‘Irrevocably skewed’: Paper critical to Australia’s 2035 climate targets retracted over bad data

Chris Bowen isn’t fussy about the quality of his economic modelling so long as it delivers the message he wants to hear: that the benefits of a hard transition to renewable energy far exceed the costs.

In 2021, Bowen leaned on modelling by Reputex, which made the astonishing claim that household electricity bills would be $275 a year cheaper by 2025 under Labor’s 2030 emissions targets.

For his 2035 targets, Bowen relied on advice from the Climate Change Authority (CCA), chaired by Matt Kean.

He adopted their target of a 62–70 per cent reduction in greenhouse gas emissions without qualification, drawing on the CCA’s advice to claim that “the cost of inaction will always outweigh the cost of action”

This week, the foundations of that claim collapsed when a paper critical to the CCA’s modelling was retracted.

Its authors admitted that their April 2024 paper, published in Nature, claiming that climate change would cause a $38 trillion collapse in the global economy, was wrong.

It had been irrevocably skewed by bad data from Uzbekistan.

Its claim that a 19 per cent fall in global GDP by 2050 was already baked into the system raised eyebrows at the time, since it was way out of line with other estimates.

Now it is utterly discredited.

Yet the forecast that the effects of climate change will be catastrophically damaging to the Australian economy is central to the government’s claim that heavy investment in green energy and technology will make us better off in the long run.

The CCA’s advice to the government, published in September, forecasts a 14 per cent decline in global GDP by 2050, reducing annual income per person by $7,000.

Its source for that statement is a report by the Network for Greening the Financial System (NGFS), an organisation established to advise central banks on the economic effects of climate change.

The credibility of the NGFS’s data is now in doubt, since it relied heavily on the now-redacted Nature report.

This week, the NGFS noted the retraction and added a disclaimer on its website stating that NGFS was not responsible or liable for any reliance on its modelling.

It leaves the CCA relying on data disowned by its own publisher.

If one faulty dataset can infect an entire family of forecasts, the fragility of the system becomes impossible to ignore.

The episode shows how quickly basic errors can multiply in the enclosed ecosystem of climate research.

One poor data set from a single nation infects a single report, which is cited by others and built upon.

In traditional science, the processes of replication act as a natural stabiliser.

Climate-economic modelling, on the other hand, incentivises affirmation rather than refutation.

Predictions are irrefutable by nature, at least until we get to 2050 and can observe what actually happens rather than send ourselves cross-eyed by examining numbers on a spreadsheet.

Economic projections about 2050 are not scientific findings; they are elaborate conjectures built on layers of assumptions that cannot be tested until it is too late to correct them.

None of this is an argument against the basic physics of climate change; it is an argument against pretending that we can price the year 2050 to the nearest decimal place.

The upshot of this week’s events is that we can no longer trust the CCA’s conclusions about the cost of doing nothing.

If it wishes to stand by its forecasts it must provide more reliable modelling.

Treasury’s conclusion that the Australian economy will be $2 trillion smaller by 2050 under what it calls the “disorderly transition scenario” is no more reliable.

Treasury draws its modelling assumptions from the same narrow circle, citing the CCA and the CSIRO’s Pathways to Net Zero report.

For all its authority, the CSIRO has delivered a best-case scenario, leaning heavily on unproven technologies ranging from large-scale carbon removal to green hydrogen and electric-arc industrial processes, assuming they will mature on schedule, at falling cost, and without political resistance.

The real world rarely performs so neatly.

The CCA’s assessment of the economic benefits of action is equally contentious.

Its claim that “ambitious global action could save the Australian economy over $230 billion a year by 2050” is sourced to NGFS research paper that the NGFS effectively disowns.

Its second claim that green industries could add more than $300 billion to the economy annually by 2035–2050 comes from modelling by Accenture commissioned by the Sunshot Alliance, an coalition of corporate, union and green groups united by the belief that Australia can replace its coal and gas export base with “clean export industries”.

It can hardly claim to be disinterested in the answer.

In politics, a forecast is not merely a prediction — it is a weapon, a justification to assume a pre-conceived mandate.

A closer look at the Sunshot Alliance’s report reveals it is riddled with techno-optimism.

It assumes that by 2040, lithium battery manufacturing will be a $39 billion export industry, that green iron and steel exports will be worth $96 billion, green aluminium will earn $26 billion, and green hydrogen and ammonia will earn $32 billion.

It would be unfair to blame Sunshot for its chronic optimism bias. It is only doing its job: to shape the national climate-and-industry narrative on behalf of vested interests.

The buck stops with Kean, who, as chairman, has a duty to protect the CCA’s reputation as a credible source of independent advice, rather than an unctuous courtier telling the king what he wants to know.

Credibility demands a degree of humility: the courage to recognise the boundaries of scientific knowledge and the limits of forecasting.

It means challenging the great fantasy of our age: the belief that the future can be captured in a model by bending variables to our will.

The world is too complex, the variables too many, to be domesticated by a spreadsheet.

The only honest conclusion: the models do not reveal the future, they reveal only the ambitions of those who build them.

Nick Cater is a senior fellow at Menzies Research Centre and a regular contributor to Sky News Australia