Climate crisis could dampen investment in Australia: reserve bank

Sydney, Australia, Oct 14 (EFE).- Australia runs the risk of seeing the investment of foreign funds slow down and registering an increase in costs if it refuses to join the international commitment against the climate crisis, the Australian Reserve Bank Deputy Governor said Thursday.

Guy Debelle said the crisis is a “first-order risk in financial systems,” insisting the reduction of polluting gases linked to it must be taken into account “regardless of whether we think these adjustments are appropriate or fair.”

“Investors will adjust their portfolios in response to climate risks. Governments in other jurisdictions are pursuing net zero emissions policies. Both increase the cost of emissions-intensive activities in Australia,” Debelle said in a virtual speech at the Investments Conference in Australia.

The message from Australia’s monetary policy regulator comes amid pressure from the Liberal-National coalition government to commit to a net zero emissions target by 2050 ahead of the COP26 climate summit, next month in Glasgow, Scotland.

Australian Prime Minister Scott Morrison, who has questioned his participation in COP26, is negotiating with his National Party partners, who oppose a shift in climate policies, considering it will affect rural and mining sectors, as well as inhabitants of the interior of the country.

Debelle said the climate crisis in the last five years has had a growing presence in the conversations of investors, who will adjust their portfolios in response to them, according to the reserve’s statement.

“The discussions have not yet led to changes in investor appetite for Australian equities or bonds, with only a few minor exceptions, (but) there is a risk that we will see more divestment decisions from this guy sooner rather than later,” he said.

Australia, one of the world’s biggest polluters considering its fossil fuel exports, has come under pressure from the United States and the United Kingdom to commit to the goal of neutral emissions as soon as possible.

Morrison has said his government would like to achieve net neutral emissions by 2050 through the development of clean technology.

“Australia has a lot at stake. We cannot take the risk of markets falsely assuming that we are not transitioning in step with the rest of the world,” Australian Treasury Minister Josh Frydenberg said in a September speech before businessmen in Melbourne. EFE

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