Missed The Bank Tax Inquiry? Here’s 6 Points To Catch You Up

Today, a Senate Inquiry into the Major Bank Levy Bill 2017 was held in Parliament. Executives from the major banks and their associations gave evidence to Senators on a range of issues concerning the bank tax, including its likely effects and the policy process that led to its design.

Here are six key takeaways from the hearings.

1. Large scale deregulation and liberalisation of the financial sector is required

Australia is a corporatist country. Many sectors – finance, telecommunications, air transportation, groceries, internet service delivery – are dominated by a small number of large incumbent firms. Their market position is, in part, protected by regulations that make it difficult for smaller competitors to enter the market.

In the financial sector this includes the implicit government guarantee to bail-out a financial institution in the event of a failure. Anna Bligh, CEO of the Australian Bankers’ Associations argued that “I cannot imagine any Australian government of any political persuasion allowing one of our banks to fail.”

While large incumbent businesses may enjoy this position, the corresponding effect is that it is difficult for them to prosecute effective arguments against increased government encroachment. If some regulation is good, why is more bad? If the government guarantee is desirable, why is it wrong for the taxpayer to seek recompense for it?

In the future, it will be important for the banks to argue in favour of free enterprise capitalism, rather than crony capitalism. Yes, reducing regulation and red tape will have a negative effect on the market share of large incumbent businesses. But a more decentralised banking sector would make it more difficult for the government to justify interfering in the commercial affairs of financial institutions, which will be a long run benefit to the sector.

2. The process to develop the tax was poor

The hearings confirmed what has already been widely reported: that the design of the levy was rushed and lacked clarity of purpose.

Stakeholders had just two days to make a submission on draft legislation and only two days to provide a submission to the Senate Inquiry. The Commonwealth Bank noted that they only had one meeting with Treasury officials to discuss details of the policy. While Westpac noted that they had not received any modelling from Treasury despite requests.

In addition, the banks were required to sign non-disclosure agreements in order to receive details of the tax which is highly undemocratic and illiberal.

3. The tax is likely to be increased

Concerns were raised that the tax would likely be increased for two key reasons: firstly, the tax may not meet its revenue target, and, secondly, raising the tax is an easy option for future governments to meet any shortfall to general revenue.

A number of banking executives noted that this raises uncertainty about the future trajectory of the tax and is discouraging investment.

A similar tax introduced in the United Kingdom has been increased four-fold since introduction.

4. There is no such thing as absorbing a tax

Westpac was very strong on this point. Peter King, Chief Financial Officer of Westpac argued “a bank is not an entity separate from customers, shareholders, suppliers and employees.” Ultimately, a combination of these groups will pay the tax through, for example, higher borrowing costs and lower returns to shareholders.

Mr King also argued that the total tax liability increases as lending increases, which effectively makes the levy a tax on growth.

5. The tax has already had a negative effect

A number of the participants noted that the levy has already had a negative effect on the banks, financial markets, consumers, and the broader economy. Anna Bligh argued that $32 billion of share value was lost following the announcement of the tax.

This follows observations by business leaders outside of the financial sector, such as Alan Joyce, CEO of Qantas, that the levy is raising concerns that other profitable enterprises will be targeted for specific taxation.

Indeed, Mr King noted that “this law codifies the notion that it’s ok to tax a small number of companies to fill a budget gap just because they can afford it.” The effect has been to create uncertainty for investors. Mr King argued that institutional investors have already downgraded their position in Australia due to the tax.

6. There should be a sunset clause

All participants argued that, if the rationale for the levy is for Budget repair, then the levy should sunset once the Budget returns to surplus.

See the IPA’s submission to the Inquiry into the Major Bank Levy Bill 2017 and the Treasury Laws Amendment Bill 2017 here.

Everything you need to know about the Finkel Review

Finkel Review Will Make Electricity Price Problem Worse

If Superman pushed down a building then flew in to save all of the people, would he be praised as a hero or rightly condemned for creating the problem in the first place?

Renewables are not the hero of Australia’s current electricity price and security fiasco – they are the cause.

