Describes the rationale for divesting from fossil fuels within the context of climate change. Describes the campaign of 350.org Canberra to persuade the government of the Australian Capital Territory to divest.

1. DIVESTMENT OF FOSSIL
FUELS: THE FOSSIL FREE
ACT CAMPAIGN OF 350.ORG
Warwick Cathro
Presentation to Sustainable Population Australia
Annual General Meeting
10 May 2014

2. Outline
• [1] Climate change: the science,
the evidence and the policies
• [2] Fossil fuels, the carbon
budget and the financial risks
• [3] The divestment movement
and the role of 350.org
• [4] The ACT Fossil Free
campaign

3. [1] Climate change:
• The science
• The evidence
• The policies

4. My starting point

5. Climate
science

6. Hansen’s latest article:
Public Library of Science. PLoS ONE 8(12), 3 December 2013.
www.plosone.org

7. The evidence [1]
• Global average surface temperatures: of the 10
warmest years on record, 9 of them have
occurred since 2002 (source: NOAA National
Climatic Data Center)
• Australia’s record breaking “angr y summer” of
2012/13 (source: Climate Commission)
• Arctic sea ice: the September minima have
been declining at 13% per decade since the
1970s, and the lowest was in 2012 (source:
National Snow and Ice Data Center, University of
Colorado)
• … with an upsurge in northeast and
northwest passage shipping since 2009

8. The evidence [2]
• Glaciers: of 136 major glaciers, 90% are
retreating, and their mass loss is accelerating
(source: World Glacier Monitoring Service)
• Hydro-meteorological disasters: up from 100
per year in 1980 to 300 per year since 2000
(source: Centre for Research on Epidemiology of
Disasters)
• Example: bushfires in eastern Australia in 2013
that were unprecedented for October
• These have happened with average global
warming of 0.8oC in the past century. What
will it be like when warming exceeds 2oC?

9. The sceptics
• “Man made climate change is a left wing
conspiracy to de-industrialise the Western world”
(Senator Nick Minchin, November 2009)
• “Peer reviewed sciences are the Kool-Aid of the
left-wing liberal conspiracy” – parents speaking to
Cheryl Manning, high school science teacher in
Evergreen, Colorado (PBS Newshour, 2 May 2012)
• “No evidence that man made emissions are adding
to the temperature on earth … no increase in
temperature for the past 17.5 years” (Maurice
Newman, head of Business Advisory Council, 22 April
2014)
• … and this bumper sticker, seen in Farrer, ACT:

10. Bumper sticker seen in Farrer:

11. The policy response failure
• Failure of the 2009 Copenhagen conference
• Lack of a national carbon price in the US
• Inadequate carbon price in Europe
• China’s regional carbon markets in their infancy
• Breakdown of the policy consensus (2007-2009) in
Australia
• “There’s now really no point in looking to government if
you’re concerned about climate change. You have to look
elsewhere for hope” – Mike Seccombe, The end of coal, The
Saturday Paper, 26 April – 2 May, 2014

12. Those advocating a carbon price
include …

13. Some positive developments …
• Falling price of solar PV, now challenging the price of
fossil fuel derived electricity
• Rapid uptake of solar in many countries (especially
China, Japan, US, UK, Germany)
• Strong development of solar and wind energy in the
ACT and South Australia (though wind energy is
threatened by the RET review)
• Innovations in battery storage will create future
prospects for solar PV households to go “off grid”
• Australia’s carbon emissions from the electricity
sector have fallen by about 12% from their peak in
2008

14. [2] Fossil fuels
• The carbon
budget
• The financial
risks

15. The world’s carbon budget
• If we want to limit warming to below 2oC, we must limit
all future CO
2
emissions to around 500 gigatons – and we
are emitting 30 gigatons per year
• Known world fossil fuel reserves exceed the equivalent
of 2500 gigatons of emitted CO
2
• These reserves are “above ground” economically - ie
factored into the assets of fossil fuel companies
• They are worth over A$25 trillion – a potential “carbon
bubble”
• They are potential “stranded assets”, facing
unanticipated writedowns, similar to the fate of Kodak
and Nokia

16. The assumption on CCS
• We are making this assumption: that in the medium
term future, Carbon Capture and Storage is very
unlikely to become a practicable, reliable and
economic approach to abatement of emissions from
fossil fuel power plants
• So far there are a number of pilot plants but industrial
scale effectiveness, if feasible at all, seems decades
away

17. The need to disclose risks
• John Hewson leads the Asset Owners
Disclosure Project
• “Of the 70 trillion dollars invested
through the world’s top funds, 55% are
in climate exposed industries and only
2% are in low carbon industries – a very
substantial risk”
• “A change in the balance is needed”
• He is encountering push back against
his disclosure campaign, even from
universities

