Australian Coalmines Are One Of Riskiest Investments In The World – Report

The Guardian - Michael Slezak

Oxford University research also finds Australian, Chinese and US coal-fired power stations are the most vulnerable to environmental dangers

In 2014 the city of Linfen, in Shanxi province, China, was listed as the most polluted city on Earth. Australian, US and Chinese coal-fired power stations are the most vulnerable to environmental risks for investors. Photograph: Wu Hong/EPA

Australian thermal coalmines are some of the riskiest in the world for investors because of their exposure to environmental dangers, according to a report from Oxford University.
The report – which was supported by Norges Bank Investment Management, managers of Norway's government pension fund, the world's largest sovereign wealth fund – also found that Australian, Chinese and US coal-fired power stations were the most vulnerable to environmental risks.
The researchers assessed the assets of the top 100 coal-fired utilities and top 20 thermal coalmining companies for their exposure to a range of environmental risks, including climate-change policies, water stress, air pollution and competition from renewables and gas.
Ben Caldecott , the lead author of the report, said its purpose was to provide information for investors, the broader public and the companies.
"Not all companies have the same levels of risk exposure and it is important to understand the differences in order to manage risk, to prompt engagements with company management, or to decide whether to divest," he said.
Caldecott said the findings meant investors should be very cautious about supporting projects associated with thermal coalmines in Australia, such as Adani's Carmichael mega-mine and the Shenhua Watermark mine.
Australian mines had a "high" level of risk associated with their unusual reliance on exporting coal, the report found. Australia exports more than three times as much coal as it consumes locally, and so relies on the global market, where demand is falling.
Tim Buckley, from the Institute of Energy Economics and Financial Analysis, said the failing global demand was under-appreciated in Australia.
"We only export to the extent that someone wants our product," he said. "And when Indian imports dropped 34% year-on-year and Chinese imports dropped by 31%, the two biggest importers of coal are fundamentally moving away from imported coal."
Australian mines were also rated as facing a "high" level of risk associated with potential environmental regulation and the impact of protests and activism.
Buckley said the export market was shrinking, partly because of the competition faced by renewables.
That was reflected in the report's analysis of risks facing coal-fired power utilities, where competition from renewables, along with lower electricity use and strong evidence of a "utility death spiral", was assessed as increasing risks of investment in Australia.
A utility death spiral occurs when sources of power such as rooftop solar leave fewer people sharing the cost of maintaining the traditional electricity grid, pushing its cost up, thereby making rooftop solar even more competitive.
"A large country with dispersed populations, plentiful sun and falling electricity demand spells the perfect storm for Australian utilities," the report said.
US coal power faced a similar degree of environmental-related risk, but from slightly different sources. Their utilities face stiff competition from gas and government policies supporting renewables. Along with Chinese coal-powered utilities, those of the US and Australia faced the highest degree of environmental-related risk.
The researchers calculated the risks posed to each company by collecting all the information they could about the companies' assets, rather than just relying on corporate reporting. They analysed satellite imagery of the assets to determine their precise locations, and sometimes the technology they employed.
Caldecott compared the lack of easily accessible information with that which allowed the 2008 financial crisis to occur.
"Investors have almost no idea about the real environmental performance of companies they own," Caldecott said.
"You actually need to interrogate the exposure of individual assets within a company portfolio, in the same way that investors should have paid more attention to individual mortgages in the mortgage-backed securities and collateralised debt obligations that caused the financial crisis."

Links

• Coal from Carmichael mine 'will create more annual emissions than New York'
• Barnaby Joyce says he opposes Shenhua mine 'as minister', contradicting Abbott

The Power of Women: Combating Blizzards, Droughts and the Changing Climate

Huffington Post - Lorena Aguilar

In the past seven days, the east coast of the United States was hammered with one of the biggest snowstorms it has ever seen and a breaking report was published stating that 2015 broke records as hottest year in history by about 0.14°C. All around us, extreme weather is intensifying and climate change is finally being recognized as one of the most serious threats of this century -- but a clear path to mitigating the challenges of a warming planet remains unseen. This means an uncertain future for those who are least resilient to impacts, have the fewest resources to cope, and have limited protection from ever increasing climate-related threats.
At the Paris climate conference (COP21) in December, 195 countries adopted the first ever universal, legally binding global climate deal that aims to limit global warming to below 2°C. The Paris Agreement also provides a framework to support those in developing countries that stand on the front lines of climate change. This is especially important for the women and girls in every region who are experiencing the most severe impacts of climate change due to the social, economic and political barriers they face to protect themselves, their families, and their communities and to build resilience to the impacts of climate change. The new Agreement does partially reflect the importance of gender equality: the preamble includes gender equality and empowerment of women; adaptation and capacity building articles include that action must be gender-responsive; and implementation of the decision is meant to take into account gender balance. Unfortunately, however, other essential texts--such as gender equity with respect to finance and technology needs assessments--were lost in the last rounds of intense negotiations, meaning that a true paradigm shift towards gender equality, and understanding the intrinsic importance of it in relation to fighting the climate battle, is still needed. Gender must be an integral thread woven throughout all parts of climate change policy, planning and programming.The President of Chile, Michelle Bachelet, summarized it best, saying: "Climate change isn't only an environmental issue it is a social problem, perhaps it is the greatest political issue that will bring us together in the next few years. As we aspire to achieve climate justice, we must consider the inclusion of the gender dimension because women are victims, but they can also be a significant part of the solution to the climate issue." [From translation]
It is important to highlight the invaluable contributions, expertise, and perspectives of the women who participated in the United Nations Framework Convention on Climate Change (UNFCCC) negotiations. The countries that had women as heads of delegations, as well as Parties with gender expertise, such as Chile, Mexico, Costa Rica, and the Dominican Republic, took the lead in ensuring that social concerns, gender equality and human rights--were fully addressed in the Paris Framework. It is also fundamental to recognize the role and negotiation skills exhibited by the Executive Secretary of the UNFCCC, Ms. Christiana Figueres, at COP21. Undeniably, she is one of the driving forces behind the gender-responsive elements of the Paris Agreement.