The problem with the Final Report of the Finkel Review, published this afternoon, is that it will only make this problem worse.

The only reason that prices are going through the roof and reliability is becoming a problem is because government legislation is pushing energy technologies that can deliver 24/7 electricity (coal, gas and nuclear) out of the market in favour of other technology (renewables) that cannot.

Clean Energy Target

The Review’s suggested replacement of the current Renewable Energy Target with a Clean Energy Target is a small improvement as it at least canvasses a role for coal and gas (to the chagrin of The Greens). The devil of course will be in the detail because if in fact only generators with carbon dioxide emissions below 700 kilograms per megawatt hour (700kg/MWh) of electricity are left penalty-free (as floated in the media this week) this will exclude almost all coal.

You can’t be serious about keeping power prices low if you rule out an ongoing role for the source of 75% of Australia’s current and 40% of the world’s electricity, particularly when Australia has at least 100 years of black coal and 1,000 years of brown coal still in the ground.

Under the 700kg/MWh rule, there is no way that Victoria would be able to efficiently use its world-class brown coal resource.

The Clean Energy Target will also be of little use if the states continue to do their own thing, with Victorian Premier Daniel Andrews this morning promising that he would keep his government’s 40% renewable target regardless.

Renewables Back-Up

The Review’s acknowledgement that renewables create intermittency and frequency variability problems is also welcome, though the suggested solution that new renewables in regions susceptible to supply disruption be able to cover shortfalls does not go far enough.

For supply security reasons and also to treat treating different fuel technologies equally, it should be a requirement that all generators be able to ‘cover’ those times when the weather isn’t playing ball either through alternative generators or batteries. The cost of this back-up should be met by each company, not the government.

Gas

Also welcome was the recognition that gas still has a role in the electricity mix, though it was ominously framed as a means to transition to a renewables-rich future.

However the report made it clear that new sources of supply are desperately needed and that rather than blanket bans on the unconventional gas industry, projects should be assessed on a state-by-state basis.

 

In fact, all energy sources – including gas, coal and uranium should be encouraged to participate in a free and open market to determine the most efficient way to generate electricity.

Three Years’ Notice

Evidence of the vengefulness of bureaucracy comes with the recommendation that generators will have to give 3 years notice if they want to close their plant.

Bureaucrats typically expect to be able to write the rules and boss the private sector around at will, hence were genuinely shocked and affronted when the operator of the now-closed Hazelwood brown coal power station in Victoria announced last November that it would close in March.

While most people in the private sector, or who have a personal relationship, know, if you treat someone like rubbish, and tell them over and over that they aren’t wanted, you shouldn’t be surprised if they suddenly pack up and leave.

 

It should be up to the private sector owners of a particular asset to decide if they can afford to remain in a particular market. If they want to leave then there is something wrong with the market, not with them.

Where To Going Forward?

The main take-out of the Finkel Report is that once again, carbon emissions policy has proven to be the tail wagging the energy affordability and reliability dog.

The role of an electricity system is to provide electricity for all of the consumers and businesses that need it – it isn’t supposed to be a laboratory for environmental activists to implement their own policy agenda.

While it will be up to government to respond to the report’s recommendations, it needs to do so cognisant of the need to keep the lights on and prices low. To this end, it is ominous that Federal Labor’s Shadow Environment Minister Mark Butler earlier this week spoke of taking whatever new scheme is implemented and scaling it up if Labor wins the next election.

Also ominous is today’s confirmation that major electricity company AGL that wholesale electricity prices having doubled over the last 24 months, retail electricity prices in major markets will rise by nearly 20% again on 1 July.

Electricity prices would be a lot cheaper, and supply a lot more secure, if governments let normal forces of demand and supply sort out how to satisfy consumer needs.

Brett Hogan is Director of Research at the Institute of Public Affairs 

Lionel Messi Is A White-Collar Criminal

Lionel Messi is in Melbourne with his Argentinian teammates to play Brazil at the MCG tonight. But should he actually be locked up in a Spanish jail?

