Australasian Science Magazine

By Ian Lowe

Selling shares in fossil fuel companies may seem an ethical choice but it may equally be sound investment practice.

The recent decision by the Australian National University to sell its shares in a small number of fossil fuel-intensive companies provoked a real old-fashioned slanging match.

In the blue corner, several current and past Coalition ministers were indignant about the message that ANU was sending. As an extreme example, PM Tony Abbott ceremonially opened a new coal mine in Queensland in that same week and offered his opinion that coal is good for humanity. Blasts from the past like Peter Reith and Peter Costello also weighed into the debate, claiming that Australia’s standard of living depends critically on coal exports.

The Grattan Institute conceded that domestic gas prices will certainly soar with commissioning of the export projects now being developed, but counselled against government intervention to cushion local users, saying that the only way forward is to allow the market to operate effectively.

As would have been expected, the Murdoch press also jumped on board the bandwagon, quoting selectively from the International Energy Agency to claim that coal will still be meeting the great majority of an expanding world energy demand in 2030. One paper even attacked a Fairfax rival for daring to publish an opinion piece stating that Abbott’s faith in coal is wrong!

In what could be called the green corner, scientists were drawing attention to the urgent need to reduce the use of fossil fuels and pointing to the dramatic change in China’s energy policy, which threatens the economic viability of new export coal projects. The decisions to impose a tariff on imported coal and prohibit the use of coals with high ash content are very bad news for the export coal industry.

Coalition politicians are predicting gloom and doom, just as they did when they claimed that the previous government’s modest carbon price would lead to the $100 lamb roast and the death of Whyalla. However, their claims were put in perspective by the Australia Institute, a Canberra-based independent think tank. It pointed out that more people now work for Anglicare and Unitingcare than for the entire coal industry, while the contributions of coal to government funds are only a few per cent of their total revenue.

In fact, the fraction of the workforce in all forms of primary production has slumped dramatically in recent decades, as Australia has become a service economy. Total employment in all forms of primary production – agriculture, forestry, fishing and mining – is now less than the number who work in cafes, restaurants and take-away food outlets. The primary industries are still important employers in several rural communities, but their national significance is quite modest.

Adding to the momentum of the changing investment climate, thousands of people took to the streets in October to urge the major banks to be wary of lending to new coal projects. Many of the demonstrators said they had transferred their funds from the major banks to smaller financial institutions that don’t lend to fossil fuel companies.

We live in interesting times.

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The Australian government has announced that it will terminate the Cooperative Research Centres scheme and put modest funds into some new commercially-oriented centres. That looks like another great leap backwards.

The CRC program was proposed 35 years ago by the then-Chief Scientist, the late Prof Ralph Slatyer, who argued that Australia was performing well in scientific research but was failing to translate the findings into either commercial products or broader public benefits. Slatyer persuaded the Hawke government to begin a new scheme, with generous funds for centres bringing researchers together and those who could apply the findings.

The Coalition clearly has ideological problems with the concept of using public funds to advance the public good. During the Howard years, the centres working in such areas as coastal development and tropical pest management were wound up and the program concentrated on centres with clear commercial objectives.

Between 2007 and 2013, under the Rudd and Gillard governments, the pendulum swung back and funding again flowed to centres that had a broad public benefit as well as some short-term commercial outcomes. One of those new centres has a board chaired by a former senior minister in the Howard government, so the issue is not black and white.

Ian Lowe is Emeritus Professor of science, technology and society at Griffith University.