Fossil fuel divestment is worth $7tn globally yet Australia still clings to coal | Blair Palese

While the Australian government lags behind on climate change action, consumers, local councils and energy companies lead the way to clean energy

The Turnbull government has been an utter disappointment on so many things but nowhere as much as on the biggest issue of our time: climate change.

Unable to shrug off the legacy of the climate-denying Abbott government, it has been bullied out of any climate change ambition by science-denying fringe elements on the right.

The list of dishonourable mentions are long. Despite signing the Paris agreement last year, the Australian government has consistently undermined any efforts to keep the world below the safe level of 2C. Last week’s backflip on the idea of a carbon-intensity emissions trading scheme – supported by most of the banks and the energy sector as the best way to reduce emissions and provide a level-playing field – is just the latest in a long line.

But the biggest worry is seeing Turnbull’s coal-loving ministers push through the Adani mega coalmine in Queensland, replete with the offer of a $1bn taxpayer-funded loan to build a railway line through rich farmland to a coal terminal on the Great Barrier Reef. If constructed, the Adani mine will almost certainly condemn the Great Barrier Reef to the annals of history, not to mention blowing almost any chance of us living in a safe climate future.

But while climate change is mired in partisanship and cheap political point-scoring on a federal level, Australian organisations, driven by a strong market shift away from polluting fossil fuels, particularly coal, are leading the way towards the clean economy.

On Tuesday a report by global financial outfit Arabella shows that fossil fuel divestment is now worth an astounding A$7tn globally. It spans almost 700 organisations as diverse as the Norwegian Sovereign Wealth Fund, the City of Newcastle and the Australian National University.

This $7tn that is not invested in coal, oil and gas provides a significant financial indicator to back up what we already know: fossil fuels are on the nose.

While Australia may be lagging on a government level, many of our businesses are leading the world in waking up to the risks posed by fossil fuels and the opportunities of the new clean economy.

The Arabella report highlights that Australia has the most divestments per capita of any developed nation. And these organisations that have divested are by no means radical. It is groups such as the Australian Capital Territory’s government, Australian Academy of Science, the Royal Australasian College of Physicians and the National Tertiary Education Union. Add to the mix almost 30 local government councils, 10 super funds, a handful of our top universities and you get the picture.

There is even a chance you live in a fossil-free council considering that more than one in 10 Australians now live in a council area that has sworn off fossil fuels.

In’s work, we deal closely with banks, energy companies and organisations that are constantly weighing up the risks associated with fossil fuel investments. All of them have told us just how quickly things are changing.

The recently released Melbourne University sustainability plan acknowledges the changing market dynamics:

Companies which effectively manage environmental, social and governance responsibilities should yield better risk-adjusted returns over the long term.

And as coal enters structural decline, clean energy is booming. Consumers and local government are bypassing government barriers and again leading the way.

Local governments, such as the City of Melbourne and others such as the ACT are teaming up to source their energy from renewables – thus providing security for investors to build more clean energy infrastructure.

The Renewable Energy Benefits: Measuring the Economics report that came out earlier this year showed that doubling renewable energy’s current share of the global energy mix to 36% by 2030 would create 24 million jobs and deliver about half of the emissions reduction necessary under the Paris agreement.

For Australia this would boost our economy by 1.7%. The clean energy rush would create a swathe of new jobs in regional areas to meet the demand to transition from our dirty grid to the new renewable one.

Already we are seeing a transition that is well under way. Just last week Energy Australia announced an investment of $1.5bn into new wind and solar projects to meet its renewable energy target. It also announced support for a price on carbon – the same day the Turnbull government backflipped and said a carbon price was now off the table. Something is seriously wrong when the country’s biggest climate polluters are calling for a tax on their operations and the government refuses to consider it.

Energy Australia’s announcement is one of many from around the country: Eco Energy is building a new solar plant in regional Queensland; AGL is building solar plants across regional New South Wales, including a new one near Broken Hill; and Origin Energy is seeking to divest much of its oil and conventional gas assets to focus more on renewables.

The key now is to ensure our big three energy companies collectively push beyond our rudderless federal government, not fall into the idea that gas is the answer over coal, and quicken the pace to clean energy. It helps that at this point in time, both large-scale wind and solar projects are now cheaper than fossil-fuel energy sources.

Over the past few years, leadership from business has been the main driver in Australia’s route to decarbonisation. But businesses can’t bear the load alone and they have recognised this. In November, Andrew Vesey, the chief executive of AGL, was one of 17 eminent Australians who called on the government to stop blocking the transition, “facilitate and accelerate the inevitable closure of coal plants” and “create an attractive sustainable investment environment for clean energy”.

If we are to benefit from the jobs of the new economy and ensure a safe future for the planet, Malcolm Turnbull and the energy minister, Josh Frydenberg, must stop listening to the science-denying members of their party and instead start making some real decisions about what our energy and economic future will look like.


Blair Palese

The GuardianTramp

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