Frydenberg comes out fighting for mining sector
Treasurer Josh Frydenberg has urged banks, super funds and insurers not to abandon the mining industry during the economic transition to lower emissions.
Treasurer Josh Frydenberg (Photo: AAP Image/Lukas Coch)
In an online speech to major employers, Mr Frydenberg will say businesses that recognise climate change-triggered trends will have the most promising futures.
“At the same time, there is a message to Australian banks, super funds and insurers,” he is expected to tell the Australian Industry Group on Friday.
“If you support the objective of net zero, do not walk away from the very sectors of our economy that will need investment to successfully transition.”
The treasurer believes it is wrong to assume traditional sectors like resources and farming will face a decline during the economic transition.
“To go the next step and achieve net zero will require more investment across the economy,” Frydenberg will say.
“An economy-wide transition is needed, as in the words of the former governor of the Bank of England, Mark Carney, this isn’t about funding only deep green activities, or blacklisting dark brown ones.”
Instead, he favours a broad-based approach which invests in emissions reduction across all sectors including agriculture, mining and manufacturing.
“It’s a long-term shift, not a short-term shock.”
The Morrison government is under immense international pressure to commit to more ambitious emissions reduction targets ahead of a major United Nations.
Australia has become increasingly isolated over its refusal to adopt a 2050 net zero emissions goal.
While an increasing number of moderate Liberals have urged Prime Minister Scott Morrison to adopt the target, Nationals and other conservative MPs oppose the move.
Frydenberg praises BHP’s investment in renewable power at mines and pursuit of net zero emissions by 2050, along with Fortescue’s expansion into green hydrogen for steel making.
The treasurer will also note three of the world’s biggest fund managers – BlackRock, Fidelity and Vanguard – have a net-zero goal.
“For them, there is an alignment between the commercial opportunities and the environmental outcomes.”
Frydenberg warns reduced access to capital markets could impact interest rates on home and small business loans, along with the viability of major projects.
“Australia has a lot at stake,” he will say.
“We cannot run the risk that markets falsely assume we are not transitioning in line with the rest of the world.”
He argues the government is making progress on meeting emissions reduction targets and investing in new technologies.
State and federal energy ministers will meet on Friday to discuss incentives to keep dispatchable power running during the transition to cleaner technologies.