Today’s report from the Australian Coal Association (ACA) borders on classic investment bubble thinking. It denies or downplays key global trends with mistaken critiques. The coal industry is clearly struggling to grapple with the realities of avoiding 2oC warming, said The Climate Institute.
“The report borders on classic investment bubble thinking that smacks of desperation. In fact, global investors and regulators are beginning to take seriously the exposure of high carbon investments that can not, and should not, be developed if we are to avoid dangerous global warming,” said John Connor, CEO of The Climate Institute.
The report -- Fossil Fuels: A sound investment in a growing world from Alan Oxley’s ITS Global Group -- was commissioned by the ACA and released today.
“The attempt to critique the latest research from The Climate Institute and the Carbon Tracker Initiative on Australia’s unburnable carbon is gratifying, but largely ignores similar analysis from the International Energy Agency and financial institutions such as Standard & Poors, HSBC and others.”
“The reality is that many institutional investors are beginning to take the concept of unburnable carbon seriously. Just last week, investors held a historic summit in Hong Kong focused on their role in avoiding the economic costs of dangerous climate change and launching a new global low carbon investment register.”
Connor added: “The ACA’s report makes incorrect claims about the status of the commitment to avoid 2oC warming in global climate negotiations. It also downplays the continued focus on this goal by leading countries, which reaffirmed their commitments in the G8 communique issued overnight.” (See page 14 of the communique.)
“The report ignores the range of social, political and technological drivers that can lead to action to avoid 2oC warming. It also only selectively quotes the International Energy Agency, which has endorsed the reality that there are significant reserves of fossil fuels on asset books that cannot be burnt if we are serious about climate change.”
“The critique misses the point of the work of The Climate Institute and its partner organisation, the Asset Owners Disclosure Project. Our call is not necessarily for full divestment, but for far greater consideration and disclosure of carbon and climate risks from investors, as well as greater investment in low carbon solutions.”
“Such consideration and disclosure of carbon risks should have investors considering their exposure to high carbon assets, in particular the value of investments seeking to expand the deployment of fossil fuel reserves.”
“Finally, The Climate Institute can hardly by labelled as ignoring the importance of carbon capture and storage. We have repeatedly called on industry and government to speed up the technology’s deployment, and have been public on why Australia and the world should pursue it,” concluded Connor.