10/02/2016

Australian Super Funds Lose $5.6 Billion On Fossil Fuel Investments

Renew Economy - Julien Vincent

Having analysed the returns of fifteen of Australia’s largest superannuation fund options over the past two years, Market Forces estimates that those options have collectively lost over $5.6 billion on their fossil fuel investments over that time.
Our new report Burned details this analysis, and highlights the urgent environmental and moral need for super funds to divest their coal, oil and gas holdings. Click here to read the full report and download a copy.
Fossil fuels are causing massive environmental damage and driving climate change, and Australians are concerned about prospect of financially supporting the dirty coal, oil and gas industries. Despite this, the vast majority of Australian super funds remain invested in fossil fuels.
To make it as easy as possible for super fund members ensure that their money is aligned with their values, we have recently upgraded our Super Switch website. Super Switch allows users to examine their super funds’ exposure to fossil fuels, and take action to get their retirement saving out of coal, oil and gas.

Many Australian super funds have recognised spoken publicly about climate change and the risks it poses to fossil-fuel related assets. In the wider financial world, there has been a growing body of opinion to suggest that fossil fuel assets are in danger of being left stranded as the world moves to limit global warming.
Now, there is some hint that these dire warnings are being realised, as coal, oil and gas company stocks have underperformed the world index over the past two years – check out the graph, which compares the performance of coal, oil and gas company stocks to the world index throughout 2014 and 2015.
Due to their investments in these companies since January 2014, the fifteen super options we analysed lost an average of $1,109 per member. See the table below for more detailed analysis of each of the fifteen funds’ losses.

The Paris climate summit in December 2015 underscored the desperate need for global action on climate change. To have any hope of meeting the internationally agreed target of less than two degrees of temperature rise, we cannot continue to invest in companies that would expand or prolong the fossil fuel industry.
We need super funds to fully disclose their current fossil fuel holdings so that they can be held accountable for their investment decisions. We also need them to immediately divest from pure play fossil fuel companies and engage with diversified companies to encourage a swift exit from the fossil fuel sector.
Super fund members can use our new and improved Super Switch website to examine their exposure to the coal, oil and gas industries and take action to get their retirement savings out of fossil fuels.

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Supreme Court Deals Blow to Obama’s Efforts to Regulate Coal Emissions

New York Times -  Adam Liptak & Coral Davenport

Steam rises from the stakes of the coal-fired Jim Bridger Power Plant outside Point of the Rocks, Wyo., in 2014. Credit Jim Urquhart/Reuters

WASHINGTON — In a major setback for President Obama’s climate change agenda, the Supreme Court on Tuesday temporarily blocked the administration’s effort to combat global warming by regulating emissions from coal-fired power plants.
The brief order was not the last word on the case, which is most likely to return to the Supreme Court after an appeals court considers an expedited challenge from 29 states and dozens of corporations and industry groups.
But the high court’s willingness to issue a stay while the case proceeds was an early hint that the program could face a skeptical reception from the justices.
The 5-to-4 vote, with the court’s four liberal members dissenting, was unprecedented — the Supreme Court had never before granted a request to halt a regulation before its legal fate had been decided.
“It’s a stunning development,” Jody Freeman, a Harvard law professor and former environmental legal counsel to the Obama administration, said in an email. She added that “the order certainly indicates a high degree of initial judicial skepticism from five justices on the court,” and that the ruling would raise serious questions from nations that signed on to the landmark Paris climate change pact in December.
In negotiating that deal, which requires every country to enact policies to lower emissions, Mr. Obama pointed to the power plant rule as evidence that the United States would take ambitious action, and that other countries should follow.
Opponents of Mr. Obama’s climate policy called the court’s action historic.
“We are thrilled that the Supreme Court realized the rule’s immediate impact and froze its implementation, protecting workers and saving countless dollars as our fight against its legality continues,” said Patrick Morrisey, the attorney general of West Virginia, which has led the 29-state legal challenge.
“There’s a lot of people who are celebrating,” said Jeff Holmstead, a lawyer with Bracewell & Giuliani, a firm representing energy companies, which are party to the lawsuit. “It sends a pretty strong signal that ultimately it’s pretty likely to be invalidated.”
The challenged regulation, which was issued last summer by the Environmental Protection Agency, requires states to make major cuts to greenhouse gas pollution created by electric power plants, the nation’s largest source of such emissions. The plan could transform the nation’s electricity system, cutting emissions from existing power plants by a third by 2030, from a 2005 baseline, by closing hundreds of heavily polluting coal-fired plants and increasing production of wind and solar power.
“Climate change is the most significant environmental challenge of our day, and it is already affecting national public health, welfare and the environment,” Solicitor General Donald B. Verrilli Jr. wrote in a brief urging the Supreme Court to reject a request for a stay while the case moves forward.
The regulation calls for states to submit plans to comply with the regulation by September, though they may seek a two-year extension. The first deadline for power plants to reduce their emissions is in 2022, with full compliance not required until 2030.
The states challenging the regulation, led mostly by Republicans and many with economies that rely on coal mining or coal-fired power, sued to stop what they called “the most far-reaching and burdensome rule the E.P.A. has ever forced onto the states.”
A three-judge panel of the United States Court of Appeals for the District of Columbia Circuit in January unanimously refused to grant a stay.
The court did expedite the case and will hear arguments on June 2, which is fast by the standards of complex litigation.
The states urged the Supreme Court to take immediate action to block what they called a “power grab” under which “the federal environmental regulator seeks to reorganize the energy grids in nearly every state in the nation.” Though the first emission reduction obligations do not take effect until 2022, the states said they had already started to spend money and shift resources to get ready.
Eighteen states, mostly led by Democrats, opposed the request for a stay, saying they were “continuing to experience climate-change harms firsthand — including increased flooding, more severe storms, wildfires and droughts.” Those harms are “lasting and irreversible,” they said, and “any stay that results in further delay in emissions reductions would compound the harms that climate change is already causing.”
In a second filing seeking a stay, coal companies and trade associations represented by Laurence H. Tribe, a law professor at Harvard, said the court should act to stop a “targeted attack on the coal industry” that will “artificially eliminate buyers of coal, forcing the coal industry to curtail production, idle operations, lay off workers and close mines.”
The E.P.A., represented by Mr. Verrilli, called the requests for a stay “extraordinary and unprecedented.” The states challenging the administration’s plan, he said, could point to no case in which the Supreme Court had “granted a stay of a generally applicable regulation pending initial judicial review in the court of appeals.” In a later brief, the states conceded that point.
Mr. Verrilli said judicial review of the plan, including by the Supreme Court, will be complete before the first deadline for emissions reductions in 2022.
“There is no reason to suppose that states’ duties under the rule will be especially onerous,” Mr. Verrilli wrote. “A state can elect not to prepare a plan at all, but instead may allow E.P.A. to develop and implement a federal plan for sources in that state.”
The two sides differed about whether current declines in coal mining and coal-fired power generation are attributable to the administration’s plan. “Some of the nation’s largest coal companies have declared bankruptcy, due in no small part to the rule,” a group of utilities told the justices.
Mr. Tribe added that the plan “will cause the closure of 53 coal-fired plants in 2016 and another three in 2018.”
A coalition of environmental groups and companies that produce and rely on wind and solar power said other factors were to blame for coal’s decline.
“These changes include the abundant supply of relatively inexpensive natural gas, the increasing cost-competitiveness of electricity from renewable generation sources such as solar and wind power, the deployment of low-cost energy efficiency and other demand-side measures, and increasing consumer demand for advanced energy, as well as the rising costs of coal production and the high costs of maintaining very old coal-fired plants,” they wrote.

