In our last forum we highlighted the need to plan for sunset industries that would struggle and ultimately have no future in a zero emission world and cited the airline industry as a prime example. TfM has expressed concern about the future of this industry for many years and anticipated growing market pressure to force change.
This is now happening and is the subject of an article by Charlotte Grieve in The Age 31 January Green-shorters aiming to force action on climate. Short selling is a blunt tool that can push down stock prices and make raising capital harder. Green shorting as an investment strategy is in its early stages in Australia, but is likely to pick up around the world as investors develop new ways to invest sustainably, but it can also be used as a tool to coerce companies towards net zero emissions.
Quoting from her article,
A Sydney fund manager, Plato Investment Management, which manages about $10 billion, has launched a new global net zero investment fund that short-sells ‘‘dirty stocks’’ to drive down carbon emissions and maximise profits. (It) is targeting energy giant AGL and national airline Qantas as part of a controversial investment strategy known as green shorting, marking the start of a more aggressive approach to sustainable finance in Australia. In the words of Plato managing director Mr Hamson, We have been coercing (companies) towards net zero. Hamson said that AGL and Qantas have both set targets of net zero emissions by 2050, (however), many ASX-listed corporates set targets with ‘‘no idea how to get there’’ and pointed to AGL’s extensive coal-fired power stations and Qantas’ reliance on yet to be developed technologies for carbon-free air travel.
The airline industry faces huge challenges to survive, even in the short term and it is difficult to see how it can achieve zero emission deadlines. Any growth achieved in the short term is likely to be short lived at best, together with tourist and other industries it supports.
Trade implications are profound and ultimately flow through to transport as a service industry for the city as a whole, and regional centres. The airline industry and industries it supports, including tourism are large employers and new jobs must be generated to offset their decline and ultimate demise. We don’t know what these might be but they need to be planned for. The situation will be similar to what the coal industry faces now but the implications are far greater. It is possible the shipping industry might come under similar pressure.
It is argued that transport planning should proceed on this basis. This must be reflected in all business cases for supporting transport infrastructure: not just the airport rail line but the city more generally which takes into account the flow on impact within the city and regional Victoria. The airline industry will be one of a growing number of industries that will come under pressure and forced to adapt in coming years. Many will fail and disappear. New ones will take their place but these also need to have a future in a zero-emission world. The process of adaption will be disruptive and must be planned for.