Mathias Cormann talks up green recovery as part of his pitch to lead OECD

Katharine Murphy and Daniel Hurst
·5 min read
<span>Photograph: Lukas Coch/AAP</span>
Photograph: Lukas Coch/AAP

The outgoing finance minister, Mathias Cormann, has talked up the importance of pursuing “a green recovery with an increased reliance on renewables” in remarks to a business conference organised by the German government.

Cormann – who publicly celebrated the repeal of Labor’s carbon price as part of the incoming Abbott government – is serving out his last weeks in politics before focusing on a campaign to be the next secretary general of the Paris-based Organisation for Economic Co-operation and Development.

The OECD has previously criticised Australia for its performance on climate change. Its membership is dominated by European countries and Australia’s climate change contribution has been queried by those with more ambitious emissions reduction commitments.

The Morrison government has been pressed by some business groups, environmentalists and the Climate Change Authority to use the recovery from the coronavirus recession to direct economic stimulus towards the transition to a low-emissions future. But the Coalition has declared it will instead champion a “gas-led” recovery from the pandemic.

Related: Mathias Cormann nominated for OECD top job despite its criticism of Coalition’s climate change policy

In an effort to draw a partisan contrast with his opponents, Scott Morrison has said on a number of occasions: “If you’re not for gas, you’re not for jobs in our manufacturing and heavy industries.”

Nev Power, the head of Morrison’s Covid advisory commission and one of the government’s key business advisers, has acknowledged he has been approached by business leaders wanting the government to use the recovery to lock in low-emissions energy but his organisation is not recommending “a green recovery per se”.

But Cormann used his remarks to the online conference earlier this week to embrace the language of a green recovery. He said the Asia-Pacific region needed to “grasp the opportunities presented to us by this pandemic”.

“Opportunities like the pursuit of an inclusive and future-focused recovery, including a green recovery with an increased reliance on renewables, improved energy efficiency, addressing climate change and accelerating the transition to a lower-emissions future,” Cormann said, according to a transcript seen by Guardian Australia.

Cormann said Australia was proud of its partnership with Germany to promote the production of hydrogen “and the development of a hydrogen supply chain between our two countries”.

Cormann told Guardian Australia on Thursday night: “Of course we are in favour of an environmentally-friendly green recovery.”

“This year’s once in a one hundred years global pandemic and the large scale capital asset renewal which will inevitably be part of the recovery effort does present a once in a lifetime opportunity to shape the type and quality of that recovery.”

When Morrison confirmed Australia would nominate Cormann for the secretary general’s position in early October, the finance minister said the Coalition’s heavily criticised record on climate policy would not be a barrier to Australia courting international support for his candidacy to run the OECD.

Some in the Liberal and National parties have openly queried the science of climate change and the Coalition repealed a carbon price legislated by the Gillard government – which it incorrectly characterised as a tax. Pitched battles about climate policy have prompted internal eruptions leading to Liberal leadership changes since 2009.

In 2009, Cormann told the ABC: “If an emissions trading scheme is nothing more than a big new bureaucracy and a big new tax, which in the absence of a global agreement it would be, then why would we go down that path?” In the same program, Tony Abbott railed against the “evangelical fervour of the climate change alarmists”.

In 2011, Cormann characterised a carbon tax on Twitter as “not effective action on climate change” and “an act of economic self-harm which does nothing to help global emissions”. In 2016, he said Australia’s economy was “in better shape because we scrapped Labor’s carbon and mining taxes and implemented our plans for jobs and growth”.

When challenged on the Coalition’s history in early October, Cormann said: “The discussion in Australia has not been, as far as we’re concerned, about whether or not we are committed to effective action on climate change – we are.

Related: Morrison government 'ignored' Climate Change Authority's advice on Covid recovery

“The debate in Australia has always been about what the best method was to most effectively and most appropriately, from an economic point of view, achieve the best possible emissions reductions in an economically sensible fashion.”

On Thursday night, Cormann said: “Australia has a very strong track record when it comes to economically responsible effective action on climate change”. He said the debate had been about “the how” not about whether to take action.

The International Monetary Fund has recently argued a combination of carbon pricing and an “initial green stimulus” would turbocharge global economic recovery from the coronavirus, and help put the world on a sustainable growth path post-pandemic.

The IMF’s policy roadmap for pursuing a green recovery was carbon pricing accompanied by assistance to households and subsidies for renewables – which is very similar to the policy architecture the Abbott government repealed when it came to office in 2013.

In his remarks to the business forum earlier this week, Cormann said the Asia-Pacific region would be “the engine room for the global recovery and for future global growth for decades to come” and “investing now to make this happen is a sure way to accelerate our global recovery and to make it as sustainable as possible”.

He said Australia’s vision for the Asia Pacific was a region “built on inclusivity, prosperity and stability”. Cormann said another foundation stone for recovery was for nations to “unequivocally champion free and open trade”.

“There can be a temptation to put up fences around our economies so that we don’t have to worry about being challenged,” Cormann said. “But putting up fences does not stop innovation and competition elsewhere – all it does is ensure that those behind these fences fall behind the rest of the world.”