GGO team participates at COP21

The power of women's leadership has proven true in other environmental arenas outside of the climate change meetings. For instance, countries with higher female parliamentary representation are more likely to set aside protected land areas, as a study of 25 developed and 65 developing countries reveals; and to ratify international environmental treaties, according to a study of 130 countries. In addition, of the 49 countries that reduced carbon dioxide emissions between 1990 and 2007, 14 had a very high Human Development Index rank, specifically 10 of which with higher than average female parliamentary representation (Human Development Report 2011). Another telling example occured this past Tuesday, when the US Senate reconvened after one of the biggest snowstorms that Washington, D.C. has ever seen and the only people present were women (floor managers, pages, parliamentarians). Speaking about this incident, Alaska Republican Senator Lisa Murkowski reminds us of the power of women in difficult circumstances: "Something is genuinely different, and I think it's genuinely fabulous. So perhaps it just speaks to the heartiness of women, that you put on your boots and put your hat on and get out, slog through the mess that is out there."
Inclusive and equitable climate policies and programs can deliver social and economic development co-benefits and will support steps towards sustainable development. Very often initiatives designed without a clear understanding of the realities of people's lives, including the social and cultural structures that can ignore and sideline women and girls, are unlikely to achieve their intended objectives. For this reason, the International Union for Conservation of Nature's (IUCN) Global Gender Office (GGO) has created a suite of knowledge products covering a range of issues that provide policymakers and practitioners information, best practices, and tangible strong examples of gender-responsive climate change so that they can incorporate these lessons into their work.
We at the GGO believe that the Paris Agreement stands as a critical turning point for the global community in its recognition of the importance to act on climate change. We are grateful that it does include indications of its growing understanding of the vulnerability of women in many regions of the world and the critical need to integrate women, their empowerment, and gender equality concerns proactively. And ultimately, we look forward to future opportunities to support implementation for gender-responsive climate change policies and projects.

Soil Productivity Cut By Climate Change, Making Societies More Marginal: Studies

Fairfax - Peter Hannam

Ethiopia, one fragile dryland nation, is in the grip of its worst drought in 50 years. Photo: Jay Court

The health of the world's soils hinges on the abundance and diversity of the microbes and fungi they contain, and environmental changes including from global warming will undermine their ability to support humans and other species, according to two new studies.
While animal and plant diversity has long been understood to be important, the multiple roles of soils – from the decomposition of organic matter to nutrient cycling and carbon fixing – have been less researched.
One of the studies, published in Nature Communications on Thursday, examined microbial diversity in 78 drylands on all inhabited continents and 179 sites in Scotland. It found that the loss of varieties – such as from climate change increasing arid zones – undermined the services the soils provided.

A property at Brewarrina in October 2013: as much as 75 per cent of Australia is arid. Photo: THE LAND

"As the aridity of soils goes up, the microbial diversity and abundance is reduced," Brajesh Singh, a professor at Western Sydney University and an author of both papers, said. "As the soils' multi-functions are reduced, so there are social and economic consequences."
The second paper, published recently in the Proceedings of the National Academy of Sciences journal found the area of the world's drylands – where rainfall and evaporation rates are roughly balanced – is increasing.
Now covering about 41 per cent of the land surface – and home to a similar share of the world's population – these drylands will increase by at least a tenth by 2100 because of overgrazing, erosion and climate change.

Species other than humans will also be affected by less productive lands. Photo: Supplied

"Ninety per cent of human settlements in dryland are based in developing countries, posing serious challenges to food security, carbon sequestration and desertification," Professor Singh said.
David Eldridge, a University of NSW-based arid zone specialist and a co-author of the PNAS study, said there is already evidence of "a consistent decline" in the soil microbes and fungi in many regions.
Drylands account for as much as three-quarters of Australia and the functions of soils, including their ability to hold water and withstand erosion, will be affected by diversity loss within them, he said.
Severe degradation of as little as 10-20 per cent of dryland would have an impact on some 250 million people as well as harming the viability of many other species that rely on soil health, from plants to the animals that eat them, Professor Singh said.
While rising carbon dioxide levels – such as from burning fossil fuels – could spur plant growth, such an outcome required available nutrients and water. Those elements, particularly water, that may become less available with climate change, he said.

Links

• Severe thunderstorms to cap city's wettest January in 28 years
• Climate change could worsen diseases like Zika virus, experts say
• Australia sinks on 'most credible' environmental index in the world