On listening to the people, the banks and country
29 May 2014 — The Minerals Council of Australia says divestment isn’t working. So why is it considering lobbying the Feds to ban divestment campaigns and conducting research on the fossil fuel divestment movement led by 350.org?
In a report by JWS Research, commissioned by the Minerals Council, “40 one-on-one interviews with all classes of the local professional investment sector” found that divestment had generated little traction in the Australian market, and there was “very little reported pushback” from either institutional or “mum and dad” investors, the Australian Financial Review reported.
The report wasn’t all good news though. It found that the distaste for coal was being “shaped almost exclusively by its prevailing market conditions”.
“At the macro level, coal is seen to be an under-performing investment at this time due to prevailing market conditions,” the report said. “This assessment is not being influenced by the divestment campaign and is considered to be cyclical.”
So, the reason Lend Lease, Deutsche Bank and HSBC have pulled out of financing Abbot Point, and AMP Capital today (Thursday) announced it would dump fossil fuels out of its “responsible” funds, is due to coal’s poor investment profile then.
Responding to the AFR article, Blair Palese of 350.org wrote an article for us today saying that the Minerals Council research was an “own goal”, showing 33 per cent of Australians were aware of the fossil fuel divestment movement, and 21 per cent were considering divestment. Not bad for a new movement, she says.
Palese also says in a letter to the AFR that the divestment campaign “simply aims to hasten the inevitable decline of coal caused by growing reputational, financial and regulatory risks”.
“We have never been under the illusion that investors would dump coal assets purely because of our activities,” she says.
Chief executive of the Climate Institute John Connor says it’s clear the Minerals Council is worried.
He said it was investigating the extent of interest in divestment campaigns, which showed how serious it was taking the threat.
Asked about the findings of the report, Connor said it was hard to speculate on its validity.
“It’s not clear who they asked,” he told The Fifth Estate. The report made mention of fund managers, who are chronically shortsighted, and it’s actually those who give the mandate to fund managers who are the key players, he said.
“We know there is an emerging focus on this amongst those institutional investors.”
Divestment still a nascent movement
Connor says this is still just the start of the divestment movement.
“We’ve been working on this really since 2008. It’s not just about divestment; it’s also about transparency for super fund members about the strategies their funds are taking.
“And there still isn’t enough proper incorporation of climate and carbon risks in super fund strategies.”
This is the work being tackled by the Climate Institute’s Asset Owners Disclosure Project.
The report also mentioned quantitative research by JWS that found 56 per cent of people think coal is extremely important or very important to the national economy.
“As ever, the people get it,” the AFR mused.
But was the right question asked? Connor thinks the more important question was, “Do people want coal to be in that position?”
The numbers in the past show people far prefer solar, wind and alternatives to coal.
“This really is an issue that’s crystallised in the last 12 months in what’s otherwise been a bleak landscape.
“This report is not the end of the issue; it’s a snapshot in time. It’s very much the beginning of this trend, not the end, let alone the middle.”
Coal’s future open to debate
The JWS report says that “there is a perception that renewable and non-coal energy sources will assume a greater role in the global energy mix, but that coal demand will remain steady in the long term”.
It also says there is “a minority view that the prevailing market conditions for coal are being driven somewhat by a demand from other countries for renewable energy sources”.
Tim Buckley, director of Energy Resource Studies Australasia at the Institute for Energy Economics and Financial Analysis, told The Fifth Estate that missing the very real global signs of a move from coal would be setting up Australia for “a massive fall”.
China was busy investing heavily in gas, nuclear, solar, wind, smart grids, smart meters: “everything they can to diversify [from coal]”, he said.
“Their actions speak large volumes.
China committed to “everything but coal”
“There’s some very clear evidence that demand for coal will peak within the next year or two within China,” driven by structural change and a continued commitment to “everything but coal”.
He says that forecast demand growth for coal has not eventuated and the industry is “burying itself by failing to look forward”.
Japan is turning down demand, dramatically
He says another crucial neighbour, Japan, is putting enormous resources into energy efficiency and solar since taking nuclear plants offline after the Fukushima disaster.
