Melbourne Law School - Research Publications

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    How to Talk to a Populist About Climate Change
    Dibley, A (Graham Holding Company, 2019)
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    Murray-Darling report shows public authorities must take climate change risk seriously
    Dibley, A (The Conversation AU, 2019-02-04)
    The tragic recent events on the Darling River, and the political and policy furore around them, have again highlighted the severe financial and environmental consequences of mismanaging climate risks. The Murray-Darling Royal Commission demonstrates how closely boards of public sector corporate bodies can be scrutinised for their management of these risks. Public authorities must follow private companies and factor climate risk into their board decision-making. Royal Commissioner Brett Walker has delivered a damning indictment of the Murray Darling Basin Authority’s management of climate-related risks. His report argues that the authority’s senior management and board were “negligent” and fell short of acting with “reasonable care, skill and diligence”. For its part, the authority “rejects the assertion” that it “acted improperly or unlawfully in any way”. The Royal Commission has also drawn attention to the potentially significant legal and reputational consequences for directors and organisations whose climate risk management is deemed to have fallen short of a rising bar.
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    Government-owned firms like Snowy Hydro can do better than building $600 million gas plants
    Dibley, A (The Conversation AU, 2021)
    The Morrison government today announced it’s building a new gas power plant in the Hunter Valley, committing up to A$600 million for the government-owned corporation Snowy Hydro to construct the project. Critics argue the plant is inconsistent with the latest climate science. And a new report by the International Energy Agency has warned no new fossil fuel projects should be funded if we’re to avoid catastrophic climate change. The move is also inconsistent with research showing government-owned companies can help drive clean energy innovation. Such companies are often branded as uncompetitive, stuck in the past and unable to innovate. But in fact, they’re sometimes better suited than private firms to take investment risks and test speculative technologies. And if the investments are successful, taxpayers, the private sector and consumers share the benefits.
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    Confronting carbon in the state sector: Why engaging SOEs is critical for the climate challenge
    Dibley, A (European Corporate Governance Institute, 2023)
    State-owned enterprises (SOEs) are significant – albeit under-examined – contributors to global climate change. At the turn of the twenty-first century, SOEs seemed to be diminishing in size and significance as advanced economy governments were selling off and redistributing state assets in a bid to shrink the size of the government, and development finance institutions encouraged emerging economies to do the same. But since the year 2000, the role of SOEs in the global economy has rebounded. Today, SOEs own around 20 percent of the total assets of the largest 2000 companies around the world, around 4 times higher than in 2000. Beyond their USD45 trillion asset base, SOEs also have become important actors in cross border acquisition activity, and large players in financial markets. SOEs now hold USD7.4 trillion in corporate debt, making them sizeable issuers in the debt capital markets.
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    How one student forced the government to admit the economic risks of climate change
    Dibley, A (The Conversation AU, 2023-09-07)
    Last month, a significant victory for climate change was won behind closed doors. In 2020, Katta O’Donnell, then a 23-year-old university student in Melbourne, launched a world-leading class action lawsuit against the Commonwealth government. O’Donnell alleged that she and other investors in Australian-issued bonds had been misled because the government failed to disclose how climate change might impact their investments.
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    How Australia’s huge superannuation funds can do much more to fight climate change, with a little help
    Dibley, A (The Conversation AU, 2024)
    Few of us pay much attention to our superannuation. Under the Superannuation Guarantee, employers pay at least 11% of salaries into their employees’ super funds without workers having to do anything. These accumulating automatic payments have turned the Australian super fund industry into one of the world’s largest, and the fastest-growing. Worth $A3.5 trillion, our superfunds sit alongside funds from Canada, Japan, Netherlands, Switzerland, the United Kingdom and United States to make up 92% of total global pension assets. But none of these funds are investing enough in the net zero transition. Institutional investors, of which super funds are a vital part, provided less than 1% of all direct private climate change finance globally in 2021/2022- a contribution of around $US6 billion. This is far from the trillions needed every year to finance renewable energy projects, cleaner industrial processes, and replacing fossil fuels in transport, among other initiatives. At the same time, many Australian funds continue to invest in carbon-producing companies, such as oil and gas, even when they claim to be making “green” investments. This article outlines reforms the federal government could undertake to encourage super funds to tackle the climate crisis. This would help align the super system with its original purpose: to provide a better standard of living for the millions of us who will retire on a climate-damaged planet.