Messi was convicted last year of evading millions of euros in taxes. His appeal was denied last month and his sentence of 21 months in prison and a €2 million fine was upheld. Messi, however, is likely to avoid jail because in Spain, first offences carrying sentences of less than two years are usually suspended.

By contrast, Melissa Higgins of Albury was recently sentenced to four years in prison for defrauding the Commonwealth of funding for her childcare business. Last year, we saw the sentencing of stockbroker Oliver Curtis to prison for insider trading. At the behest of the Greens, not normally known for being tough-on-crime, the Senate later held an inquiry into toughening penalties for white collar crime.

All of this takes place in the context of rapidly growing incarceration and related costs in Australia. Our national prison population has grown by almost 40 percent in the last 10 years, and governments now spend almost $4 billion on prisons each year. Fifty-nine percent of prisoners in Australian jails have been imprisoned before.

Forthcoming IPA research finds that Australia’s prison population has grown faster than all but five other OECD countries, and that our annual per prison expenditure is the fourth highest in the OECD. The growth of police spending has similarly far outpaced comparable countries. And yet, polling shows that despite this high expenditure, Australia consistently ranks among the countries whose people are most concerned about crime.

Clearly, we are not getting value for money. But how do we go about fixing this?

We need to start from first principles: personal responsibility and fair punishment. All offenders should be punished. Violent criminals must be locked-up to keep the community safe. But for nonviolent, low-risk criminals, other punishments are possible.

Unfortunately, the Spanish approach seems to forego punishment altogether for some offenders. We need an approach that recognises the inefficiency of jailing nonviolent, low-risk offenders but still delivers meaningful punishment.

In reshaping our criminal justice system, there are lessons we can learn from other jurisdictions. The IPA’s latest criminal justice research paper, Criminal justice reform: lessons from the United States outlines how reformers in American states have rationalised their states’ criminal justice systems towards community safety by targeting resources towards violent and recidivist offenders.

This process begins with punishment reform for nonviolent criminals, including petty thieves, low-level drug offenders, and white-collar criminals. Nonviolent offenders can be punished with a combination of home detention, movement restrictions, community service, fines, and restitution orders. These measures are cheaper and have shown promising results.

Community-based punishments also enable offenders who have jobs to continue in their work. This is important not only because unemployment is strongly correlated with a higher-risk of offending but because offenders can then be productive members of the community, rather than a drain on public resources. Which is to say, the public is better off with Lionel Messi on a soccer pitch than confined to a prison cell. And this should be a general principle, not one reserved just for famous and popular athletes.

If the Greens and others were serious in their contention that white-collar crime should be treated like violent offences, they would have objected to Lionel Messi being granted a visa. After all, over the years we have seen musicians, sportsmen, and activists all banned from entering Australia because of their criminal records. Singer Chris Brown was rightly denied entry because of his violent crimes, as was boxer Floyd Mayweather. Rapper Snoop Dogg was denied entry for drugs and gun charges. Tyler the Creator did not even bother applying for a visa, such was the controversy about his lyrics. If white-collar crime is so bad as to warrant prison, then Messi should have joined that list. Instead, the silence of the white-collar crime scare campaigners reveals their position to be inconsistent and opportunistic.

As we enjoy the spectacle tonight, we should imagine how it would be without its main attraction. His presence on the field should be a reminder that for some low-risk criminals, prison is an expensive waste.

Andrew Bushnell is a Research Fellow at the Institute of Public Affairs.

Image: “Messi Copa America 2011” by LG전자 is licensed under CC BY 2.0

McCapitalism burned by Hollywood

I should have known better. The founder of one of the world’s biggest corporations – and the forefather of ‘Big Food’ – was never going to get a sympathetic treatment from Hollywood.

But for a while, director John Lee Hancock had me. The Founder – Hancock’s biopic of McDonald’s founder Ray Kroc – starts promisingly enough. A down-on-his-luck travelling salesman, Kroc criss-crosses 1950s America, stopping at one lousy diner after another.

