The federal government’s decision to bypass its own science agency and pay $6 million to a multinational consulting firm for key modelling work on its net-zero plan “doesn’t make much sense” and will be more costly and less effective, according to the CSIRO Staff Association.
It was revealed last week that CSIRO had applied to conduct key net-zero modelling for the government, but was rejected in favour of US consulting firm McKinsey.
McKinsey was eventually paid more than $6 million over two contracts by the Industry department for this modelling work, which featured heavily in the federal government’s net-zero emissions by 2050 plan.
According to CSIRO Staff Association acting secretary Susan Tonks, the national science organisation had the ability and expertise to conduct this modelling in-house, and would have delivered a better result for the public.
“For all the talk of this plan representing ‘the Australian way’, it’s actually US-based consultants who are providing the modelling, at considerable cost, limited transparency and ultimately at the expense of homegrown expertise, be that CSIRO or Treasury,” Ms Tonks said.
“It’s hard to know whether the $6 million paid to McKinsey for the modelling represents value for taxpayers. Outsourcing across the federal public sector is estimated to cost between 10 and 30 per cent more than work performed in-house, an issue that the Auditor-General is currently investigating.”
At the Estimates hearing last week, CSIRO executive director of environment, energy and resources Dr Peter Mayfield said he had “great confidence” in the organisation’s ability to have completed the modelling.
Ms Tonks also backed this, saying CSIRO has deep expertise in this type of work.
“CSIRO has a strong track record in climate science, including both basic research and adaptation, not to mention the active development of new technologies aimed at the mitigation or reduction of emissions,” she said.
“That’s why the revelation at recent Senate Estimates that CSIRO was passed over for the task of providing the modelling for the Coalition government’s Net Zero 2050 plan – with the job going to multinational consulting house McKinsey – doesn’t make much sense.”
The Industry department awarded McKinsey a $4.86 million contract earlier this year to take the stretch goals from the government’s technology roadmap and look at how to achieve them, and the impact of this on the economy.
The firm was then awarded a further $1.2 million contract to conduct bottom-up analysis of how abatement could occur across sectors, and to compare this to the department’s own modelling.
“The modelling we commissioned from McKinsey was undertaken over a series of points in time over the year, some of it was commissioned early on,” Industry department deputy secretary Jo Evans told an Estimates hearing.
“As we proceeded to do the general equilibrium modelling we also asked McKinsey to do some bottom up work using that earlier analysis to tell us what they would’ve come up with using similar assumptions. That was done closer to the end.”
Representatives from Treasury and the Productivity Commission also worked with the department on the analysis.
Elements of this modelling were featured prominently in the net-zero plan, but the complete modelling is yet to be released publicly by the government.
“I can confirm we are finalising the writing up of that work. It’s quite a complex set of material and as the plan was only finalised on Tuesday we need to make sure we have written that work up. The write up of it we need to take a little bit of extra time to make sure it’s written clearly and able to be presented well to the public,” Ms Evans said.