The Norwegian Parliament has just ordered its $A1.15 trillion Sovereign Wealth Fund to divest from coal. This represents the largest single divestment from fossil fuels in human history, and our biggest sign yet that the age of coal is over and the financial case for investing in fossil fuels is likely to disintegrate.
'Investing in coal companies poses both a climate-related and economic risk,' said Svein Flaatten, a Conservative member of the parliamentary finance committee.
350.org Australia believes Norway’s decision sets a groundbreaking precedent that is likely to drive a major new wave of fossil fuel divestment. 'With coal prices at an all time low and renewables increasingly bullish, it’s no surprise that major investors like Norway are getting their money out of this damaging sector.'
Over 220 institutions, including the Rockefeller Brothers Fund, Stanford University and French Insurance megalith Axa, who’ve committed to divest from fossil fuels in the past 12 months.
In the past week, 350.org and the Australian Religious Response to Climate Change (ARCC) have both questioned why Australia is apparently blind to the rejection of coal elsewhere. They say that it makes no sense for Australia to double down on it and open up massive new coal mines, like those in the Galilee Basin.
The ARCC adds moral argument to the economics that triggered Norway’s decision. 'It is shameful for a relatively wealthy country to be putting forward targets below the offerings of other nations with comparable economies.'
The moral cost of inaction is clear from numerous studies such as the Australian Government Department of the Environment's Climate Variability, Extremes and Change in the Western Tropical Pacific 2014 report, which details why the small island developing nations in our vicinity are among the most vulnerable to climate change.
The ARCC points out that coal and natural gas make up an unacceptably large proportion of our exports and that 95% of our energy consumption comes from fossil fuel sources when the OECD average is 81%. This, it says, should spur us on to more rapidly decarbonise our economy.
In a letter to the PM and the leader of the Opposition signed by religious leaders including the Anglican Primate and Uniting Church National Assembly President, ARCC described setting a reduction target comparable with that of other wealthy developed nations as a ‘moral imperative’. It specified that this should be 30% below 2000 levels by 2025, in line with the draft report issued by the Australian Government Climate Change Authority on 22 April.
Elsewhere in Eureka Street, John Warhurst characterises Australia as a once socially progressive nation that is now a laggard. For several decades around the time of Federation in 1901, Australia had an international reputation as a leader on issues such as votes for women, as well as other democratic reforms such as the secret ballot, and a living wage.
In this century, it is other countries such as Norway that are exercising decisive leadership. Nevertheless we will crash and burn economically and morally if we do not take take similar action.
Michael Mullins is editor of Eureka Street.
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01 June 2015
Well said Michael, and thank you for reminding us that morality is much more than an obsession with sex. Isn't that the point that Francis was trying to make recently?
02 June 2015
I'm not quite sure how low prices point to the end of coal usage. Surely the lower the price, the more it will be preferred, cet. par.? In any case, as we farewell fossil fuels (I strongly doubt it will happen for a long time), let's thank them for lifting the Western World from grinding poverty to easily the highest standard of living of the masses in history. Let's thank them in particular for saving whales and seals from extinction - one shudders to think how quickly these animals would have disappeared had they continued as a major energy source in the West absent the arrival of coal and oil. And let's remember that without them the forests of Europe would in all probability no longer exist, being long ago sacrificed for domestic heating and cooking needs. The poorest in the world today still rely on wood (and dung) for their energy sources and thus continue to ravage the forests around them. But in many other parts of the developing world, forests are growing back as fossil fuel use replaces wood. Perhaps we Westerners should reconsider whether it’s right to tut-tut as desperately energy-poor Africans ponder the use of the massive coal and other fossil fuel reserves they've discovered under their feet? Perhaps we should remember too that a huge number of Africans fleeing to Europe are doing so because of their energy poverty - something renewables are currently way behind fossil fuels in addressing. ($10 billion invested in renewables would supply enough base electricity for 27 million Africans, but in gas-fired would supply 90 million.) Indeed, considering the massive re-greening of the Sahel and other parts of Africa due (in part) to the global increase in the plant-food CO2, should we, ethically, be saying anything other than "Go ahead!"?
03 June 2015
Thanks for this essay Michael especially for highlighting not only the fact that there is a significant increase in the number of countries phasing out the use of coal in power generation but also adopting broader divestment policies.
A big sleeper in all this, and one which does and will continue to have major economic implications for coal producing countries like Australia is the fact that China and India are rapidly reducing dependence on coal power.
It will be interesting to see to what extent Pope Francis incorporates the impressive body of best scientific data on global warming and climate change and base his theological and pastoral conclusions on that.
One thing is certain, the NeoCons and their 'theological advisors' at the Acton and Napa Institutes, Legatus, Crisis Mag and First Things will continue to firing the flak at a document not year released but when it is and if they find it unacceptable, no doubt the hubris of the day will be, 'but it's not infallible!'