The chief executive of the Minerals Council of Australia, Brendan Pearson, has come out swinging in the media recently criticising moves by the investment and superannuation industry to divest from fossil fuels and questioning its ethics.
Is it any wonder? When the very existence of the industry that you represent is ethically questionable, it appears the only form of defence is attack.
It is noteworthy that Pearson’s comments fail to make any mention of global warming and the devastating impact coal has on the future of our planet. This is not a subjective ethical argument. It is as close to scientific fact as you can get with 97 per cent consensus.
Additionally, a survey released this week from environmental group 350.org showed that 67 per cent of consumers would change superannuation funds based on their exposure to fossil fuels.
When funds are bold enough to make the decision to shelter their clients from the risks of climate change and cease supporting its continued degradation of the planet, they should be applauded. Even if, as an ethical fund manager, we wish the rest of the market would go much further and faster.
To support his pro-coal arguments Pearson has made two easily challengeable claims.
Firstly he has questioned the ethical consistency of investing in wind turbines when they are made using coal-fired power as inputs. There is no inconsistency. Using an old, fading technology to manufacture the next generation's infrastructure is ethically acceptable as a justifiable part of transitioning to a new clean economy. Imagine what our future would look like if this was all that coal was used for.
The second argument he has used is to refer to the International Energy Agency’s recent report as supporting coal. This is hugely misleading. That report was not supporting the future growth of coal. Quite the opposite. It was lamenting the continued growth of coal and warning about the risks that this growth will bring to hitting the 2-degree target. Citing the fact that there is a belief that something will happen is not the same as saying whether or not it should happen nor whether it will be a good investment for that matter.
But rather than be satisfied to question the basis on which funds are increasingly dumping coal, Pearson has been attempting to build a dubious ethical case for its continued existence.
The continued burning of coal, goes his argument, will help lift millions of impoverished people in the world out of energy and economic poverty. How obscene. It’s not enough that we have learned from our own mistakes but we wish to inflict those mistakes onto others. Not to mention that the people that will be most impacted by global warming will be the very people that we are supposedly helping. The logic of this is perverse. May they be saved from our “charity”.
There are many solutions that are available to the developing world to give access to basic heating and lighting needs through the use of affordable and accessible solar and other renewable solutions. Organisations such as Pollinate Energy work at a grass roots level to encourage local entrepreneurs to build businesses selling solar products to the urban poor. The program is aimed at “leapfrogging” fossil fuels and moving straight onto a distributed, clean energy future. The newly elected Prime Minister of India has proclaimed renewable energy critical to lifting 400 million of its people out of energy poverty. Here is an emerging economy’s own leader proclaiming a fossil fuel free future and we, in all our greed, want to inflict our poison on them.
Soon after Pearson made his comments, the United States announced emissions control plans and South Korea announced a tax on coal imports, along with caps on emissions making our domestic policy position increasingly backward looking. Domestically, the Lowy Institute released its annual survey showing that 45 per cent of people were seriously concerned about climate change and 63 per cent wanted the Abbott Government to take a leadership position on climate change, a result that has increased steadily over the past two years.
The tide is rising against Pearson’s industry and the government policy that appears aimed at keeping it on life support. Enlightened superfunds can see this. What a great outcome for their members.
Phil Vernon is managing director of Australian Ethical Investments a superannuation and investment manager that invests according to strict ethical criteria. They have never invested in coal.