(AU) Big Banks, Insurers Publish Road Map To Net Zero

AFR - James Fernyhough

Australia's entire financial sector, including the big four banks, major insurers, fund managers and superannuation funds, are calling for an institutionally embedded collective target of net zero greenhouse gas emissions by 2050.

The target, which if achieved would end Australia's contribution to global warming by the middle of the century, is one of the central goals of the Australian Sustainable Finance Initiative's completed road map, released on Monday.

ASFI was launched in early 2019 with the goal of designing a comprehensive blueprint to reshape the financial system to deal with climate change and other sustainability issues. On Monday it published that road map, describing it as a "plan for aligning Australia’s financial system with a sustainable, resilient and prosperous future for all Australians".

The road map includes 37 recommendations that seek to embed sustainability concerns in corporate, government and regulatory governance structures, build sustainable finance markets and support community resilience through more socially responsible lending practices.

The global economy is on the edge of the next industrial revolution to a more sustainable low carbon future.
— Geoff Summerhayes, APRA

Many of the recommendations deal explicitly with climate change, proposing a standardised use of the Taskforce on Climate-related Financial Disclosures for all ASX-listed businesses and any financial institution with turnover of more than $100 million, regular climate change scenario analysis and stress testing, portfolio holdings disclosure, and common, science-based emissions targets.

But while the road map calls for the creation of "a sustainable capital market", it stops short of recommending concrete market-based measures favoured in other countries, such as an emissions trading scheme or a carbon tax, reflecting the continued political stalemate on the subject of carbon pricing.

At The Australia Financial Review Energy and Climate Summit on Monday, Energy Minister Angus Taylor reiterated the federal government's opposition to carbon pricing

The road map also recommends that ASFI be made a permanent official body similar to the Council of Financial Regulators.

"ASFI would be governed by a board composed of representatives of financial institutions, with an advisory council composed of government, regulators, industry bodies and civil society representatives contributing perspectives and providing advice to the Board on workplan priorities," the road map states.

Beyond climate change

The road map goes beyond just climate change to areas such as biodiversity, community finance and indigenous affairs in an effort to build what ASFI co-chair Simon O'Connor called a "new normal". Alongside the Paris Agreement goals, it aims to help Australia meet its sustainable development goals and the Sendai Framework for Disaster Risk Reduction and Convention on Biological Diversity.

“Recent events, such as bushfires, floods and drought, as well as COVID-19, have highlighted how locally and globally connected our economy, society and environment are," Mr O’Connor said.

“The financial services sector recognises the critical role it needs to play for Australia to recover from the pandemic and to prepare for our future challenges. We need to mobilise now to enable a prosperous and thriving economy, which can only be delivered while investing in a sustainable and resilient society, and healthy environment."

Its 18-person steering committee includes representatives from Australia's most powerful financial institutions, including the Commonwealth Bank of Australia, Westpac, NAB, ANZ, insurers QBE and IAG, asset manager Pendal and industry super fund Cbus.

NAB's executive general manager of corporate finance Connie Sokaris, who is on the ASFI steering committee, said a key aim for NAB in participating in the initiative was to help customers transition their business models in line with a low carbon and sustainable model.

"I’ve been really pleased with the level of industry and private sector involvement, " says Connie Sokaris of NAB and a member of the ASFI steering committee.

"The transition will take time and planning," she said. "Some are really well progressed, others are just starting."

Ms Sokaris declined to comment on whether federal government needed to play a more active role in the initiative.

“I’ve been really pleased with the level of industry and private sector involvement. ASFI is about the industry and our customers taking the lead on this. I cannot comment on government policy, but we are seeing industry playing a leading role."

While no federal government representative sits on the steering committee, the Australian Prudential Regulation Authority's Geoff Summerhayes participates as an observer, as do two representatives of the Australian Securities and Investments Commission. The steering committee also includes former Liberal leader John Hewson.

“The global economy is on the edge of the next industrial revolution to a more sustainable low carbon future," Mr Summerhayes said. "ASFI recognises the immense risk and opportunity that this transition presents for the Australian financial system and the global economy.

“A number of the recommendations are directed at APRA and our regulatory peers. While there is a degree of alignment between the recommendations and APRA’s strategy, we are committed to carefully considering the ASFI report."

Links

• Recovery must be green, say big banks
• Big four banks form climate investment initiative
• Task Force on Climate-related Financial Disclosures
• Australia must act on energy reform or be left behind: AEMO
• Council of Financial Regulators
• Aware Super nearly halves emissions in mass divestment
• Top CEOs form exclusive climate change club
• Australia is a net zero embarrassment
• We can become a net exporter of clean energy, say experts

(AU) Australia Needs A Climate Policy Turnaround - Not A Pathetic Crab Walk

Sydney Morning Herald - Kevin Rudd

Author Kevin Rudd was the 26th Prime Minister of Australia, serving from December 2007 to June 2010 and again from June to September 2013.

