14/08/2020

(AU) Investors Are Trying To Shut Down Fossil Fuel Companies From The Inside — This Is What They're Doing

ABC News - Michael Slezak

Market Forces argues coal operations will become "worthless assets". (REUTERS/Daniel Munoz)

More than 100 investors in Whitehaven Coal have filed a resolution asking the company to plan its own closure — the first in an ambitious play by an activist shareholder group to push fossil fuel companies to act on climate change.

The resolution, organised by the activist shareholder group Market Forces, comes ahead of this year's company annual reporting season.

The group — which is aligned with conservation organisation Friends of the Earth — plans to file similar resolutions with three other Australian companies: New Hope Group, Beach Energy and Cooper Energy.

New Hope is predominantly a coal miner, while Beach Energy and Cooper Energy are both focused on oil and gas.

In a move analysts say may move other investors to question the long term viability of pure-play fossil fuel companies, Market Forces's latest resolution argues any investment in the company's coal operations will become worthless "stranded assets" as the world shifts away from coal.

It calls for a plan to return all remaining capital in the company to investors.

Whitehaven's operations have been long been the target of protestors. (AAP)

"Whitehaven's current plans threaten to waste investor capital on projects that are incompatible with a Paris-aligned energy transition, and unrealistic in light of market shifts already underway," the official documents lodged with Whitehaven said.

Market Forces executive director Julien Vincent said the group was pushing the resolution to make the company "sensibly manage" its decline as it "inevitably goes out of business".

"[That way] capital gets returned to investors instead of wasted, and workers can be retrained, re-skilled and supported to find new employment instead of suffering the shock of an economy racing to keep a lid on global warming," he said.

A Whitehaven Coal spokesperson said based on its analysis the likelihood of any of its assets becoming stranded was "low".

It said aspects of the pace and scale of the global transition towards a lower-carbon world were subject to "considerable uncertainty".
"High-quality coal can contribute to meaningful carbon reductions today, and we will continue to meet the strong and growing demand for higher quality coal that exists in nearby export markets."
Coal a bad investment?

Before COVID-19, thermal coal was a hot commodity.

It was fetching a high price and Australia's exports were rising.

Since the pandemic, export volumes have remained steady, but the price has plummeted, forcing some mines to reduce output, and put expansion plans on ice.

The Department of Industry's latest figures project the price will stay depressed for the next few years, and export volumes are likely to dip.

Some analysts have said coal needs to be phased out globally by 2040 to stop warming at 1.5C.

As a result, Market Forces argues Whitehaven Coal will produce 500 million tonnes of coal between 2030 and 2050 that can't be sold.

The ABC approached several super funds still invested in Whitehaven, but all declined an interview.It was fetching a high price and Australia's exports were rising.
Australian bosses have started
caring about climate change


Is solar thermal power the way forward?

First State Super, Australia's third largest super fund, announced this year it would dump investments in companies that derived more than 10 per cent of their revenue from thermal coal.

Following that announcement, the super fund divested from Whitehaven Coal, and therefore won't be voting on this resolution if it's presented to the next Annual General Meeting.

"So I guess... the resolution would be aligned to our thinking, i.e., we want you to close down because we actually think it's a stranded asset," First State Super head of responsible investments Liza McDonald.

Support growing at company AGMs

Shareholder resolutions on climate change started in Australia about 2011, with a resolution against Perth-based oil and gas company Woodside.

It got less than 6 per cent support.

But since then, the number of resolutions filed each year, and the support those resolutions have got, has grown.

At least 15 shareholder resolutions on climate change were voted on at AGMs in 2019.

And so far in 2020, four resolutions have received more than 40 per cent support.

One against Woodside this year asked it to align its strategy with the aims of the Paris Agreement received more than 50 per cent.

It was a first for any shareholder resolution on climate change in Australia.

Support for climate-related shareholder resolutions
Chart: Michael Slezak

Mr Vincent said the difference between Market Forces's latest moves and previous resolutions was the degree of tolerance for a company "pretending that it can just go on with business as usual".

He said there was no "particular number" of votes they aimed to achieve and it would not be binding on the company — even if it had majority support.

"We've seen previously resolutions that have only resulted in 10 or 15 per cent of the vote result in the company actually going about the changes called for in the first place," Mr Vincent said.

'Not a stunt'

Martijn Wilder is a leading climate law expert, and now heads Pollination, a specialist climate advisory and investment firm.

He advises investors on how to vote on these resolutions, as well as some companies targeted by them.
"The resolution itself may not get up, but it will definitely be the focus of a dialogue about what is the future for a company like this," he said.
"This is not a stunt at all.

"This is a serious shareholder resolution about the core value of the company and its long-term viability in a marketplace where investors are moving away from fossil fuels and from coal," Mr Wilder said.

He said how much support the resolution gets is not the most important question.

"It is drawing attention to the issue, which many of the investors themselves are entirely focused on at the moment," Mr Wilder said.

A radical new push

Other activist groups are also mulling more ambitious demands in the next phase of shareholder resolutions.

