Just over a month after Matt Kean was appointed chair of the Climate Change Authority (CCA), he has taken up a role that raises serious perceived conflict of interest concerns. The former NSW Liberal treasurer and energy minister is now also the director of strategic partnerships and regulatory affairs at Wollemi Capital, a private climate and environmental investment fund.
In other words, Kean will advise the government on climate policy while also representing a company whose profits rely on these policy settings.
So, when did the Albanese government know this appointment was on the cards? And why isn’t it concerned?
‘Access to information’
Climate Change and Energy Minister Chris Bowen defended the appointment yesterday, saying, “Under the relevant legislation, CCA members are required to have expertise in areas relevant to the authority’s important work.” Bowen neglected to mention the other part of the Climate Change Authority Act, which states board members “must not engage in paid employment that conflicts or may conflict with the proper performance of their duties”.
Kean’s appointment appears to be in direct conflict with his CCA duties. Wollemi Capital’s investments include a carbon credit platform, agtech startups that sequester carbon, and a portfolio of native forest regeneration projects that attract carbon credits.
The CCA advises the government on emissions targets, how to manage them, and the role of carbon abatement in this schema: all policy matters that feed Wollemi Capital investment decisions. This means that while director of “regulatory affairs” at Wollemi, Kean will both influence government policy and inform it about potential regulatory changes. And as CCA chair, Kean will be overseeing policy advice from which Wollemi will seek to profit.
Former senator Rex Patrick on Monday drew attention to the obvious problems, telling the Australian Financial Review, “Kean will have access to information in his government role that outside entities will not be aware of … Whilst no-one would suggest he would reveal confidential government information, he can’t unknow what he knows. It will be almost impossible not to integrate what he knows into the advice he gives.”
Bowen also defended the CCA’s record by saying that “the authority is well-versed in handling conflicts in a transparent and appropriate way”. This is laughable, though it’s certainly experienced in trying to handle them.
Pattern of appointments
Kean’s new role follows a pattern of appointments that have undermined the integrity of the Climate Change Authority in recent years.
The previous chair, Grant King, was a former gas executive who was also — concurrent with his CCA role — the chair of the largest carbon-credits aggregator in Australia, GreenCollar. The current deputy chair of the CCA, Susie Smith, was a long-time manager at gas company Santos and is now chief executive of the Australian Industry Greenhouse Network, a lobby group for the fossil-fuel industry.
Another recent appointee by Labor to the CCA board is Patty Akopiantz. The former AMP and current KPMG non-executive director doesn’t just have a stellar governance record, she is also a co-founder of Assembly Climate Capital, another environmental investment fund whose interests align strongly with the growth of carbon markets. For example, through Assembly Climate Capital, Akopiantz is a director and investor in SeaForest, an agricultural seaweed startup that has been pushing for carbon credit accreditation.
In themselves, each of these appointments might seem relatively harmless (and Crikey is not alleging any wrongdoing). The net effect, however, is obvious if we look at them structurally.
Carbon credits
Under the safeguard mechanism — the federal government’s only emissions reduction legislation — the nation’s largest polluters are required to gradually reduce their emissions or buy carbon credits representing the equivalent amount of emissions reduction.
Setting aside the fact that experts believe the whole carbon market is “largely a sham” and that most approved carbon credits do not represent real or new cuts — and also setting aside that Australia’s booming fossil fuel exports don’t need to be offset — the local demand for carbon credits is projected to boom in coming years as a result of the safeguard mechanism.
Why? Because it’s cheaper for companies to buy credits than to actually reduce their emissions. Indeed, companies like Woodside have already purchased all the credits they need — out to 2030 — to avoid having to reduce real emissions.
Many of Australia’s biggest polluting companies will need millions more credits to meet their safeguard obligations, so the big push in both the fossil fuel industry and the carbon trading industry is to find new ways to generate carbon credits. This is partly because current methods of producing them (such as “avoided deforestation” or “human-induced regeneration”) are either reaching capacity or have been found to be completely fraudulent. Either way, more of them will keep the price down.
Enter the environmental impact investment funds. The big money (from Macquarie to Commonwealth Bank, each with links to Wollemi Capital) is now casting around for these new methods to invest in — and the government and Climate Change Authority are fully supportive.
This new investor class often comprises the very same people who sit on the boards of the government authorities, regulators and funding agencies that shape the investment terrain, as well as on the big environmental NGO boards. If this investor class has its way, the carbon markets will be flooded with mangrove, seaweed, soil, reef and even plastic credits. All of these are to mitigate the ongoing operations of the fossil fuel industry, something Labor is openly committed to.
Mitigate? Let’s call it what it is: enable.
Various entities, from Wollemi Capital to LEAN (Labor Environment Action Network), are also currently exploring new ways to generate carbon credits from forestry or by protecting old-growth forests. Obviously there’s nothing wrong with growing or protecting trees, but generating new credits from industries that already exist, or from forests that have existed for centuries, to sell to the fossil fuel industry, is the opposite of environmentally responsible.
New ‘opportunities’
So, if the Albanese government is trying to support this drive to open up carbon “opportunities” in the name of carbon “abatement” and the energy “transition”, it has appointed the perfect person in the form of Matt Kean.
Perhaps this is too cynical, and Bowen and Albanese will be shocked — shocked! — that their new chair would take up an appointment that appears so flagrantly in conflict with his CCA role. But if they continue to deny it’s a problem, it will only confirm that the Albanese government’s climate credentials are in tatters.
After promising real climate action to the electorate, Labor’s main achievements have been to subsidise the expansion of the gas industry, continue to approve new fields and coal mine extensions, introduce a broken safeguard mechanism, fail to introduce climate triggers or any significant new environmental protection legislation, and maintain fossil fuel industry subsidies to the tune of $10 billion per year.
Hiding behind the inspirational social media posts touting renewable energy or showing #naturepositive ministers hugging marsupials, the Albanese government has made Australia the second-largest exporter globally of fossil fuel emissions (up one spot), and the world’s best gaslighter.
What do you think of Matt Kean’s appointments? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
