Australian taxpayers to fund Adani’s zombie coal project?

Intro

With over dozen financial institutions essentially ruling out funding Indian coal conglomerate Adani’s Carmichael mine in Queensland, Australian taxpayers are now being asked to open their wallets for the project. Indian Finance Minister Arun Jaitley is in the country this week, seeking a handout from Australia’s Future Fund for the economically disastrous project, which has been described as financially unviable, as well as an environmental and climate disaster. While the project appears to be walking dead, if Australia’s sovereign wealth fund ignores the neon warning signs – such as ANZ’s almost billion-dollar writedown of coal loans, the halt of coal plant construction in China, Peabody Energy’s imminent demise, and a new report out today showing that coal plants are increasingly sitting idle around the world on the back of drastic consumption declines – then the Future Fund will be risking red on its balance sheet on the scale of the white currently bleaching the Great Barrier Reef.

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Key Points

  • Australians are not only being asked to sign a death warrant for the Great Barrier Reef with Adani’s new coal mine, they are now being asked to pay for it too. Every bank within cooee is backing away from coal, so Adani is looking to Future Fund chairman and former Howard Government Treasurer Peter Costello to put taxpayer money where his mouth is. Costello has already been called out on willful blindness and a breach of fiduciary duty for his continued support for fossil fuel investments, but even considering investing taxpayer money in Adani’s zombie project – as ANZ issues almost a billion dollar writedown for coal loans – would be the definition of “ludicrous”, as former Liberal Leader John Hewson put it in late 2015.
  • This is the face of the Coalition government’s climate policy. If it can schizophrenically push coal expansion while pretending to act on climate change, say coal is “good for humanity” while the new coal plants in the pipeline alone will result in an estimated 130,000 more premature deaths per year, then it isn’t hard to believe that it will allow taxpayer money to be hastily gambled on a coal project that both directly and indirectly threatens Australia’s multi-billion dollar Great Barrier Reef tourism industry on its watch.
  • New coal is good for no one. The economic case for Adani’s Carmichael mine is dire, but it does not stack up in any other way either. The coal industry is deepening the world’s water crisis and hurting the vulnerable, but in turn the water crisis in India has left coal struggling too, with coal plants forced to sit idle due to lack of water. Not only is the coal industry putting greater pressure on water flows badly needed for people and food and risking the health of millions globally, the almost US$1 trillion that could be spent on the current expansion of coal plants is 2.5 times the amount needed to end energy poverty for 1.2 billion people.

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Key Quotes

  • “Over a dozen banks worldwide have either backed away from the environmentally disastrous Carmichael mega coal mine, ruled out funding for it, or dismissed it as financially unviable. The arrogance of Adani treating Australia’s sovereign wealth fund as a backstop to finance their otherwise unbankable coal mine is staggering. It’s simple,” said Vincent. “Australia’s sovereign wealth fund is supposed to be about investing in Australia’s future. Coal has already been consigned to the past.” – Market Forces Executive Director Julien Vincent
  • “In the real world Climate Change is now an economic and financial issue. The bastions and leaders of global finance are now banging the drum to take urgent and early action and all Costello does is to wax lyrical about Australia’s fossil fuel future – that isn’t called swimming against the tide that’s playing Ostrich. Australia’s future fund must be governed by guardians who can see and help make the future which will inevitably be one built around clean energy and renewables – there are millions of people working on this transition already and a few vested interests such as Costello allowing their ideology to cloud their judgement.” – Former Liberal leader John Hewson in 2015
  • “Coal use keeps falling off a cliff and plants are sitting idle, yet more money is being wasted on misguided attempts at locking in this dirty, dangerous fuel. The hundreds of billions being thrown at coal could instead go toward the booming clean energy sector, helping more than a billion people get access to the clean, reliable electricity that fossil fuels have failed to deliver.” – Senior campaigner for the Sierra Club’s International Climate and Energy campaign, Nicole Ghio
  • “[While] hundreds of billions [are] being squandered on unneeded coal plants, there’s more at stake here than money. In terms of climate safety, the clock is ticking on the transition to clean energy. There is no time to waste.” – Director of CoalSwarm, Ted Nace
  • “As coal-fired power plants are rapidly becoming uncompetitive, and concerns about their massive health impacts grow, the coal industry is making a last-ditch push. China alone is housing the largest power market investment bubble the world has ever seen. Even after announcing suspension of new permits in 13 provinces, the country could still bring over 500 new coal-fired power plant units online while power generation from coal is falling precipitously on clean energy growth and slower power demand.” Senior global campaigner on Coal and Air Pollution at Greenpeace, Lauri Myllyvirta

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