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    Can money buy you (climate) happiness? Economic co-benefits and the implementation of effective carbon pricing policies in Mexico
    Dibley, A ; Garcia-Miron, R (Elsevier, 2020-12)
    It is difficult for governments to implement effective climate change mitigation policies because they often create short-term costs for concentrated industry groups who oppose them. As such, climate policy scholars have theorized that governments will be more willing and able to implement mitigation policies where they align with other economic policy objectives. The logic of this “economic co-benefits” argument is that co-benefits create short-term gains for governments to offset the immediate costs they face in introducing mitigation policies. Through a most-similar systems design comparative study of a carbon tax and an emissions trading scheme (ETS) in Mexico, this article interrogates the economic co-benefits theory of mitigation policy adoption. By comparing the motivations underpinning two carbon pricing policies in a single country, the article suggests that the presence of immediately accruing fiscal revenues created short-term incentives for the Mexican government to implement the carbon tax, whereas such short-term incentives were not present with respect to the ETS. However, in both cases concentrated affected industry groups were able to dilute the carbon prices to which they were subject. The implications of this study are that economic co-benefits may not be as useful in achieving effective mitigation policy outcomes, in the absence of measures which also independently change the interests of concentrated industry groups.
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    Decarbonization in state-owned power companies: Lessons from a comparative analysis
    Benoit, P ; Clark, A ; Schwarz, M ; Dibley, A (Elsevier, 2022-06-25)
    A rapid decarbonization of the electricity system is urgently required for the Paris Agreement objectives to stand a reasonable chance of being met. While state-owned power companies (SPCs) are the dominant firm type in the global electricity sector, representing nearly two thirds of global electric power generation capacity, most climate policy literature focuses on private sector companies when analyzing decarbonization interventions. SPCs’ distinct corporate governance structures, objectives, relationships with government, and sources of finance, however, can be markedly different from those of private companies. Here, we develop a framework for analyzing the extent to which common and divergent features of SPCs, and the markets in which they operate, affect their relationship to government interventions on decarbonization. We also consider the implications of these relationships for the effective implementation of sector-wide decarbonization strategies. We then apply this framework using a comparative case study analysis of six major SPCs, and highlight how differences in their agency, motivation, capacity, and market exposure may result in different potential responsiveness to government regulatory, policy and market interventions on decarbonization. We generalize these findings by developing four SPC archetypes and illustrate how they might respond differently to government interventions targeting decarbonization. Our analysis posits that SPCs can, under the guidance of governments pursuing ambitious climate policy, be more effective vehicles for decarbonization relative to private sector companies, particularly when they operate with a high degree of operational independence, are insulated from competitive pressures, and have the financial and technical capacity to invest in the decarbonization of their asset base. Similarly, market-wide policy interventions, such as carbon pricing mechanisms, could in practice be less effective interventions with respect to SPCs than their private counterparts when the SPC is ill-equipped to translate these incentives into decarbonization action because it is mandated to pursue supplementary objectives other than profit maximization alone. Ultimately, governments will need to step up their climate action to achieve carbon neutrality. SPCs can, and where they are major market players, must be key actors in driving decarbonization when the appropriate interventions are utilized and therefore deserve significantly more attention in the climate policy debate.
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    National COVID debts: climate change imperils countries' ability to repay
    Dibley, A ; Wetzer, T ; Hepburn, C (Nature Research, 2021-04-06)
    Analysis reveals three ways to boost green investment and achieve a resilient recovery from the coronavirus pandemic.
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    When does “Leviathan” innovate? A legal theory of clean technological change at government-owned electric utilities
    Dibley, A (Harvard Law School, 2023)
    The electricity system in the United States comprises thousands of government-owned power utilities. Globally, such government-owned companies remain the dominant corporate structure through which electricity is produced and transmitted. Given their prevalence, the willingness and speed of these firms to adopt new clean electricity generation and transmission technologies could have significant implications for reducing greenhouse gas emissions, and the economic and social consequences that follow. Despite the importance of these companies, there have been few studies about why some public power utilities adopt new technologies more readily than others. Economists who have written about innovation at government-owned companies have tended to focus narrowly on how the resources and competencies of those firms shape innovation outcomes. In this Article, I put forward a legal theory to explain innovation. I suggest that the interaction between the corporate governance and financial rules of the firm, and the interests of host governments play a central role in shaping their innovation outcomes. I test the theory through a comparative case study of two significant public power utilities— the Tennessee Valley Authority and the New York Power Authority. To understand periods of clean energy innovation (or lack thereof) throughout their history, I draw on 43 confidential interviews with senior executives, officials, and observers of the firms. I also rely on historical, legal, operational, and financial documents of both firms dating back to the 1930s, to evaluate their technological investment decision-making over time. The theory and evidence in this Article suggest that policymakers eager to achieve technological change at government-owned utilities should reform the “creative” laws that govern the managers’ risk exposure in adopting new technologies. Also, they should reform the “destruction” rules on debt and tariffs that can lock in incumbent technologies.