That nuclear plants had been turned off yet coal demand had remained virtually the same speaks volumes about Japan’s priorities.
“There’s a permanent improvement in efficiency of housing and commercial buildings that will continue to erode demand for coal,” Mr Buckley says.
Japan is a good litmus test of appetite for coal, as it imports virtually every unit of fossil fuel.
“What they’re doing in solar is revolutionary.”
But we’re stuck in the Stone Age
Despite this, the Abbott government is pressing on with unwavering support for the dirty end of town.
“The Abbott government is running a hard-right ideology and protecting the big end of town, at the expense of everyone else,” Greens leader Christine Milne said on Thursday, responding to Tony Abbott’s speech to a Minerals Council dinner the night before.
At the Minerals Council dinner Abbott didn’t mince words, saying the government was behind the fossil fuellers.
“I want you to know that you are not in hostile territory; you are here amongst people who want you to flourish and if there is one message that I can give you this evening, it is that this government wants you to succeed, because when you succeed, our country succeeds,” Abbott told the room.
Hopefully when the carbon bubble bursts, the government will have woken up and thrown some support behind renewables.
Yay for the NSW gov
Today’s announcement that the conservative NSW government has stepped up in support of the Renewable Energy Target is a positive sign in a what has been a few weeks of negativity, and hopefully other state governments will get behind a target that will see less carbon intensity of the grid and cheaper electricity prices in the long term.
Keeping the spirits flying
So what’s your personal theme song to keep the sustainability spirits up? “I will Survive”? Or is it time for Twisted Sister’s “We’re not Gonna Take It?”
As it’s National Reconciliation Week, maybe the best theme song is Paul Kelly and Uncle Kev Carmody’s “From Little Things Big Things Grow”.
The sustainability effort we have today has grown in a similar way to how the reconciliation and Aboriginal and Torres Strait Islander recognition movements grew from the actions and bravery of individuals like Uncle Vincent Lingiari, Uncle Eddie Mabo and Auntie Bonita Mabo, and all of those who rode the Freedom Ride, camped at the Aboriginal Embassy or marched for citizenship.
In the same way what the Aboriginal elders and the sustainability movement have in common is that it’s all about caring for country.
Each and every one of us is part of the solution, and there’s no stopping it.
Yes, it can be defunded. It can be made more difficult. It can be sidelined in the mainstream media and consigned to the “special interest group” category of current affairs.
But we have the United Nations, the International Monetary Fund, the World Economic Forum and all those other heavyweights in our corner, and they are probably going to be around long after the current front bench is a dim memory in the political locker room.
Timber is go – but get the roadblocks out of the way
The timber innovations popping up around the place certainly seem to be a sign that no matter what happens at the policy level, every little bit of clever thinking can be the start of a path towards major outcomes.
There are sticking points that point to the short-sighted lunacy and silo thinking inherent in many policies, not to mention downright contradictions. On the one hand, we have the much trumpeted Carbon Farming Initiative. Strangely though, there is as yet no sign that will stimulate investment in plantations for productive timber use.
And, the Department of Environment information states that existing productive plantations on private land that fall under the Managed Investment Fund schemes cannot claim anything as carbon farming.
The reason, DoE states, is so the growth of plantations does not threaten farming. This seems a bit odd, given the government is throwing money at the mining industry to go and muck up farmland looking for more fossil fuels. Yup, classic bad policy. Discourage the thing that mitigates climate change while feeding the beast that is a substantial cause of it [we shake our heads].
Time to mentally play those anthems again, and take some time to look at the good people and good deeds which continue to proliferate in our little patch of the globe. And give a big shout out to all the innovators, scientists, forward looking designers, engineers, ethical investors, green developers, sustainable builders and thought leaders out there. Thank you. Together we will outlast, outsmart and outwit the forces that seek to hold the susty movement down.
As Uncle Kev and Paul Kelly sing:
“But this is the story of something much more,
how power and privilege cannot move a people,
who know where they stand, and stand in the law
From little things, big things grow.”