When a restaurant in the California desert puts in an unusually large order for Kroc’s latest gimmick (a state-of-the-art milkshake machine), he drives to San Bernardino to see it for himself. There, he meets Mac and Dick McDonald, proprietors of a thriving burger stand with lines around the block. They explain how they keep prices low by cutting down on overheads: No wait staff, all-disposable packaging and a menu limited to a handful of popular items. And unlike the drive-in restaurants, food at McDonald’s is served within 30 seconds, not 30 minutes, thanks to its revolutionary kitchen assembly line.

Obsessed with their brilliant business model, Kroc begs the McDonald brothers to let him franchise the restaurant. The three of them draw up a contract, and Kroc scuttles off to whip up franchisees in the Midwest.

So far, so good: A chance meeting of kindred entrepreneurial spirits gives birth to one of the greatest American success stories of all time. Hancock’s direction also makes the film a pleasure to watch and Michael Keaton is superb as Kroc.

But around the halfway point, The Founder gets preachy. Kroc’s commercial zeal sees him neglect his wife, alienate his friends and mortgage his house. But despite McDonalds’ runaway success, the paltry franchise fees are barely enough for him to break even.

Kroc’s luck changes when he meets Harry Sonneborn, an underhanded financial Svengali. With hushed tones in Kroc’s darkened office, Sonneborn convinces Kroc that he would make far more money if he owned the land on which McDonald’s restaurants were built and leased it back to the franchisee. Kroc is sold on what sounds an awful lot like modern-day serfdom and proceeds to buy up the land under every McDonald’s restaurant, including the original San Bernardino location.

When the McDonald brothers get wind that Kroc is their new landlord, their business relationship irreparably sours. Tensions had already been building: The McDonalds are suspicious of Kroc’s manic expansion of the franchise and unimpressed with his cost-cutting ideas, like using powdered milkshakes instead of ‘the real thing’. ‘This crass commercialism is not what McDonald’s is about,’ Dick McDonald pleads at one point, in an apparently bitter irony.

In the end, Mac and Dick have no choice but to let Kroc buy them out. They watch tearfully as the McDonald’s name – now a trademark owned by Kroc’s corporation – is removed from their restaurant. Apparently, the sum of $2.7 million they received is cold comfort (roughly $22 million US in today’s terms, probably the most expensive purchase of a single burger stand in American history).

The film ends in 1970 at Kroc’s Beverly Hills mansion, with Kroc practicing lines for a speech accepting an honour to be conferred on him by Governor Reagan (of course). When part of the speech alludes to him as the founder of McDonald’s, a flash of conscience crosses Kroc’s face (he stole it, after all), but it doesn’t last. Kroc smiles and staggers off like a demented villain.

Ray Kroc was, no doubt, a shrewd businessman who drove a hard bargain, but there is no evidence that he was the kind of unhinged sociopath Hancock portrays in The Founder. Kroc is driven to madness by his success, taking exquisite pleasure in steamrollering the McDonald brothers. ‘I’m national, you’re f—ing local’, he says to a distressed Dick, threatening to drown the brothers in legal fees if they try to wrest back their brand.

What should have been quite a ‘feel good’ – if complex – story becomes a tired meditation on corporate greed versus ‘the little guy’. Kroc himself is the biggest casualty: We sympathise with the earnest salesman at the beginning of the film and hate the heartless tycoon at the end. Capitalism is all well and good, until you actually end up with some capital.

Naturally, the film is mostly silent on the thousands of mom-and-pop franchisees for whom McDonald’s delivered a piece of the American dream, or the millions of jobs created, or the sizeable charitable foundations founded by Kroc during his lifetime.

It’s a wonder that the audience is spared the usual catalogue of grievances with McDonald’s: the obesity ‘epidemic’, preying on children, cultural imperialism and sundry environmental infractions. Maybe Hancock is saving all that for the sequel.

Gideon Rozner is a research fellow at the Institute of Public Affairs.

Climate Change: The Facts 2017

The Weekend Australian includes an article that begins:

“Iconic, ailing Australian satirist Clive James has penned a savage essay on climate change alarmism, controversially cooking everyone from Barack Obama to Kevin Rudd to Tim Flannery to Al Gore to Donald Trump in the boiled and rising ocean of his wit…”

The essay in The Inquirer section of the same newspaper is an extract from chapter 22 of the book I have been working on for many months now.

