MELBOURNE (Reuters] – Banks, investors, and global regulators are taking ideological decisions about coal investments. However, there will be strong demand for the commodity in the future, according to Keith Pitt of Australia’s Resources Ministry.
Pitt’s National Party is a junior member in Prime Minister Scott Morrison’s governing coalition and represents many Australians living in coal-producing areas. It has rejected a target of net zero carbon emissions for Australia, which is the largest coal exporter worldwide, by refusing to support it.
Morrison has been prevented by the National from attending the COP26 Climate Conference in Glasgow. Global leaders will be meeting next month to discuss further climate goals.
Pitt stated that the record-breaking fuel prices in Australia are a sign that Australia is Australia’s second most lucrative export. He also said that financiers and insurance companies that have decided to divest from the sector aren’t making economic decisions.
Pitt explained that “the (financial] market is not making any viability decisions, they’re making an ideological decision.” Pitt stated, “If they made a decision based only on their forecasts, it would have been a mistake.”
Pitt suggested setting up an A$250billion ($180billion) loan facility that the government would manage for the sector to compensate for the absence of private funding.
Although the National Party will be meeting this weekend to determine whether they support the target of 2050, Pitt has not yet stated what plans the party has.
“I want to be very clear to Australia’s banks and the world’s banks, they don’t set domestic policy in this country,” he said.
These industries must be supported and supported by Australia’s economic growth, wealth, and employment.
Pitt stated that Australia is expecting a rising coal demand to 2030, and then a fall of about 40% by 2050. This was based on the presence of coal-fired power plants, and demand for high-energy steel-making coal in Australia.
According to Pitt, the International Energy Agency has reported that 140 gigawatts (GW), of new coal plants are currently under construction, and over 400 GW are in various planning stages.
Pitt downplayed the importance of alternative energy sources to transition the world from coal-based power generation, which is more polluting.
According to him, hydrogen markets will take years for development. While examples of governments making mistakes in energy transition could be seen in the UK or Europe’s energy crisis, which saw power prices “through the roof,” and showed that intermittent renewables are not a viable option.
There is not one solar panel that can work in darkness. Pitt explained that affordable, reliable power is what you need.
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