The Commission’s Empty Column

The claim rests on a balance sheet. The NSW planning commission has weighed the largest coal project in the state’s history and found that its benefits exceed its costs. Let us first verify whether this measurement captures what it purports to capture.

A balance sheet is a machine with two columns. Into the first go royalties, wages, contracts and the revenue of a port, figures that arrive already denominated in dollars and therefore enter the ledger without friction. Into the second go the costs, and here the operator must do real work, because some costs come with a price attached and others must be estimated before they can be written down. Climate-related economic damage belongs to the second kind. It is an honest difficulty, and I do not mock it. Every estimate of such damage carries a wide margin, and the margin is set by the very uncertainty about future fires, floods and crop failures that makes the damage worth counting.

The strongest defence of the commission runs as follows. The coal will mostly be burned abroad, its emissions entered in another nation’s inventory, and the commission’s remit is a state planning decision, not the governance of the atmosphere. Any figure it assigned to global harm would be speculation, and speculation has no place in a statutory determination.

I accept every premise and reject the conclusion, for a reason that is arithmetical rather than moral. When a cost is uncertain, the ledger may record a range. It may record a low estimate with a stated error. What it may not do is record nothing, because nothing is not an absence of measurement. Zero is a measurement, and a very precise one, and in this case it is the single value that every serious estimate excludes. The commission did not decline to guess. In effect it guessed the one number certain to be wrong, then wrote it neatly.

Picture the clerk who prepares the final table. The royalties column fills to the last digit. The damages column holds a blank cell, and the formula at the foot of the page reads that blank as nought, as spreadsheets do, without complaint. The approval follows from that summation as surely as a gear turns when its neighbour does. No minister needed to argue for it.

This is why the warning from Matt Kean, a former state treasurer who now chairs the Albanese government’s Climate Change Authority, should trouble anyone who reads ledgers for a living. His objection is not sentiment. It is a complaint about the instrument. And the cost that went uncounted does not stay abroad with the smoke. It comes back to New South Wales as insurance premiums, rebuilt roads, and drought relief, which the state will then pay from the very royalties it counted as clear profit.

Can this be independently confirmed? Yes, and cheaply. Ask the commission for the number it placed in the second column. If the answer is a range, we may argue about its width. If the answer is a blank, we have found the fault in the machine: it was built to count only one column.