Contributors to Climate Change: The Facts 2017 do not conform to a unitary view.   As I explain in the book’s introduction:

“An advantage of my approach in the compiling of the chapters for this book – an approach where there has been no real attempt to put everything into neat boxes – is that there are many surprises. I am referring to the snippets of apparently anomalous information scattered through the chapters. These can, hopefully, one day, be reconciled. As this occurs, we may begin to see the emergence of a coherent theory of climate – where output from computer-simulation models bears some resemblance to real-world measurements that have not first been ‘homogenised’.

“There are many chapters in this book about ‘homogenisation’ (chapters 5, 6, 7, 8 and 9 by Anthony Watts, Tony Heller, Dr Tom Quirk, Jo Nova and me, respectively). Homogenisation, in essence, involves the remodelling of data, and is now a technique integral to the development of key official national and global measures of climate variability and change – including those endorsed by the IPCC.

It is generally stated that without homogenisation temperature series are unintelligible. But Dr Jaco Vlok from the University of Tasmania and I dispute this – clearly showing that there exists a very high degree of synchrony in all the maximum temperature series from the State of Victoria, Australia – beginning in January 1856 and ending in December 2016 (chapter 10). The individual temperature series move in unison suggesting they are an accurate recording of climate variability and change. But there is no long-term warming trend. There are, however, cycles of warming and cooling, with the warmest periods corresponding with times of drought.

Indeed, some climate sceptics consider the homogenisation technique used in the development of the official temperature trends to be intrinsically unscientific. They consider homogenisation a technique designed to generate output consistent with the computer-simulation models, which, in turn, are integral to the belief that there are consistent year-on-year temperature increases – contrary to the actual measurements. Temperature series that are a product of homogenisation could be considered ‘alternative facts’ – although, ironically, this is a term newly minted by those who generally agree with these self-same homogenised (remodelled) temperature constructs.”

Climate Change: The Facts 2017 is available for pre-order http://thefacts2017.ipa.org.au

Media enquiries should be directed to the IPA’s Media and Communications Manager, Evan Mulholland on 0405 140 780 or [email protected]

The Potential For Nuclear Power In Australia

While President Trump was last night finalising his Paris withdrawal announcement, in Melbourne the IPA was hosting an event on nuclear power  in honour of the visiting Director of Energy at The Breakthrough Institute in the US, Jessica Lovering.

Jessica is currently on a brief tour around Australia courtesy of one of Australia’s most fearless and influential organisations, the Minerals Council of Australia.

A nuclear policy expert, Jessica has been highlighting how the next generation of smaller-scale nuclear reactors currently under development  can be factory-built, don’t need water for cooling, and are able to better adjust output to demand, clearly giving nuclear the potential to revolutionalise the electricity industry.

Her visit couldn’t have come at a better time.

With an estimated 30% of the world’s uranium, Australia should be a world leader in uranium mining and technology, as well as nuclear energy. In a world currently obsessed with global warming, a power source that generates no carbon dioxide emissions should also be a no-brainer.

Yet Australia only has the one nuclear medicine reactor (Lucas Heights in NSW), and no nuclear power stations.

Incredibly, in the 21st century, two separate pieces of Commonwealth legislation (the Environment Protection and Biodiversity Conservation Act and the Australian Radiation Protection and Nuclear Safety Act) specifically prohibit nuclear fuel fabrication, power, enrichment or reprocessing facilities.

It gets worse. In 2015 the newly elected Palaszczuk Labor Government  in Queensland re-instated the ban on uranium mining which its Newman LNP predecessor had only just revoked (though confusingly a company can still explore, it just can’t mine it) and in Victoria a 34-year old Act of Parliament bans even exploration. Western Australia’s newly-elected Labor Government has also promised to ban new uranium mines.

Just as you wouldn’t expect 1980s fashion designers to influence your choice in clothes today, allowing ageing 1980s nuclear disarmament activists to influence 21st century energy policy is a throwback we could do without.

