It took a major international investment group with $279bn under its control to break through the climate-laden rhetoric of geopolitics last week.
You may not have heard of Robeco Institutional Asset Management, but on Thursday the Netherlands-based asset manager made a stunning declaration, singling out Australia as a country with a âparticularly high-risk profileâ that it wants to pressure to transition out of fossil fuels.
The warning that it would look to restrict investments in the countryâs government bonds came after a week that started in the village of Carbis Bay in Cornwall and careered through an oil and gas conference in Perth.
Robecoâs position shows itâs unconvinced by the Morrison governmentâs claim its technology-led approach to cutting greenhouse gas emissions stands credibly on the international stage.Donors pull support after University of Newcastle appoints coalmining executive Mark Vaile chancellor Read more
The prime minister, Scott Morrison, had taken his technology-focused, Australia-first talking points to Cornwallâs Carbis Bay for the G7 summit.
Robecoâs bruising intervention suggests the governmentâs carefully crafted climate messaging is now being usurped by reality.
âIt canât have been easy for the prime minister to be at a meeting like that, with [US president] Joe Biden and [German chancellor] Angela Merkel, and then taking a position to put a foot on the brake,â says Prof Frank Jotzo, an expert in climate economics at the Australian National University.
âIn the context of the type of actions these countries are taking, talking about the development of future technologies really doesnât cut it.â
Morrison did return to Australia with some endorsements, signing agreements with Germany and Japan on developing lower emissions technologies.
But he also returned without any update to Australiaâs 2030 emissions target that remains stuck in its 2015 position to cut emissions by 26% to 28% below 2005 levels. He also did not commit Australia to a date to reach net zero greenhouse gas emissions.
Over in Perth, the countryâs oil and gas sector kicked off its annual conference with a video message from Morrison, who told the gathered executives their fossil fuel industry âwill always beâ a major contributor to Australiaâs prosperity.
Not surprising, given the Morrison government has gone full-bore on identifying gas, rather than renewables, as the key feedstock for Australiaâs economic recovery from the Covid-19 pandemic.
By Thursdayâs close â and after the resources minister, Keith Pitt, and Laborâs spokeswoman, Madeleine King, had both injected heavy praise on the industry â the chief executive of the Australian Petroleum Production and Exploration Association, Andrew McConville, was bullish.
He said the industry saw a clear future in a lower emissions world. It could help the world to a lower emissions future, he said, and provide the feedstock for an expected hydrogen boom.Australia Weekend sign up
But, like Pitt and King, he took a swing at climate âactivistsâ who, he said, âwill say and do anything to get their wayâ.
âWe are the innovators and the doers, while our opponents are the naysayers,â he said.
But what is inescapable here (aside from how those activists now include other governments, major banks and major investors), is that gas extraction and LNG production has been identified by the federal energy department as a major new contributor to Australiaâs greenhouse gas emissions.
A âgas-led recoveryâ is likely to further exacerbate Australiaâs problem of rising or plateauing emissions in the transport, heavy industry and agriculture sector at a time when they need to be falling steeply.
All this comes before fossil fuel gas is burned, accumulating more and more greenhouse gas molecules in the atmosphere that will remain there for decades, heating the planet, acidifying the ocean and driving the climate crisis.Scott Morrison at the table with other world leaders at the G7 summit in Cornwall. Photograph: Reuters
Appea says its use of gas is helping to cut emissions, claiming it has the potential to cut 170Mt a year in Asia.
The energy minister, Angus Taylor, has been criticised for making a similar claim â that LNG is replacing coal in power plants and is âsavingâ emissions to the tune of 148Mt a year.
The International Energy Agencyâs data does not back this up, and says replacing coal with less dirty gas in the power sector only saved 58Mt in 2020, compared to 440Mt for renewables. The agencyâs most recent report detailed a path to reaching net zero, with its scenario being clear that to get there (which Morrison says he wants to do as soon as possible) there can be no more new fossil fuel production.
When you add the pressure from the worldâs capital investors on both companies and governments, and then multiply that by the geopolitical pressure that could end with countries placing trade tariffs on goods from intransigent economies, Australia is starting to look a little surrounded.
Yet the political backing for fossil fuel gas â from both sides of Australian politics â continues.
Prof Chris Wright, of the University of Sydney, is an expert in climate and energy politics. In a study last month, Wright and colleagues looked at how the fossil fuel industry had managed to maintain its grip on political discourse over the past decade.
âIn some ways the politicians take a more extreme position [than industry groups]. The industry associations are the mouthpieces of the corporations and gives them some deniability.
âBut the politicians on the conservative side have become even more extreme. Itâs like they operate as an extreme flank in the public debate.â
Wrightâs analysis finds fossil fuel groups have moved away from attacking the science and, instead, deploy one of four arguments. They back the science and the need to act, but paint themselves as being part of Australiaâs prosperity, and as pragmatists that can be part of the solution in a measured response to the climate crisis.
âItâs gone from denial to delay,â Wright says.Liberal-led committee says Angus Taylorâs planned change to renewable energy agency could be illegal Read more
Part of the fossil fuel industryâs success at capturing political discourse, Wright says, is down to the revolving lobby door that sees personnel moving between high political offices and the industry.
Even before the G7 dust had settled onto the Cornwall cobbles, the Morrison government was releasing more offshore areas for oil and gas â some 80,000sq km, including a swathe of ocean just 5km from the picture-perfect tourism mecca of the Twelve Apostles on Victoriaâs Great Ocean Road.
In submissions to the government before it released the new acreage, other stakeholders â including the governmentâs own environment department â lined up to either oppose it on climate grounds, or note the risks to wildlife and fish stocks.
The conservation division of the governmentâs own environment department pointed out some areas being released overlapped with areas vital for whales and turtles.
Last month the International Energy Australiaâs landmark report set out how the world could still reach net zero emissions by 2050 â a mark that would give the planet a fighting chance of keeping global heating below 1.5C.
Jotzo says it was notable, coming from the usually conservative global energy advisory group, but it was just a scenario âand not a projectionâ.
But the fact Morrison chose to keep talking up the fossil fuel industry in its wake, and as he sat with international leaders bearing more ambitious 2030 plans, âshows how deep the politics must be running [in Australia]â.
The global shift away from fossil fuels is inevitable, he says, and there now appears to be a race on to âsqueeze the most out of fossil fuel reserves before the curtain fallsâ.
âContinued investment in new fossil fuel supply infrastructure at this point means betting on the world not reaching the Paris agreement goal. It is that clear.â