Stop Spreading Disinformation on Coal Demand

In their book Climate Change, Capitalism and Corporations, published prior to the Paris climate change meeting last December, Chris Wright and Daniel Nyberg highlighted how the dominance of neoliberalism in recent decades has locked the global economy on to a path of “creative self-destruction”, built around the oxymoron of “green capitalism”. Events since Paris have confirmed their thesis.

Just before Paris, the New York state attorney general, via the US Securities and Exchange Commission, secured undertakings from the world’s largest coal company, Peabody Energy, for violating state laws prohibiting false and misleading conduct in regard to Peabody’s public statements on risks posed by climate change. In part by misrepresenting the projections of the International Energy Agency (IEA).

For the past two decades, major companies, industry bodies, media and governments have been guilty of similar disinformation in Australia, a practice which is again evident in this election campaign.

Long ago, the IEA recognised the risks posed by human-induced climate change. It accepted that climate and energy were inextricably linked and dangerous climate change could only be avoided with fundamental change to the global energy system. Specifically by rapidly weaning ourselves off fossil fuels and transitioning to low-carbon energy supply.

The IEA has become a leading authority exploring this transition, regularly quoted by governments and business alike. It is subjected to great pressure by them to lean in suitably accommodating directions.

It handles this pressure by publishing, in its annual World Energy Outlooks (WEOs), its perspectives on the energy sector over the next 25 years. These explore the implications of taking alternative climate and energy pathways. Key scenarios are: current policies (CP) which assumes business-as-usual, new policies (NP) which extends CP with policy governments have committed to but not yet implemented, and the 450 scenario which is the pathway to keep global average temperature increase below 2C.

These scenarios are highly influential in justifying investment decisions. For Australia, global coal demand is one of the factors of greatest interest. In the WEO 2015 released last November, under CP assumptions demand would increase by 43% by 2040 compared to current levels, under NP by 12%, but under 450 scenario it declines by 36%.

The IEA takes NP as their central scenario as this is where we are headed if governments implement their commitments. However the IEA make it clear that NP is not a sustainable future. In its report, executive director Fatih Birol says: “We look to the negotiators in Paris to destroy our projections in our central scenario, which we show to be unsustainable, in order to create a new world in which energy needs are met without dangerously overheating the planet.” The Paris meeting agreed to keep global average temperature below 2C and pursue efforts to limit to 1.5C.

Warming would see global population and economic growth in steep decline or stalled. Poverty would massively increase as poorer countries are disproportionately hit by climate extremes. This is already happening.

As with Peabody, Australian organisations, through the Minerals Council, regularly misrepresent the IEA’s position. Typically they publicise the CP or NP outcomes and ignore the 450 scenario despite the fact that they publicly support the 2C limit. These inflated coal demand figures are then claimed to be IEA “forecasts”, justifying further coal investment and government support.

These organisations participate in IEA advisory committees and should be aware that scenarios are not forecasts. Scenarios demonstrate the outcome of certain choices and the IEA make it clear that CP and NP are choices we must not make. To suggest otherwise is blatant disinformation of the worst kind given the potentially catastrophic implications of distorting the IEA’s advice.

The Minerals Council of Australia has been one of the worst offenders, even in the current election campaign inconsistently using NP outcomes while claiming to support the 2C limit. The Minerals Council represents companies like BHP Billiton and Rio Tinto, who vehemently proclaim leadership on climate change and the urgent need to follow a 2C path, yet this disinformation is allowed to continue from the Minerals Council.

This propaganda is parroted by ill-informed politicians, such as energy minister Josh Frydenberg, claiming that,“The IEA tells us that 40% of today’s electricity demand is met by coal and by 2040 it will still be 30%”, and trade minister Steve Ciobo: “Global demand for coal is still going through the roof”. NP figures again, which imply an absolute increase in coal use of 23%. However the 450 scenario, to which the government supposedly committed to in Paris, shows coal’s share of electricity demand falling from 40% to 12% by 2040, an absolute reduction in coal use of 57%, which certainly requires no new coal mines.

Parts of media also to be blamed. The Australian is a serial offender but even the more balanced Fairfax press falls into the same trap. Not surprisingly, it still features prominently on coal company websites.

The government and opposition, who accept donations from fossil fuel interests which Wright and Nyberg refer to, both sing the praises of the Adani Carmichael mine in the Galilee Basin, Shenhua’s Watermark Mine on the Liverpool Plains, Kepco’s Bylong Valley adventure and Hume Coal in the Southern Highlands. All based on ill-informed premises and substantially contributing to increasing global temperatures well above 2C.

The cost to Australia, if this irresponsible misallocation of resources proceeds, would be enormous. Among other things, stranded assets as these mines are forced to shut down as climate impact intensifies; the lost opportunity of not investing in low-carbon future; the loss of agricultural productivity as mining disrupts prime farming land and water supply; and the social disruption caused to regional communities from abandoned operations. Plus, the full impact of potentially catastrophic climate change in a country more at risk than any other.

In the national interest, Australian regulators, including federal and state attorney generals, ASIC, the ASX and the Press Council urgently need to stamp out this misinformation as their overseas counterparts are doing. Particularly if we are serious about promoting “innovation, jobs and growth”.

An edited version was published in the Guardian on 1st July 2016