sustainability – Transport for Melbourne

Planning for “Sunset” Industries

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.

Energy Use – a reality check

One of the messages we have been repeating for some time is that humankind is living beyond the means of planet Earth to support us, that there is an imperative to reduce consumption of everything if we are to have a future, and that includes energy itself. This was the subject of a presentation made by Prof Damon Honnery at the Sustainable Cities Sustainable Transport forum in 2009. It is as relevant today as it was twelve years ago, but it is the scale of the reduction required that is worth repeating. His conclusions were as follows:

Energy demand will likely double by 2050, driven largely by population growth and increasing standards of living.
Although energy will become more expensive fossil fuels could likely provide for this growth.
But the world will have to reduce its per capita carbon emissions by 3 to 10x (Australia maybe 12 to 40x) to avoid dramatic climate change.
Renewable energy would have to increase by a factor of 20x currently used, with non-hydro sources by >100x.
Renewables available is limited to around 50-60% current energy use. It cannot provide for growth expected, nor account for emission reductions needed.
The world will have to get use to using less energy, Australians will have to get use to using even less.
Some of the figures quoted above will be greater now. As Honnery said in his presentation, even the transition to renewables requires energy, with a final reminder that the concept of using carbon capture to store emissions (a fundamental assumption in the federal government’s “strategy”) is laughable. Little has changed since, except the situation has become far worse and governments at all levels continue to ignore the fundamental realities and pretend our environmental challenges can be solved using technology alone in a business as usual environment.
What is required now is an update of Honnery’s projections by independent scientists in an environment in which they can provide their findings and advice, which can be peer reviewed without fear or favour. The imperative then is for governments to accept these findings and respond openly and honestly with appropriate policies and programs.