The Australian Centre for Corporate Responsibility organised most of the recent similar resolutions in Australia.

"The first resolutions we filed were really around disclosure and I guess they're what you'd call the most supportable because you're just asking the company to provide more information," Australian Centre for Corporate Responsibility representative Dan Gocher said.

The next phase, he said, was asking the companies to take some action — which has already begun. After that, they would look to hold directors accountable.

"Companies like Santos and Woodside — we would expect some shift from them in the next six to 12 months and if that doesn't happen we'll start to look at the board," he said.

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Last Decade Was Earth's Hottest On Record As Climate Crisis Accelerates

The Guardian - 
• 2019 was second or third hottest year ever recorded
• Average global temperature up 0.39C in 10 years
Mountains nearly devoid of snow stand behind a road and a polar bear warning sign during a summer heatwave on Svalbard archipelago in July near Longyearbyen, Norway. Photograph: Sean Gallup/Getty Images

The past decade was the hottest ever recorded globally, with 2019 either the second or third warmest year on record, as the climate crisis accelerated temperatures upwards worldwide, scientists have confirmed.

Every decade since 1980 has been warmer than the preceding decade, with the period between 2010 and 2019 the hottest yet since worldwide temperature records began in the 19th century. The increase in average global temperature is rapidly gathering pace, with the last decade up to 0.39C warmer than the long-term average, compared with a 0.07C average increase per decade stretching back to 1880.

The past six years, 2014 to 2019, have been the warmest since global records began, a period that has included enormous heatwaves in the US, Europe and India, freakishly hot temperatures in the Arctic, and deadly wildfires from Australia to California to Greece.

Last year was either the second hottest year ever recorded, according to Nasa and the National Oceanic and Atmospheric Administration, or the third hottest year, as recorded by the UK Met Office. Overall, the world has heated up by about 1C on average since the pre-industrial era.

“As this latest assessment comprehensively confirms, we have just witnessed the warmest decade on record,” said Michael Mann, a climate scientist at Penn State University. “As other recent reports confirm, we must act dramatically over this next decade, bringing emissions down by a factor of two, if we are to limit warming below catastrophic levels of 1.5C that will commit us to ever-more dangerous climate change impacts.

“This is something every American should think about as they vote in the upcoming presidential election.”

The report, compiled by 520 scientists from more than 60 countries and published in the Bulletin of the American Meteorological Society, outlines the myriad ways that rising temperatures are altering the planet and human life, including:

  • Sea-surface temperatures were the second warmest on record last year, surpassed only by 2016. The heating up of the ocean and melting of glaciers caused global sea levels to hit a new high point of 3.4 inches above what they were, on average, 30 years ago.

  • Greenhouse gas levels hit their highest level ever recorded in 2019. Concentrations of these planet-warming gases, including carbon dioxide, methane and nitrous oxide, are now higher than any period measured by modern instruments or ice cores dating back 800,000 years.

  • The polar regions of the Arctic and Antarctic experienced their second hottest year on record. The loss of ice from the poles is helping push sea levels upwards, imperiling coastal cities around the world.

  • The consequences of the climate crisis are being felt around the world, including recent widespread flooding across east Africa and wildfires in Australia, the Amazon and Siberia.

Robert Dunn, a climate scientist at the UK Met Office, said that the start of this millennium has been warmer than any comparable period since the industrial revolution.

“A number of extreme events, such as wildfires, heatwaves and droughts, have at least part of their root linked to the rise in global temperature,” he said “The view for 2019 is that climate indicators and observations show that the global climate is continuing to change rapidly.”

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False Alarm By Bjorn Lomborg; Apocalypse Never By Michael Shellenberger – Review

The Guardian - 

Two prominent ‘lukewarmers’ take climate science denial to another level, offering tepid manifestos at best

Amazon Employees for Climate Justice lead a walk-out at the company’s HQ in Seattle. Photograph: Jason Redmond/AFP via Getty 

Bob Ward is policy and communications director at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics
It is no longer credible to deny that the average temperature around the world is rising and that other phenomena, such as extreme weather events, are also shifting. People can now see with their own eyes that the climate is changing around them.

Nor is it tenable to deny that the Earth’s warming is driven by increasing levels of carbon dioxide and other greenhouse gases in the atmosphere, resulting from human activities, such as the production and burning of fossil fuels and deforestation. Such denial is only now promoted by cranks and conspiracy theorists who also think, for instance, that the Covid-19 pandemic is linked to the development of the 5G network.

So instead, a different form of climate change denial is emerging from the polemical columns of rightwing newspapers. They paint a Panglossian picture of manmade climate crisis that will never be catastrophic as long as the world grows rich by using fossil fuels. The “lukewarmers” are on the march and coming to a bookshop near you.

Two prominent lukewarmers are now launching new manifestos: False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor and Fails to Fix the Planet by Bjorn Lomborg, and Apocalypse Never: Why Environmental Alarmism Hurts Us All by Michael Shellenberger.

Although they are aimed primarily at American audiences, they will appeal to anyone who, like the authors, proclaims themselves to be an environmentalist, but despises environmental campaigners.