In its submission to last year’s Senate Environment Committee Inquiry into Australian Coal-Fired Power Stations, the IPA said that “electricity systems exist to provide safe, reliable and affordable power to consumers and to businesses” and that “the role of government should only be to support competition and private sector innovation in energy markets.”

The IPA also said in its submission that government could work with BHP to establish Australia’s first nuclear power station in South Australia to power BHP’s Olympic Dam mine as well as feed reliable electricity into the South Australian grid. Or even trial a small nuclear reactor to work in conjunction with a proposed South Australian nuclear waste facility as referenced in a proposal submitted to the recent Nuclear Fuel Cycle Royal Commission.

It is national scandal that Australia’s unofficial ‘no nukes, no gas, no coal and no dams’ policy has led the world’s biggest mining company to put the expansion of Olympic Dam on hold to the detriment of thousands of additional jobs in a state that desperately needs them, because it is unable to access reliable electricity.

All legislative prohibitions on uranium exploration and mine development, as well as nuclear enrichment, processing and power should be revoked. Nuclear technology should be allowed to compete alongside coal, gas, renewables and whatever else evolves in coming years for a place in the Australian energy mix.

University regulator backs down on free intellectual inquiry attack

Australia’s university regulator has backed down on a major attack on campus intellectual freedom, following public scrutiny by the Institute of Public Affairs.

In October last year the Territory Education Quality and Standard Agency quietly released a draft Guidance Note on ‘Diversity and Equity’.

The original note conflated equivalent opportunity with ‘creating the conditions for equity of outcomes’, re-defined social responsibility to include the politically loaded concept of ‘social justice’, and mandated censorious ‘inclusive language’. It even potentially required universities to teach ‘diversity’ in irrelevant contexts.

It was, as I wrote at the time in the IPA’s submission on the draft which was covered in The Australian, a breath-taking attack on free intellectual inquiry and diversity of viewpoints:

An understanding of diversity is a laudable goal. However, the implications of this are extremely problematic. By defining diversity as exclusively relating to identity groups (Page 1), and requiring “inclusive language”, TEQSA is encouraging the creation of a censorious culture on campus.

…The best-intentioned concept of “inclusive language,” to accommodate identity is, in practice, damaging to free intellectual inquiry. It encourages students and academics to not explore ideas, for fear it could hurt feelings or cause offence. This should not be encouraged by the sector’s regulator.

The note blatantly contradicted the higher education framework legislation on which it was supposed to be based, which obliges universities to have ‘a commitment to and support for free intellectual inquiry in its academic endeavours.’ The note could have been used, at the extreme, to deregister a university.

Six months after the original draft, the regulator has now released the final version of the note which is a substantial improvement. It rectifies almost all key criticisms in the IPA’s submission.

The long list of identity victim groups has been removed, the equation of equality of opportunity with equivalent outcomes is gone, social justice is no longer part of a university’s role. They have removed the sentence about including diversity in education itself. They have removed the requirement of ‘inclusive language’.

Importantly, for the first time the university regulator has stated:

Measures taken to accommodate diversity should also not contravene the pursuit of free intellectual inquiry, and more generally, freedom of expression.

This is a giant leap in the right direction.

The final guidance note is imperfect – the definitions are often vague, the prioritisation of diversity has not been removed, and the focus on student ‘self-esteem’ is maintained. Nevertheless, it is now far less dangerous in ambition and scope.

Universities must now act. The IPA’s Free Speech on Campus Audit found that four-in-five universities have speech codes, or have taken action, that seriously restricts free expression on campus. Speech codes prohibit ‘unwelcome’ comments, ‘offensive’ language, and, in the worst cases, ‘sarcasm’ and hurt ‘feelings’. Universities should abolish these speech codes and make explicit statements in favour of free expression.

Universities, to fulfil their purpose of debating and developing ideas, must remove existing restrictions on free intellectual inquiry.

Matthew Lesh is a research fellow at the Institute of Public Affairs

10 Things Oxfam Australia’s Coal Report Won’t Tell You

This week’s Oxfam Australia report “More Coal Equals More Poverty,” covered in the Guardian, repeated many of the environmental movement’s usual claims that coal-fired electricity hurts the poor, contributes to global warming and is just about to be eclipsed by renewables anyway.

