and borrowing needed to provide the additional infrastructure – roads, public transport, hospitals, schools – used by all the extra people.

Then they wonder why our productivity performance is weak.

Which brings us to the first item on Lowe's to-do list: "reinvigorate productivity growth".

"There is no shortage of things that could be done to lift our performance. The challenge is that most of these ideas require difficult political trade-offs." Just so.

Lowe's second issue on the list is "how best to capitalise on the opportunity that the economic development of the Asian region provides".

I'd have thought the answer was obvious: our business people should sit round waiting until our hopeless politicians provide them with tax incentives sufficient to induce them to get off their arses.

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