Zali Steggall

According to independent MP Zali Steggall a major disruption is on the way; Australia needs a seat at the table and that requires a net zero commitment.

The prospect of a price on carbon might have derailed successive Australian leaders but it was never a political issue in the European Union, according BNP Paribas Asset Management chief sustainability strategist Mark Lewis.

“It never made headlines,” he said, speaking at Aware Super’s Climate Change Action Roundtable on Wednesday, offering a European perspective to a discussion framed around independent MP Zali Steggall’s Climate Change Bill that was reintroduced to parliament earlier this month.

Done at a “super national level,” the price of carbon is the same across the entire EU, Lewis told the meeting.

It is now high enough to push coal out of the mix but will need be raised to get the EU to net zero, which will require shifting industries such as transport and manufacturing away from fossil fuels and towards green hydrogen.

Mark Lewis, BNP Paribas Asset Management

In recent research, Lewis recommended tripling carbon prices to around 79 Euros a tonne (AUD$127.85 a tonne) to encourage the necessary adoption of clean hydrogen.

“That price is consistent with putting the EU on a path to net zero.”

The Zali Steggall bill includes an economy-wide net-zero target by 2050, the creation of an Independent Climate Change Commission and national emissions budgets and plans for reducing emissions.

Lewis said that clear government targets like those proposed by Steggall kick-started the European revolution.

“Targets are needed as a reference point, and some public incentives at the start of the new technology so you start to get economies of scale.”

These conditions bring down the price of new technologies such as renewables, creating “self-reinforcing loops” for investment, he said.

This has been reinforced in the EU as many investors have “lost a lot of money in sectors that used to be safe, such as utilities”.

As such, renewables have become self-sustaining but now the challenge is applying the same treatment to green hydrogen and other necessary technologies to achieve net zero.

Australia could be left out on its own

Zali Steggall said that for the Australian government “delay is the new denial” when it comes to climate policy.

Steggall, who took part in the meeting, said that the bill was far from revolutionary and contained reasonable initiatives already enacted successfully in places such as the UK Germany, France, and New Zealand.

“My goal as an independent is to put a pathway forward that is down the middle, and that can achieve bipartisan support,” she said.

Steggall, described as “conversative but green”, said she represented the “sensible centre” on climate change action.

“The Climate Change Bill is an agreement that we lock in a safe future and outlines how to get there.

“This is a major disruption coming, and we need a seat at the table and that requires a net zero commitment.”

She said that this was the time for the Morrison government to “step up”.

“This isn’t a problem for 10 years time. We already have issues from bushfires … and we need to know that bushfire communities are building back better, that climate risk is being taken into account.

“These are the considerations that need to be built in now.”

Wai-Shin Chan, head of Climate Change Centre of Excellence and co-head of ESG Research at HSBC, said that the election of Joe Biden as the US President will spur nations experiencing climate paralysis into action.

Wai-Shin Chan, HSBC

“This shift will leave previously emboldened countries uncertain so that climate denial or inertia will be seen as a bad thing,” he said.

“There will be a risk of being left in climate isolation.”

Private sector can only do so much without certainty

Aware Super chief executive officer Deanne Stewart warned that without long term certainty provided by government as detailed in the climate bill, there is only so much the private sector can do to drive the transition.

The super fund, which was previously called First State Super before recently merging with VicSuper, has a net zero emissions target by 2050 and has recently announced plans to reduce the carbon intensity in its listed equities portfolio by a minimum of 30 per cent by 2023.

The move will see carbon intensive companies scrubbed from the company’s benchmarks.

Deanne Stewart, Aware Super

“We know that globally the top 60 emitters are responsible for more than 50 per cent of the greenhouse gas emissions of share market-listed companies,” said Damian Graham, chief investment officer at Aware Super.

“Removing some of these companies from our benchmarks enables us to lower the carbon footprint of our portfolio, with only a modest change to our investment mix.”

He also said that excluding the major carbon emitters was good for returns.

“While many factors can contribute to the performance of companies and sectors, it is notable that the highest Australian listed carbon emitters excluded from Aware Super’s carbon constrained benchmarks returned 7 per cent a year over the past 20 years compared to an 8.5 per cent return for the ASX overall.”

Gas is not attractive

The super fund’s CEO Ms Stewart said that gas is off the agenda.

“It’s not seen as great long-term investment.”

