In the past five years, we’ve seen the banks backing away from funding in fossil fuel projects, financial regulators calling out risks, energy and mining companies reducing reliance on coal and oil, the state government doing their bit, yet our Federal Government continues to bow to a small number of highly pro-coal individuals.
Early this year Westpac joined the other banks in declining to provide finance to the Adani project. AGL have stated that they will not be building any new coal-fired power plants and AGL is planning to retire Liddell by 2022 as the ageing station costs more and more to maintain and renewables are cheaper, and the other energy companies are all investing in renewables. Early this year APRA board member Geoff Summerhayes warned the finance industry that climate change risks are foreseeable, material and actionable now and directors have a fiduciary responsibility to shareholders to consider and manage these risks. The latest piece of news is that BHP has triggered the early departure of the Minerals Council of Australia CEO due to his ongoing pro-coal lobbying. BHP Billiton has had teams working on mitigating their portfolio against climate change for over 15 years, they are under no illusions. Mike Henry, BHP Australian Minning boss, said BHP was a strong supporter of the Finkel Review of energy and the Clean Energy Target, which is being held up by pro-coal forces in the federal government. We now have QLD, NSW, VIC, and SA, and the ACT all committed to zero emissions by 2050 (TAS is almost already there), they are helping to fill the gap left by the federal government.
The science of climate change is absolutely irrefutable, and renewable sources of power are lower cost, the state government are doing their bit, but business needs certainty at the national level. Australian energy prices have been driven sky high, through a lack of regulatory certainty and through a continued investment in centralised generation when the reality is the future will a highly decentralised system of generation and consumption.
The miners, the banks, the energy companies, financial regulators, the state governments and the public all get it. Why doesn’t the federal government?