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Australian government backing coal and gas projects as businesses opt out

Updated: Sep 10, 2020

Australian government policy on how to rebuild the economy from the Covid-19 pandemic is encountering opposition as an ideological battle develops over climate change. The Coalition government led by Scott Morrison set up the National Covid-19 Coordination Commission (it has since been re-named the National Covid-19 Commission (NCC)) in March with the brief of advising on all non-health aspects of the pandemic response.

The choice of Neville Power as head of the NCC was questioned by many, particularly environmentalists, due to Power’s career-long involvement in mining – he was CEO of mining giant, Fortescue, until 2018 – and his current position on the board of a gas company.

Equally divisive was the appointment of Andrew Liveris as a special adviser to the NCC. Liveris sits on the board of the Saudi state-controlled oil company Saudi Aramco, is former CEO of Dow Chemical and in 2017 was named by Donald Trump to lead his short-lived advisory group, the American Manufacturing Council.

In May, a draft report by the NCC’s manufacturing taskforce headed by Liveris was leaked. The draft report recommended that the Australian government should introduce legislation to “create the market for gas” and build a long-term infrastructure for fossil fuels. There was no mention of climate change or Australia’s carbon emissions reduction targets.

The government has refused to make the final version of the report public but in August, Neville Power confirmed the NCC had asked the government to underwrite new investment in gas pipelines. When the Energy Minister, Angus Taylor, was asked about the NCC’s recommendations, he replied that he anticipated a “gas-fired recovery” from Covid-19.

The NCC has been accused of a “lack of transparency” by the environmental group, 350 Australia, and the Green party said that the advisory group was “entirely captive to the interests of the fossil fuel lobby”.

Australian businesses are beginning to take a different approach to the government. On August 21st, Suncorp became the first major insurance company to announce they have “ceased underwriting, financing or directly investing in new oil and gas projects”. They also committed to phase out all underwriting and financing of the oil and gas industry by 2025 and end direct investments completely by 2040.

The controversial Adani coalmine in Queensland is also encountering problems. The mine will be Australia’s largest and is projected to start producing thermal coal from 2021for export to India and South-East Asia. However, it has been plagued by the withdrawal of insurers, consultants and financiers from the project.

In May, the banking group Westpac pledged to quit supporting organisations involved in thermal coal mining by 2030 bringing them into line with most major Australian banks.

The massive bushfires throughout last December and January left many Australians dismayed by their government’s continued support of the mining industry. Prime Minister Morrison initially refused to draw a link between the fires and climate change but softened his stance as the fires raged. If the bush fires are repeated over the coming months, the government may find itself entirely at odds with green groups globally as well as domestically.


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