According to the Bureau of Meteorology, Australia has already warmed by 1.44 degrees and its impact is being seen and felt in the destructive floods through NSW, Victoria and Queensland. The warmed climate is already making bushfires so intense that it created a pyrocumulonimbus that was powerful enough to flip over a ten-tonne fire truck, tragically killing a firefighting volunteer, Samuel McPaul.
We are in a climate emergency.
The World Meteorological Organisation just frighteningly declared that the world released record high levels of methane, carbon dioxide and nitrous oxide. In the powerful words of UN Secretary-General, we are facing ‘collective suicide’ if we don’t take collective action.
The Australian Government’s currently legislated target aligns with more than two degrees of warming and is not compliant with the Paris Agreement. Nation states must be ‘pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels’.
In short, over coming years Australia will endure more frequent and more intense natural disasters than what we have to date experienced. Our exposure and risk will only grow if we open up any of the 114 new coal and gas fields that are being proposed.
The primary task of governments is to keep its citizens safe, but supporting coal and gas expansion is putting every citizen in harm’s way.
So, while the Australian Greens support the principle of recalibrating all of the Emergency Response Fund’s allocations to pre-disaster preparedness, the funds on offer do not go anywhere near what is required to keep Australians safe from coal and gas fuelled natural disasters.
The Insurance Council of Australia has calculated that the public investment needed to protect against storm surges is $30 billion over the next fifty years. This equates to $600 million a year, just for one type of natural peril that we face.
The Disaster Ready Fund will only provide $200 million a year, one-third of one type of peril. At such funding allocations, fires, floods, droughts, storms and cyclones moving southward cannot be sufficiently protected against.
Lifting the annual allocations will create more jobs, save the budget much more in the long run, improve the safety of communities and lower the insurance premiums of homes and businesses.
Recommendation
That the Emergency Response Fund Amendment (Disaster Ready Fund) Bill 2022 (the bill) should be amended to increase the annual allocation limit that can be spent so that Australia can better guard against climate-fuelled natural disasters.
Under the Emergency Response Fund Act 2019 and retained by this bill, the Future Fund is responsible for making disbursements that will fund disaster preparedness.
The Australian Greens have a deep concern about the philosophy that the reliability of disaster-ready funding should be pegged to the fortunes or misfortunes of financial markets in which the Future Fund invests.
The decline in returns should not ever lead to a reduction in annual public spending that is needed to protect communities and lower their insurance premiums.
Furthermore, the requirement for Ministers to consult with the Future Fund Guardians before making allocations above the limit seems to be needlessly constraining. The purpose of this ceremony is questioned by the Australian Greens.
Finally, there is a deep inconsistency at the heart of this legislation whereby the dividends paid to the Future Fund by coal, oil and gas companies are being used to protect Australians from the very same disasters that these companies are causing.
When this bill passes the Parliament and becomes the Disaster Ready Fund, it will start off holding $21.2 million invested in coal, oil and gas companies. This is like a hospital being funded by dividends from tobacco companies.
In response to my questioning, the Future Fund just revealed in Senate Estimates that across all their investments they have $3.4 billion invested in the world’s 50 biggest polluting companies.
In particular they have $549 million invested in Woodside who intend to develop the massive Scarborough and Browse gas fields. There is $190 million in Santos who intend to open up the Beetaloo and Barossa gas field which will produce more emissions than gas. Then there is $83 million of exposure in Whitehaven, who ironically had to halt production because of the extent of the floods.
These three Australian companies have absolutely no intention of changing their business model to move away from the coal and gas that is throwing our climate system into turmoil.
If the Future Fund does not have an appetite to ask their fund managers to engage directly with the coal, oil and gas companies that it holds ownership stakes in, it should simply instruct those fund managers to divest its shareholdings and repurpose those funds into companies and assets that advance a safe and prosperous net zero society rather than threaten it.
Recommendation
The bill should be amended to prevent the Future Fund, in its management of the Disaster Ready Fund from investing in any coal, oil or gas companies or any related assets under management.
Senator Barbara Pocock
Greens Senator for South Australia