Scott Morrison's attempt last week to crab walk away from his government's insistence on being able to use so-called "Kyoto credits" to achieve Australia's formal commitments under the Paris Agreement was inevitable.

Morrison's position was not only legally baseless and at odds with the rest of the world, it did nothing for the atmosphere.

His "crab walk" is also an early sign of the pressure that will be brought to bear by the Biden administration. But the government would be mistaken to think this soft shoe shuffle will be enough to change our status as an international climate pariah, especially when we are no longer able to hide behind there being a climate denier-in-chief in the White House.

Prime Minister Scott Morrison. Credit: Alex Ellinghausen

President-elect Biden has made clear his determination to put the fight against climate change at the centre of his domestic agenda and to rally the rest of the world to lift our collective climate ambition. Despite Morrison making low-emissions technology a priority for co-operation in his congratulatory message to Biden, Australia's seven years of climate inaction is well known in Washington.

Remember it began when Biden was Obama's vice-president. Sometimes the conservative political class in Canberra suffers from the delusion that their destructive record on climate has been quarantined to the Australian domestic debate. It hasn't. The truth is it is as much a global story as Trump's giant wrecking ball on climate – with our record of inaction powerfully brought into contrast with the "Great Australian Inferno" last summer which received worldwide coverage.

Similarly, both the Democrats and the wider international community are under no illusion that the Murdoch media has been the great global political enabler for both Morrison and Trump's destructive records of climate inaction. Watch this space as not just Australia but the world turns on Murdoch as the global repository of climate change denialism.

The reality is that Australia lacks both short-term ambition and long-term vision on climate action. In Biden's eyes, this will set us apart from other countries that also need to do more in the short term – including China and Japan – which at least now have clear pathways to decarbonise their economies by mid-century.

President-elect Biden has made clear his determination to put the fight against climate change at the centre of his domestic agenda. Credit: AP

That is why if the Kyoto credits were Morrison's first climate crab walk, it won't be his last. The next will be Morrison saying that the time has finally come to move towards carbon neutrality by 2050 – not least because Europe and possibly the US are threatening carbon tariffs against the countries that don't. But the risk here is that Scotty from Marketing’s objective is to simply throw something to the chattering classes while doing nothing of real substance in the critical decade ahead.

Morrison must do two things: honour the commitment Australia made in the 2015 Paris Agreement to increase our appallingly low national target to reduce greenhouse gases by 2030; and, second, to put in place the domestic policy changes to give effect to a new and genuinely ambitious national target.

Instead, despite attempts by Boris Johnson in recent weeks, there is a real risk that Morrison will seek to try to cut off any pressure from the incoming Biden administration by slipping under the rug a "reconfirmation" of Australia's existing lacklustre 2030 target before the end of the year. This would immediately attract global ridicule, not least because Australia's existing commitments are so anaemic.

Back in 2014, when Tony Abbott announced Australia's current target to reduce emissions by 26 to 28 per cent on 2005 levels by 2030, he explained it was chosen on the basis it mirrored the same target the Obama administration had put on the table. That was a lie. The Americans had promised to reach this goal five years earlier – a massive difference in terms of gigatons of carbon.

According to a report published last week by the Asia Society Policy Institute and Climate Analytics, Biden is likely to now commit the US to a new target of cutting emissions between 38 and 54 per cent by 2030. By the government's own measure, this will now be the benchmark for what Australia should do.

Thankfully, in the five years since Australia's current 2030 target was tabled, the cost of renewables has plummeted and low-emissions technologies have radically improved. That's precisely why the Paris Agreement put in place a mechanism for countries to increase their ambition every five years.

This brings us to the question of how Australian domestic policy actions must also give effect to our international targets.

The tragedy is that the vast bulk of Australia's greenhouse gas reductions over the past decade have been delivered by the actions our government put in place before we left office in 2013 – and despite the fact the conservatives recklessly repealed our price on carbon.

First, our introduction of a Mandatory Renewable Energy Target has driven renewables from 4 per cent of the national electricity supply in 2009 to roughly 21 per cent today.

Second, our national program to subsidise solar panels for Australian homes.

Third, and despite the real problems in implementation which have been well documented, our Energy Efficient Homes package which significantly reduced demand for domestic heating and cooling in one-fifth of our national housing stock – cutting the equivalent of almost 20 tonnes of carbon through to today.