Here is a quick response to some of its major points:

1) Electricity Capacity and Generation Are Not the Same

Like most pro-renewables reports, the report talks about the large increase in installed ‘renewable energy capacity’ and equates this to coal and other fossil-fuel power. Capacity to deliver is not the same as ability to deliver. Solar and wind power typically operate at 25% to 33% of their potential and of course at night or in still conditions deliver 0%. Coal, gas and nuclear machines can generate electricity 24/7.

2) The Cost of Renewables Is Not In Freefall

Renewables don’t operate in a real market where the prices are set by a buyer and seller coming to an agreement. In the renewables ‘market’ governments step in, subsidise or even directly pay to build new wind and solar, guarantee to buy their output or use ‘emissions policy’ to force cheaper energy sources like coal to close. If they are so cheap then why is electricity getting more expensive all over the world?

3) India is Not Ditching Coal for Renewables

Around 240 million people in India currently don’t have access to electricity and 840 million people burn oil, crop waste or other materials in open household ovens to cook their food. While the Government is doing everything it can to fix this problem including supporting new solar, wind and hydroelectric power, it also has 50 gigawatts of new coal (equal to about 33 Hazelwood’s) currently planned or under construction.

4) India is Not Ending Coal Imports

The Indian Government has promised to end coal imports only for its government-owned stations by 2018 (though this target keeps getting moved back). Its Energy Minister has openly acknowledged that this does not affect privately owned coal power stations like Adani’s.

5) Village Renewables Will Never Power a Modern Industrial Economy Like Coal, Gas and Nuclear

In October 2015, Scientific American published an article that exposed the truth behind the environmentalist fantasy of solar panels powering villages in poor communities. After living through it, villagers demanded “We want real electricity, not fake electricity.” If solar and wind don’t generate enough electricity to power a small rural village in a poor part of India, how can they fuel a modern industrial economy?

6) Banning Australian Coal Exports Will Just Hand Money to Someone Else

While Australia has one of the world’s largest coal reserves, there is plenty of coal in the USA, Russia, South Africa, China, Indonesia and many other countries. If the environmental movement successfully closes the Australian coal export industry, someone else will just take our place.

7) The Paris Climate Change Agreement Doesn’t Actually Reduce Global CO2 emissions

The dirty little secret of the environmental movement is that the 2015 Paris climate change agreement isn’t legally binding and doesn’t actually reduce carbon dioxide emissions. If all countries actually implemented what they promised (which is itself unlikely) carbon dioxide levels will still rise. Reducing ‘per capita emissions intensity’ is not actually reducing emissions!

8) Weather Is Always Changing and Will Continue to Do So

The world’s temperatures have been going up and down for millennia. In fact, some studies have found that ice coverage in the Arctic and Antarctic has been increasing, hurricanes in the US are declining and increased atmospheric CO2 is actually helping to green the planet. Pointing to occasional extreme events and blaming them all on CO2 is not objective.

9) The Solution to Land Availability Problems is Not Renewables

One coal-fired power station can deliver cheap and reliable power to millions of people for decades and takes up a lot less land than the thousands of wind turbines or solar panels needed to match its output. The national wealth created by cheap and reliable electricity will help locals, especially those in poorer nations, to improve their local environment.

10) The World Is Not Dropping Coal

Greenpeace found in early 2017 that a total of 62 countries are planning over 800 gigawatts of new coal-fired power stations, equal to over 30 times Australia’s current coal-fired capacity. Bloomberg New Energy Finance last year found that global investment in new coal power would be worth $1.2 trillion between 2016 and 2040 and the International Energy Agency predicted last year that more coal would be consumed for electricity in 2040 than today.

If coal is so harmful and already on the way out, then why are so many countries investing their money in it? Unleashing the natural stored energy in coal, gas and uranium gives billions of people their best chance to get out of poverty.

Brett Hogan is Director of Research at the Institute of Public Affairs