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Australia's Chief Scientist Says He Was Not Warned About CSIRO Climate Cuts

The Guardian

Alan Finkel tells Senate estimates he only found out about the shedding of 350 staff from climate change research when it was publicly announced
Australia's chief scientist, Alan Finkel. Photograph: Lukas Coch/AAP

Australia's chief scientist, Alan Finkel, said he was not told about cuts to CSIRO's climate change research prior to it being publicly announced, and said continuing the organisation's work would not be simple.
At Senate estimates on Wednesday, Finkel was asked by Labor senator Kim Carr when he found out the CSIRO would be cutting 350 staff over two years from climate change research programs. "When they were publicly announced," Finkel responded.
Finkel said since the announcement he had been discussing with leaders of other research bodies, including universities and the Bureau of Meteorology (BoM), as to how the CSIRO's research could be maintained.
Director of the BoM, Rob Vertessy, told Senate estimates on Monday he was only told of the cuts 24 hours before they were publicly announced. Vertessy said if the CSIRO were to drop its climate modelling work "it would leave a hole in the national development capability".
Prior to being questioned, Finkel delivered a statement addressing the CSIRO cuts. "There is no question that Australia needs a continuous and highly effective commitment to climate science, both to meet our national needs and to fulfil our international commitments," he said.
"Our most immediate national concern must be to ensure that long-term data collections will be funded and staffed, and that the climate modelling capabilities developed by the CSIRO will continue to be made available for scientists to use and refine.
"I am pleased that the CSIRO has this week committed to working with stakeholders to develop a transition plan to maintain this capacity."
Finkel said other research institutions potentially had the capacity to take on some of the CSIRO cuts, but it would not be simple.
"I'm not saying it's a simple case of absorbing the changes that have happened. But I am saying that those changes are happening in the context of a lot of capacity ... I'm not in any way dismissing the significance of the changes at the CSIRO," he said.
Andy Pitman, director of the ARC Centre of Excellence for Climate System Science at the University of NSW, told Guardian Australia on Tuesday there was no way a university could take on that responsibility.
"I mean I run a centre of excellence which is the best-funded university capability in the country and we do not remotely have the capability to be the custodians for the climate modelling systems," Pitman said. "We live and breathe on a three-year funding cycle with an 80% failure rate. You cannot run a national capability in that environment."
Last week chief executive of the CSIRO, Larry Marshall, told staff that 350 positions would be cut as the organisation moved away from researching climate change. Scientists around the world have since spoken out against the move.
On Monday, the World Climate Research Program, part of the World Meteorological Organisation, put out a statement criticising the cuts.
"We read that these cuts occur in the name of innovation," it said. "One can hardly imagine a worse and more backward step toward any of those laudable goals than ignoring climate and discarding climate research."
Paul Durack of the Lawrence Livermore National Laboratory in the US has been collecting signatures from international climate scientists for an open letter to the Australian government calling for the CSIRO capabilities threatened by the cuts to be saved. More than 2,100 signatures have been collected so far.
The CSIRO Staff Association has lodged a formal dispute with management over the job losses, claiming CSIRO management breached their enterprise agreement by failing to consult with staff over changes that could impact on their jobs.
A spokesman for the association said a meeting of members next week would consider industrial action.

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