So, in addition to committing to a substantive increase in our Paris commitment for 2030, the time has come for Morrison to enunciate a series of similar substantive national measures to get there.

These measures should include changing the national building codes to make solar panels mandatory for all new residential and non-residential construction.

Or is Morrison just too gutless to do what is right for Australia, forever fearful of Dutton and the far right of the Liberal and National parties breathing down his neck, for whom chanting the coal mantra will forever be their pathetic political anthem?

Links

• Kevin Rudd on the economic impacts of climate change
• Australia, Climate Change and the Complacent Country
• Labor's battle over climate change action
• Australia will lose more than $3 trillion and 880,000 jobs over 50 years if climate change is not addressed, Deloitte says
• ‘New jobs, new industries, new wealth’: Kevin Rudd’s vision for a green recovery out of the pandemic
• ‘Shocking legacy’: Turnbull blasts News Corp’s climate change coverage in fiery exchange
• Ex-PMs unite in Australia in bid to curb power of Murdoch empire
• Climate change—reducing Australia’s emissions
• Gillard on climate action: “It was done. And … we can do it again in the future”
• Survey shows Australian support for Paris Agreement and net zero target
• Revved-up Boris leaves old fossil Oz for dust

The Silly Debate About Climate Change

Forbes - Art Berman

Author Art Berman is a petroleum geologist with 42 years of oil and gas industry experience.

Arguments that dispute climate change are ignorant and contrary to geologic history.

To say that climate is always changing, that temperatures were higher during earlier periods of Earth history than today, that higher CO2 levels are good for agriculture, or that deviations from the warming trend invalidate its truth—these are wrong or hopelessly simplistic.

The debate about climate change is silly because it doesn’t matter what we think about it. The effect of the debate is to make one side or the other feel better or worse about what is happening. But climate change is happening whether we like it or not. 

Climate change has been a primary factor in the history and development of human civilization. It caused the earliest migrations out of Africa. It led to the transition from hunter-gather to agricultural society. The agricultural revolution had nothing to do with technology. It was a climate-change revolution. The agricultural revolution took place when climate stabilized and warmed 12,000 years ago at the beginning of the Holocene Epoch (Figure 1).

Figure 1. Holocene temperature variations from Greenland ice surface temperatures. Source: Dalum Hjallese Debate Club: https://www.dandebat.dk/eng-klima7.htm and Labyrinth Consulting Services, Inc. artberman.com

Temperatures were warmer, not colder, than today through most of geologic time—until recently. Heating is greater than it was millions of years ago. Long-term temperature has declined because CO2 has decreased—until recently.

CO2 levels were higher than pre-industrial values (278 parts per million) for most of the last 420 million years (Figure 2). In other words, the long-term decrease in CO2 largely compensated for the increase in solar output.

CO2 levels decreased because of the proliferation of land plants that converted it into oxygen. The erosion and weathering of clay minerals in granitic rocks absorbed large volumes of CO2 as the continents evolved. Long-term volcanic activity has declined as the earth has matured limiting the amount of CO2 released into the atmosphere from inside the earth.

We must focus on the deviation from these long-term trends over the last 200 years.

Figure 3 shows the same data as in Figure 2 but on a logarithmic time scale to compare more recent earth history with its more distant geologic past.

Among the various projections on the right-hand side of the figure, RCP8.5 represents the “do-nothing” or business-as-usual scenario. It indicates CO2 values by early in the next century that exceed levels from more than 99% of the last 420 million years. A return to unstable climate would make agriculture impossible again.

Figure 3. Temporal evolution of CO2 and Paleogene formation of ice caps. Source: Leonard and Berman (2019): https://www.artberman.com/wp-content/uploads/Climate-Change-Transitional-Role-of-Fossil-Fuels_Commodities_APR-2019-1.pdf; modified from Foster et al (2017) and Montanez (2018). artberman.com

Regardless of the reliability of this projection or the ultimate causes for the rise of post-industrial CO2 levels, the message is clear.

What lies ahead during the lifetimes of our grandchildren will most probably not be comparable to anything since the development of multi-cellular life on Earth.

Please visit artberman.com/2020/11/21/climate-change-the-great-and-silly-debate/ for a more detailed version of this story.

Links

• The Discovery of Global Warming

• Climate Change History

• A brief history of climate change

• History of climate change science - Wikipedia

• Historical Overview of Climate Change Science (pdf)

• Late Pleistocene climate drivers of early human migration

• Future climate forcing potentially without precedent in the last 420 million years

• Climate Change First Became News 30 Years Ago. Why Haven’t We Fixed It?

• How Understanding the History of the Earth's Climate Can Offer Hope Amid Crisis

• Scientists Have Uncovered a Disturbing Climate Change Precedent