18. The Kepler Cheuvreux report
• A leading independent European financial services company
• Report: Stranded assets, fossilised revenues (24 April 2014)
• US$28 trillion of fossil fuel revenues are at risk
• The greatest risk lies with marginal oil production (such as
deep water, oil sands, shale)
• Even with “ business as usual”, fossil fuel companies face
serious risks from an acceleration in the deployment of
renewable energy

19. Developments in Europe
• RWE (the second largest electricity utility in Germany) wrote
down its fossil fuel assets by €5 billion in March 2014
• Norway’s sovereign wealth fund, the world’s largest at
US$840 billion, is considering selling out of its investments
in carbon intensive companies (source: Forbes, 10 March 2014)

20. Oxford’s Stranded Assets Programme

21. Key findings
• Major new Australian coal mines need a coal price
above $100 per ton to be viable - the price has been
falling since 2011 and is currently $74
• Deutsche Bank, Citigroup, HSBC, Morgan Stanley and
UBS all forecast that coal demand in China will peak
between 2016 and 2020 (source: Institute for Energy
Economics and Financial Analysis)
• Issues in China include:
• Serious concerns about air quality
• Seven regional carbon markets
• Rapid uptake of solar energy
• China is also moving to replace imported coal with
domestic production

22. [3] The divestment movement
• The divestment
concept
• The role of
350.org

23. Fossil fuel divestment movement
• Began in 2010 in the US
• A response to public policy failure
• Energises local communities and organisations to take
action where government has failed
• Seeks public recognition that fossil fuels are no longer
an ethical or responsible investment
• Aims to pressure fossil fuel companies to switch to
less carbon-intensive energy sources
• Inspired by examples such as the 1980s South Africa
divestment campaigns

24. Australia Institute report [1]

25. Australia Institute report [2]
• Analysed 51 major Australian companies and
categorised them into four tiers based on the relative
level of fossil fuel exposure
• As examples:
• Whitehaven Coal was placed in Tier 1 (substantially
involved in fossil fuel extraction)
• ANZ Bank was placed in Tier 4 (indirect fossil fuel
exposure)
• Eliminating Tier 1 and Tier 2 companies from an
investment portfolio made negligible difference to
investment earnings and growth

26. 350.org
• The most significant player in the divestment
movement
• A grassroots movement represented in 188 countries
• Aims to see CO
2
in the atmosphere reduced to the safe
level of 350 ppm
• Public rallies
• Coal mine blockades

27. Its fossil free campaigns

28. Divestment achievements
• 11 universities and colleges
• 22 cities and 2 counties in the US (including Seattle
and San Francisco)
• 26 religious bodies (including the Uniting Church in
NSW and ACT)
• 19 foundations

29. [4] The ACT Campaign
• The Open Letter
• What you can do
• Conclusions

30. The Fossil Free ACT Campaign
• Open Letter to Andrew Barr
• Applauds ACT Government for its actions on climate
change, such as its:
• emissions reduction target of 40% by 2020
• goal of 90% of electricity from renewables by 2020
• Calls on ACT Government to go further by:
• Disclosing its investments in fossil fuels
• Placing a freeze on such investments
• Developing a 5 year plan to divest, subject to financial
responsibility
• We believe that these are moderate proposals

31. ACT Government investments
• Total investments of about $3 billion
• A portion of this is in companies with fossil fuel
exposure such as Horizon Oil, New Hope Coal, Aurora
Oil and Gas, Santos, Envestra Ltd
• The ACT Responsible Investment Policy mandates a
veto on investing in companies involved in tobacco
manufacture, landmines and cluster bombs

32. Support for the Open Letter
• Endorsement has been received from:
• 10 environmental organisations
• 2 health organisations
• Several prominent religious organisations
• 2 unions
• Approaches have been made to another 10-15
organisations which are still being considered

33. Related activities
• 350.org Canberra has also:
• Held public Fossil Free rallies such as the one outside the
Legislative Assembly on 27 March
• Supported the protest at the Maules Creek coal mine in
northern NSW
• Supported the National Day of Divestment Action on 2
May

34. What you can do
• If your Super fund has a “Sustainable” or equivalent
investment option, consider moving to it
• If you hold shares in companies with high carbon
exposure, reduce those holdings:
• Check out the Tier 1 and 2 companies in the
Australia Institute report
• Investigate renewable energy companies
• If you bank with one of the big four banks, consider
moving to a bank that does not invest in fossil fuel
companies or projects
• Consider rooftop solar!

35. To conclude
• 350.org Canberra is committed to working with groups
and individuals that are concerned about climate
change
• We support the divestment strategy in the light of
public policy failure in Australia and other countries
• We aim to foster public recognition that fossil fuels are
not an ethical or responsible investment
• We are motivated by the imperative of keeping the
earth for our young people, so they can enjoy its
beauty, its flora and fauna, and its habitability