ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Natural disasters

Australia's fossil fuel giants discover charity as fires rage

Government sees no direct link between climate change and bushfires

MELBOURNE -- Australia's giant fossil fuel companies are facing mounting calls to help build a more climate-resilient economy as devastating bushfires have laid waste to an area twice the size of Belgium.

Despite donating millions to help victims of the fires which have killed at least 26 people and caused $4.4 billion worth of damage, companies including BHP, Rio Tinto and Chevron Australia have been criticized for not doing enough to mitigate the effects of climate change.

The world's biggest exporter of coal and gas, especially to key Asian markets such as China and India, Australia was recently ranked 57th out of 57 countries on climate-change action by a group of think tanks comprising the NewClimate Institute, the Climate Action Network and Germanwatch.

Dan Gocher, director of climate and environment at the Australasian Centre for Corporate Responsibility, called the company donations a "PR campaign" from a sector with almost unlimited budgets.

"The cost of doing nothing, is not nothing," said Gocher, adding that the consequence of "business as usual" on climate change was now visible for everyone to see.

While it's domestic emissions count for 1.4 percent of the world total, Australia's contribution to the world's pollution footprint is about 5 percent if emissions from energy exports are included, according to the Berlin-based science and policy institute Climate Analytics.

However, after factoring in pollution from proposed projects, such as the controversial Carmichael coal plant that is being developed by India's Adani Group in Queensland, that figure jumps to 17% by 2030.

In 2018, Australian coal exports brought in revenues of $67 billion, their highest ever, with Asian countries, with China, Japan and especially India the main markets.

Indeed, the importance of coal to Australia's economy underscores the government's position that there is no direct link between climate change and the country's devastating bushfires.

Stepping up efforts to cut emissions would harm the economy, the government has argued, especially if it hurt Australia's exports of coal and gas.

When India's Adani Group first announced plans for the Carmichael coal mine in 2015, it was forecast to be the largest in the world. Indian use of coal is forecast to grow almost 5% a year through to 2024, the International Energy Agency estimates.

"In most countries it isn't acceptable to pursue emission reduction policies that add substantially to the cost of living, destroy jobs, reduce incomes and impede growth," Angus Taylor, the country's emissions reductions minister, wrote in The Australian newspaper on Dec. 31.

However, critics point out that the country's fossil fuel industry also receives generous government subsidies, estimated at $29 billion a year, or $1,198 per person, according to a recent study by the International Monetary Fund.

Amanda Cahill, chief executive of Next Economy, a consultancy that advises on reducing emissions and climate change adaptation, said these subsidies should instead be channeled into building a climate-resilient economy.

"While we still have a fossil fuel industry that's still creating profits and is being subsidized quite heavily, is that an opportunity to harness some of that wealth to actually go back into the regions that have given them so much," said Cahill.

By contrast, Rio Tinto, Chevron Australia and BHP, through its foundation, have so far donated a combined A$4 million to organizations such as the Red Cross to support disaster relief after the fires ravaged New South Wales and Victoria, where over 2,500 buildings have been destroyed and an estimated half a billion animals have died.

"Chevron Australia is committed to supporting Australian communities, particularly in times of need," managing director Al Williams said. "We will continue to explore ways to help impacted communities in this time of need," Rio Tinto chief executive J-S Jacques said separately.

Dave Sharma, who chairs the Australian Parliament's Joint Standing Committee on Treaties and is a member of the ruling Liberal-National Coalition, said that while the fires had elevated the discussion on climate change, climate change was only one of a "multifactorial set of causes" behind the bushfires, which have taken place amid the country's hottest and driest summer on record.

Sharma, a former Australian ambassador to Israel and one of the government's rising stars, said he would like to see "more ambitious" emissions reduction targets, but believes Australia shouldn't limit coal exports either.

"I don't think we should be in a position where we're dictating to India or China that 'we don't think your energy mix is right, you've got to have less coal," said Sharma, adding that Australia's cleaner coal actually helped many developing countries to reduce their carbon footprint.

Environmentalists and some economists disagree.

Tim Buckley, the director of Energy Finance Studies at the Institute for Energy Economics and Financial Analysis, said financial markets were "pivoting" away from coal, as global efforts to curb emissions gained momentum and countries ramped up investment in renewables. He called the government "asleep on the wheel" over the issue.

"If our major customers move away from thermal coal, our economy is really exposed," Buckley said.

"To me it's inevitable . . . it's just a question of if it's going to happen in 20 years, 30 years or 40 years. Are we going to get caught with our pants down yet again, and again, and again, before we learn this lesson?"

While coal-fired generation is falling in the U.S and Europe, its continued use in Asia and elsewhere has seen coal production rise among major producers such as Russia, Indonesia and India, and the IEA estimates coal use worldwide will remain broadly stable over the next five years.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends July 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more