She said that while gas will play a role in the transition and that some large scale gas projects may have to go ahead, from an investor’s perspective, major gas projects don’t stack up when assessed alongside other opportunities such as renewables.

Wai-Shin Chan agreed that gas was not a particularly attractive investment opportunity given his company’s commitments to becoming a net zero bank.

“It will be difficult to reduce the carbon footprint of our portfolio if we increase the fossil fuel footprint.”

(Visited 1 times, 1 visits today)

Join the Conversation


Your email address will not be published.

  1. Steggall is a greenwashing fraud who pilots an oversized SUV, and is a promotor of the most environmentally destructive, carbon dioxide proliferating mega road program in the state of NSW.
    Notwithstanding the IEA.
    The International Energy Agency said investment remained stuck at $480bn in 2018 and 2019, and will barely reach $300bn this year. The IEA’s Fatih Birol says well depletion is eroding 3pc of global supply annually. “We’re losing one North Sea each year,” he said.

    Eventually, there must be a crunch. Goldman Sachs says that moment is coming sooner than generally supposed.
    Mr Currie thinks Brent prices will reach $65 by the fourth quarter. From there, presumably, it is off to the races since he calculates that 8pc of global supply will vanish by 2025.

    America’s frackers in the Permian shale basin have stepped in quickly with fresh supply in previous mini-cycles but this time they are under much tougher financial discipline, and their best seams have mostly been tapped, The Permian basin has peaked and is headed in to a relatively swift decline.

    Westbeck Capital said the oil market is heading for a perfect storm. Insider buying by oil executives has reached record levels. There could soon be a buying scramble to unwind hedge contracts – de facto short positions – setting off a feedback loop. China and India are rushing to acquire stocks while crude is still below $50. “All the stars are aligning for a powerful bull market,” it said.

    Electric vehicles are not going to change the immediate equation for oil, even if 31pc of new car sales in Germany last month were EVs or hybrids. It will take decades to whittle down the global stock of petrol and diesel vehicles on the road.
    There are no guarantees that resource availability will allow mass adoption of EV’s they may remain the preserve of the rich.

  2. The post above includes:
    “The Zali Steggall bill includes an economy-wide net-zero target by 2050…”

    Compelling evidence I see indicates advocacy for “Net-zero GHG emissions by 2050” has NO BASIS in the latest climate science.

    2050 is TOO LATE.

    Long-term only aspirations are tantamount to denial of climate science evidence of an urgent and existential climate emergency.

    The latest climate science indicates if humanity cannot rapidly reduce human-induced GHG emissions from NOW on – NOT next decade, or by 2050 – then human civilisation as we know it is at grave risk of ceasing to exist later this century. What we/humanity do/does (or not do) in the next few years is likely to decide human civilisation’s fate.

    Exhibit #1:
    “Climate Reality Check 2020”, by Ian Dunlop and David Spratt – see:

    Exhibit #2:
    A US CBS News video published on its Facebook page on Oct 31 at 09:43, titled “2020 is a make or break election for the climate”, that includes an interview with world leading climate scientist Michael E Mann (who happened to be in Australia during the 2019-20 bushfire season), and where from time interval 02:06, a graph is displayed showing GHG emissions need to be reduced by 50% by 2030 and near zero by 2040. If global GHG emissions don’t peak until 2025, then GHG reductions would need to be more ambitious (15% year-on-year) to avoid catastrophic warming.

    Exhibit #3:
    A YouTube video titled “Will Steffen – Climate Change 2020 – Why we are facing an emergency – April 2020” published by Renew on Apr 23, duration 1:02:48. Professor Will Steffen is an Earth System scientist, and he is a Councillor on the publicly-funded Climate Council of Australia that delivers independent expert information about climate change.

    From time interval 0:18:21 through to 0:24:26, Will Steffen talks about potential ‘tipping points’ that could drive the Earth climate to a “Hothouse” state beyond human adaptation and control.

    From time interval 0:37:51, Will Steffen outlines:
    A COVID-19 type Response to Climate Change: Flattening the Curve:
    • From 2020: No new fossil fuel developments of any kind (coal, gas, and oil);
    • By 2030: 50% reduction in GHG emissions; 100% renewable energy;
    • By 2040: Reach net-zero GHG emissions – NET-ZERO BY 2050 is now TOO LATE to avoid catastrophic climate change.