Both books contain many pages of endnotes and references to academic publications, conveying the initial impression that their arguments are supported by reason and evidence. But the well-informed reader will recognise that they rely on sources that are outdated, cherry-picked or just wrong.
Shellenberger claims that windfarms might be responsible for an alarming decline in insect populations in Germany
The content of False Alarm will be familiar to those who have read Lomborg’s previous books, The Skeptical Environmentalist and Cool It. New findings and evidence are twisted and forced into the same haranguing narrative for his new contribution. Shellenberger’s book is far easier to read, at least near the beginning, but gradually descends into a bitter rant against environmentalists, the media and politicians who do not share his fervour for nuclear power.

Not everything that Lomborg and Shellenberger write is wrong. They are both correct in saying that the world should be investing far more in making populations, particularly in poor countries, more resilient to our changing climate. Even if the world is successful in its implementation of the Paris Agreement and limits global warming to well below 2C by the end of the century, the impacts will continue to grow over the coming decades, threatening lives and livelihoods across the globe.

But their argument that adaptation to climate crisis impacts is easier and cheaper than emissions cuts is undermined by their admission that the economic costs of extreme weather are rising because ever-more-vulnerable businesses and homes are being built in high-risk areas.

Lomborg is also right that the world should be spending far more on green innovation to develop technologies to help us to tackle climate breakdown. But he is pinning all his hopes on the breakthrough discovery of a magical new energy source that will be both zero-carbon and cheaper than fossil fuels.

This is wrong-headed for at least two reasons. The first is that most innovation occurs through the incremental improvement of existing technologies and we will probably need several different sources of affordable and clean energy. The second is that climate crisis results from the accumulation of greenhouse gases in the atmosphere that is already happening, so we cannot afford to delay the deployment of today’s alternatives to fossil fuels.

I also have some sympathy for Shellenberger’s argument that nuclear power has a role to play in creating a zero-carbon energy system. However, instead of calmly explaining its advantages over fossil fuels, he attempts to promote it by trash-talking about new renewable technologies, particularly wind and solar.

Walney Extension, the world’s largest offshore windfarm, on the Cumbrian coast. Photograph: Phil Noble/Reuters Photograph: Phil Noble/Reuters

He is right that we cannot yet store energy affordably on the scale needed to power an entire electricity grid with intermittent renewables. But he also claims that windfarms might be responsible for an alarming decline in insect populations in Germany, which entomologists have blamed on agricultural practices. And he complains that the turbines “are almost invariably loud and disturb the peace and quiet”, although he stops short of repeating Donald Trump’s ridiculous falsehood that the noise causes cancer.

Both Lomborg and Shellenberger also make some legitimate criticisms of “alarmism” by environmentalists. One of the most difficult problems in making the case for action on climate crisis is that the elevated levels of greenhouse gases we create over the next few decades will have consequences not fully realised until the next century and beyond. Some campaigners deal with this communications challenge by wrongly warning of imminent catastrophe.

However, many scientists do suspect that we are approaching, or have already passed, thresholds beyond which very severe consequences, such as destabilisation of the land-based polar ice caps and associated sea level rise of several metres, become unstoppable, irreversible or accelerate. Lomborg and Shellenberger both downplay these huge risks because they fatally undermine the fundamental basis for their lukewarmer ideology.

Lomborg’s book relies heavily on the creative use of the Dynamic Integrated model of Climate and the Economy (Dice). William Nordhaus, who won the Nobel prize for economics in 2018 for his pioneering work on climate change, created the Dice model, but it has been strongly criticised for omitting the biggest risks.

A graph in Lomborg’s book shows that he has used Dice to predict that 4.1C of global warming by the end of the century would only reduce global economic output, or GDP, by about 4%. He also finds that even more extreme warming of 7C would lead to a loss of GDP of just 15%. These are hard to reconcile with the scientific evidence that such temperature changes would utterly transform the world.
We cannot afford to delay the deployment of today’s alternatives to fossil fuels
Lomborg also exaggerates the costs of action by automatically doubling researchers’ estimates for reducing emissions. He justifies this by referring to an obscure study in 2009 that concluded it may prove twice as costly as the European commission expected for the member states to cut their collective emissions by 20% by 2020. But the European Union reached its target ahead of schedule in 2018, with the price of emissions permits over the previous decade usually at less than half of the level anticipated by the commission.

Nevertheless, Lomborg doubles Nordhaus’s estimates of the costs of global action and concludes that the “optimal” level of global warming, balancing both damages and emissions cuts, would be 3.75C by 2100.

This calculation made me laugh out loud because modern humans have no evolutionary experience of the climate that would be created by such a temperature rise. The last time the Earth was more than 2C warmer than pre-industrial times was during the Pliocene epoch, three million years ago, when the polar ice caps were much smaller and global sea level was 10 to 20 metres higher than today. Only lukewarmers would claim that modern humans are best suited to a prehistoric climate!

In short, these new books truly deserve their place on the bookshelf among other classic examples of political propaganda.

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