The coronavirus pandemic not only reached every inch of the world by creating a hysteria health crisis; it also affected the global economy. The ramifications saw long periods of lockdown that reduced income, increased unemployment and overall affected business and trade disruption. The development of new vaccines has seen world governments become proactive to boost economic prosperity but are now falling short in a global commitment to a green future.
For instance, in September 2020, Australian Prime Minister Scott Morrison confirmed that gas is the key element to re-establish a strong economy post-pandemic. The federal government authorised the development and implementation of five gas basins across the country with financial help from bank investment. The result of these gas basins will hinder Australia’s green future as they will emit over three times the country’s annual carbon emissions and reduce the globe’s chance to limit temperature to 1.5 °C.
Over the last five years, the big four banks of Australia – ANZ, Westpac, CommBank and NAB – have given over $35 billion to fossil fuels! These banks are accused of ‘greenwashing’ the general public because of their false promises about their environmental commitment. According to the Australian Conservation Foundation (ACF), these banks have ‘publicly committed’ to support the Paris Climate Agreement to limit global temperature rise by stopping financing gas by 2030 – 2035. However, they have chosen to still invest billions into developing fossil fuels projects with no legitimate plan to slow down.
To give an example, in 2019, activist group Market Forces stated there is a significant ‘disconnect between ANZ’s statements on climate and their investments decisions’ because the bank has increased their fossil fuel investment by 9% in 2018 and has openly supported coalminer Whitehaven. As of 2021, they have $8.2 billion invested in gas and oil extraction with no commitment to stop financing gas projects. The ACF has argued ANZ has continued to increase involvement in projects due to the federal government public support for gas as a mechanism for economic recovery. Compared to the other three banks, ANZ has not explicitly set an exit date for fossil fuel investment. Climate change is here, and the increase in carbon pollution will heighten rising temperatures and fuel extreme weather patterns – an already prominent case in Australia from its mass flood and fire seasons.
In addition, in 2021, the Intergovernmental Panel on Climate Change (IPCC) presented a clear warning of the dire impacts of climate change if significant action is not taken. It was also made clear through extensive research that the role of gas must decline 25% by 2030 and 74% by 2050 so that we limit warming to 1.5 °C to avoid a further climate crisis. So, the conclusions are clear: there is no room for banks to continue funding gas projects for the sake of Australia and the world’s economic future. Without the financial and valued support of the central banks in the federal government’s economic recovery disguise to implement gas basins, the chances for reconsidered sustainable strategies will increase.
There have been instances of change within banks and their role in Australia’s fossil fuel industry in recent months. For example, NAB recently cut its investment in gas by around $2 billion. In September 2021, Ross McEwan, the CEO of NAB, said they are reviewing their gas policies against the conclusions of the recent IPCC and International Energy Agency (IEA) ‘Net-Zero by 2050’ reports. These actions by NAB shows the opportunity to shift billions away from fossil fuel and towards green recovery in Australia!
Overall, due to the devastating consequences of COVID-19 and the momentum to boost economic propensity, Australia is falling short of creating a green and sustainable landscape. The discussion above clarifies that Australia’s central banks are a vital asset in such developments and hold power to prevent and remove themselves further from damage. The Australian government has the opportunity post COVID-19 to stop these banks and put the country towards sustainable trajectories that prioritise economic opportunity, poverty reduction, and our planet’s health at once. It is a chance to subside involvement and change the course of Australia and the world’s climate crisis. Removing the banks and redirecting strategies can lead Australia closer to a green future.