From a ringside seat in Australian government departments, David Pearl watched the nation lurch from rational economic policymaking into what he calls “a moral panic.”
Pearl’s experience is broad: he is a former senior Treasury official, economic adviser to a future Labor Prime Minister, and a diplomat posted to the Organisation for Economic Co-operation and Development (OECD) at the dawn of global climate talks.
In different roles, he saw governments wrestle with some of the greatest challenges of our time: the global financial crisis, COVID-19, and climate change. He learned that good intentions don’t always lead to good outcomes, that government can do as much harm as good, and that consensus can be a dangerous thing.
Climate policy, he argues, has replaced religious faith. And those who dissent — even mildly — are cast as apostates.
His message is deeply unfashionable in Canberra: Net Zero is failing, global coordination is a fantasy, and climate policy has reversed the moral order, “under the guise of morality.”
“It’s beyond ironic that the modern-day climate policy agenda amounts to a massive transfer from the poor to the rich.”
Australia’s early position in international climate negotiations, Pearl explains, was pragmatic. Because of our growing population and resource-intensive economy, we secured the right to increase emissions by 12 percent under the Kyoto Protocol.
That pragmatism evaporated after the landmark 2006 report for the UK government penned by economist Nicholas Stern. It argued that the economic costs of inaction on climate change would far exceed the costs of taking early and aggressive action to reduce emissions. Pearl recalls the moment well:
“It triggered a bizarre moral panic across the Western world where climate change ceased to be seen as an economic issue… and became a moral crusade.”
Though the economics of the Stern Review were sharply criticised — most notably by Nobel Laureate William Nordhaus — its political effect was profound.
Pearl even admits to writing the first line in the Labor Government’s incoming brief that climate change was “perhaps the most significant economic and political challenge of our time” — a flourish he added to attract attention. New Prime Minister Kevin Rudd seized on it, added the word “moral,” and made it central to his public platform.
“It may have been the reason he ultimately fell.”
Today, Pearl says, Net Zero is unattainable without enforceable global commitments — which do not exist. The United States, China, India, and Russia have no intention of hitting the target.
“Absent that international regime, the only rational response is adaptation. We’re doing entirely the wrong thing, that will have absolutely no effect on the problem.”
He draws a damning historical parallel: Net Zero is modern-day temperance. Like Prohibition, it’s driven by zealotry, cloaks public policy in moral absolutes, and fuels hypocrisy and corruption. And it was futile.
“Everybody kept drinking. Everybody’s going to keep generating emissions.”
Worse, he says, Net Zero is not merely ineffective — it has become an industry. A class of green grifters now profits from policies that don’t achieve their stated goals.
Pearl sees parallels with the indulgence economy of the medieval Catholic Church. Offsets and emissions-neutral labels are bought like spiritual pardons. Being seen to be involved in “climate action” becomes an end in itself.
“It’s the indulgence that matters, not the climate outcome.”
As a career public servant, he’s scathing about how policy advice has been captured by ideology. He describes how Treasury — once a ‘debating society’ — has become an orthodoxy factory. Those who worked on climate programs a decade ago have been rewarded for their faith.
“We have people in very senior positions in our bureaucracy who are passionate climate zealots and completely incapable of applying a rational cost-benefit lens.”
Pearl sees the same pattern across the major crises he’s worked on — from the financial crisis to COVID: government positioning itself as the cure for all ills. The greatest danger in the bureaucracy, he warns, is rewarding people for thinking like everyone else.
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