Parliament’s Joint Standing Committee on Trade & Investment Growth will soon begin an inquiry into matters relating to the ANZ Bank’s decision to stop funding projects associated with the coal industry.
Last October ANZ announced it would stop lending money for thermal coal projects. The Bank was at it again in February, proclaiming it would stop funding Newcastle’s coal port. What’s next? High sugar drinks? Fatty food?
Banks’ debt finance is not the only source of capital for investors in the coal mining industry, but it remains important. And lending is not the only problem. As the Federal Parliamentary inquiry will soon reveal, the banks are telling medium-sized businesses that work for the mines that they are watching their exposure to the coal mining industry. Extraordinarily, insurance companies are sending the same message to the same people.
It’s been a slow drip. In 2015 Newcastle Council decided to divest itself of any investments in fossil fuel industries. Yet its coal loaders are significant employers. Last year, the University of NSW – home to one of Australia’s proudest mining schools – took the same decision.
The University’s Richard Holden is doubling down. Sharing his wisdom in the UNSW’s online news bulletin last week, the Economics Professor saw opportunity in the earlier-than-expected closure of Yallourn power station when he wrote:
“The crucial question in all of this is whether Australia’s coal-fired power stations are being closed too slowly – or even too quickly. It’s hard to know without a price on carbon to create a level playing field for renewable energy and fossil fuels.”
Professor Holden went on to insist that we need a carbon tax that reflects the “social cost of carbon” before suggesting that cost is $65 per metric tonne. In doing so he answered his own question. His carbon tax would shut down our coal-fired generators sooner.
He says we risk “blackouts or brownouts”. But the real threat to supply reliability is his proposed carbon tax and all those who believe we can keep putting more and more renewable energy into the grid without holding on to our coal generators for all their physical lives.
In the last two years alone, we’ve added variable solar generation to the system equal to the capacity of 6 Liddell powers stations. Since their peak in 2007, Australian’s greenhouse gas emissions have fallen 21.7 per cent. Since 1990, our per capita emissions have fallen 46 per cent.
We’ve achieved a lot and we’ll do more. But we can’t close base-load coal-fired power stations and reject new gas-fired power stations without causing blackouts and driving up energy prices. And we can’t hope to put more renewables into the grid without new supplies of firming power, namely gas fuelled.
If the banks, state governments, and our public institutions want to desert our fossil fuel industries, they surely have a responsibility to tell us what they are prepared to do to manage the impact on our economy, jobs and our energy system. Remember, the banks benefit from funding guarantees provided by the same government which purports to represent the interests of those who will lose their jobs and suffer bigger electricity bills as a result of bank behaviour. You can be sure those participating in the looming parliamentary inquiry will labour that point.