Ex-coal chief tells Future Fund’s Costello: the coal boom is over

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Former head of Australian Coal Association says Australia will not prosper by propping up a dying yet dangerous coal industry and blocking real innovation.

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Ian Dunlop, the former chair of the Australian Coal Association and CEO of the Australian Institute of Company Directors, said reports that the Future Fund was considering financing of Adani’s controversial coal mining project in the Galilee Basin suggested its chairman Peter Costello has “lost the plot.”

Reports emerged this week that the Future Fund had been approached by the Indian company to provide finance, after more than a dozen international banks refused to lend money to the project. The reports suggested that Indian Foreign Minister Arun Jaitley is scheduled to meet Costello, the former Howard government treasurer, this Friday.

“It is extraordinary that faced with the structural decline of thermal coal and even a basic understanding of climate change, Peter Costello would entertain the possibility of funding Adani’s Galilee Basin coal mine,” Dunlop said in a statement.

“It seems remarkable, but perhaps the former Treasurer hasn’t noticed the coal boom has ended. One would hope that his fellow board members would have greater foresight.

“Informed leaders, scientists and economists around the world are now urging an emergency response to address accelerating global warming.

“Contrary to recent government and industry rhetoric, increasing coal consumption in India will create massive poverty, not alleviate it.  Building mega-coal mines in current circumstances is nothing less than a crime against humanity.

“Common sense and economics indicate the Future Fund should focus on the enormous opportunity of creating the 21st century low-carbon world, rather than perpetuating outdated 20th century high-carbon business models.”

“Future Fund Board members have a fiduciary responsibility to objectively assess and manage the risks and opportunities implicit in their investments.  Failure to honestly account for climate risk will expose Board members to personal liability, as is happening overseas.”

“Prosperity now depends upon avoiding the kind of short-termist “groupthink” that has so bedevilled Australia by propping up a dying yet dangerous coal industry and blocking real innovation.”

 

 

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8 Comments
  1. Chris Fraser 3 years ago

    Surely out of all politicians past and present, Peter Costello would have more talent than this current crop of contemporaries. It really is time to think hard about investment and the future of energy in general.

    • DevMac 3 years ago

      I read some fairly unflattering commentary about Peter Costello’s decisions as Treasurer, written by an economist. Along the lines of pissing away the profits of the mining boom under the assumption the boom would last much longer than it did. And the effects of such decision making will be felt for years to come.

      That’s not to say I agree or disagree, however it’s an interesting point. The government’s during the mining boom had it easy so their performance should only be viewed through the lens of “having plenty to work with at the time”.

      If it’s true that Peter Costello is considered funding the Adani mine, then I’d say that’d be directly in line with what the economist said of his competence.

      Primary source:
      https://www.themonthly.com.au/issue/2015/july/1435672800/richard-denniss/clowns-and-treasurers

      Other Sources:
      http://tai.org.au/content/peter-costellos-five-most-profligate-decisions-treasurer-cost-budget-56bn-year
      http://www.afr.com/it-pro/rock-star-economists-20120516-jyv5n
      https://independentaustralia.net/politics/politics-display/we-really-must-talk-about-the-howard-and-costello-economic-disaster,5686
      http://tai.org.au/content/subsidies-ate-boom

      • Peter Campbell 3 years ago

        Indeed. I don’t know why the ‘Libs are better economic managers’ meme keeps going. It is repeated as truism but where is the evidence?

        • DevMac 3 years ago

          The evidence is in the numbers for those who don’t scratch the surface. Sell things for a one-off lump sum that our taxes have paid for over many years whilst at the same time minimising spend on infrastructure. Short term gain, and … I forget the rest “Yay, short term gain. Champagne, cigars, and sports cars for everyone”.

          • solarguy 3 years ago

            Yep and when all the money is spent what do you think they will do then. Gouge the mid to low income slaves of course, as every Lib thinks we have an unlimited capacity to pay.

          • Coley 3 years ago

            Bugger, you could be describing our Tories to a T, seems the political elite all sing to the same song worldwide.

        • Chris Fraser 3 years ago

          True, I for one don’t buy the Libs as economic managers. Neither do I buy ‘The Labor experiment has failed’, or ‘The adults are back in charge’.Its almost like Libs think they are entitled to only leaving others in charge for a short time while they are out on their cigars, champagne and helicopters.

      • solarguy 3 years ago

        Well he’s no Paul Keating and thank Christ he wasn’t our treasurer when the GFC hit.

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