The government continues to be caught between mounting the case that it’s serious about climate-change action and trying to stymie it by every practical means. Several stories in the media draw attention to the utter hypocrisy of its approach. Today, the ABC revealed that the Future Fund – Australia’s sovereign wealth fund – has invested more than $3 million in an Adani company building a rail link from the controversial Carmichael coalmine to a port on the Great Barrier Reef. Nine Media reports that Treasurer Josh Frydenberg has thrown his support behind a proposed inquiry that will grill financial regulators and banks choosing not to fund or insure mining projects due to climate risk. Guardian Australia reports that a leaked government discussion paper on an electric vehicle strategy, which it’s been working on for 18 months, includes no policies that would make it more affordable to buy electric vehicles. And earlier this week it was widely reported that Energy Minister Angus Taylor is putting together a new package to subsidise local oil refineries. Does the government think no one will notice that its words don’t match its actions?
Coalition MPs have been able to operate in a state of functional denialism for so long now – with support from News Corp and without significant challenge from Labor – that they seem to believe there is no impediment to continuing down the same merry road, until it literally melts. But the signs emerging from beyond our shores, at least, indicate the end of the road is approaching faster than anticipated.
Following last week’s embarrassing snub for Morrison in relation to the UN climate-change summit, and China’s blacklisting of Australian coal, it’s becoming ever harder to look away from the intense glare of global opinion. Equally important, the rising financial risk of denialism is becoming impossible to refute, despite the government’s best efforts.
The decision by the Future Fund to invest in a Carmichael-linked company is simply bizarre. The chances of the mine going ahead, and making a profit, are now vanishingly slim. China’s decision this week is probably the final nail, but it’s not like any responsible investors have been calling the mine a great opportunity in recent times. (And we won’t even mention the immorality of investing Australian taxpayer earnings into a climate time bomb.)
Worse, though, is the treasurer’s support for an inquiry into banks’ lending strategies. Big banks have ruled out financing new coalmines and coal-fired power stations for a reason: they are likely to be terrible investments. Coal companies are haemorrhaging globally, and Australian coal has been blacklisted by China. I’m going to repeat that again, for the benefit of the treasurer, who may be hard of hearing: Australian coal has been blacklisted by China. It happened this week. Why, now, would you pressure banks to invest in Australian coal?
As the Nine report points out, “The Australian Prudential Regulation Authority and Australian Securities and Investments Commission, both under Mr Frydenberg’s portfolio, are also expected to be asked to attend hearings, after they directed financial institutions to better consider the financial risks of climate change and international shifts away from fossil fuels.” Global ratings agencies and insurers are also wary of climate risk. And so they should be.
A few further points need to be made about Frydenberg’s decision. First, banks have the fundamental right not to invest in coal or fossil fuels. It is absurd for the government even to contemplate pressuring them to invest in declining and destructive industries. Who carries the rising risk to borrowers’ and lenders’ money? Not the government.
Second, Frydenberg personally looks ridiculous supporting an inquiry set to be chaired by Coalition climate sceptic George Christensen. Other Coalition MPs have been arguing for the best part of forever that the market decides where its money should flow. Now it’s George Christensen who decides? Frydenberg, the treasurer, who represents a Melbourne electorate strongly supportive of climate-change action, is setting a terrible example.
Third (and related), only three months ago, Frydenberg announced that the government would in effect dump the responsible-lending laws imposed by the Rudd Labor government following the global financial crisis. This was meant to lead to “less red tape” for banks, a loosening of credit rules and greater emphasis on self-responsibility. Now he’s implying that banks might be forced to make bad investments. As the kids say: LOL.
Finally, if the inquiry goes ahead as expected, we can look forward to a series of senior financial managers and analysts pointing out to Coalition sceptics that their attitudes are dangerous and outdated.
Banks, insurers, major trading partners, the UN, the OECD, scientists, public opinion… what will it take for the Coalition to give up its fossil-fuel addiction?