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Think global, act local: the role for councils in climate change

State and local governments are going it alone on climate change. Australian councils are starting to follow, write ANU researcher Dr Matthew Rimmer and climate campaigner Charlotte Wood.

Last week, United States President Barack Obama praised the efforts of United States mayors to tackle climate change:

More than a thousand mayors across America have signed agreements to cut dangerous carbon pollutions.”

As the mayor of New York, Michael Bloomberg emphasised the need for cities to show leadership on climate change. He observed:

For the first time in human history, more than half the world’s population is living in cities, which now produce approximately 70% of global greenhouse gas emissions … That puts cities on the frontlines of the battle against climate change — and more and more cities are leading the charge.

Mayors are pragmatists, not partisans; innovators, not ideologues. As the world becomes increasingly more urban, the importance of bold local action — particularly on climate change — will continue to grow.”

Cities and local governments are showing leadership on climate change, divesting themselves of investments in fossil fuels, such as coal, oil, and gas. A number of US cities — including Seattle, San Francisco and Portland — have adopted socially responsible investment policies, addressing fossil fuel investment, sustainability and climate change. Progressive Australian cities and local governments — like the ACT government, the City of Sydney and the City of Melbourne — should follow suit, and adopt policies which restrict direct and indirect shareholdings in fossil fuel companies and prohibit lending to fossil fuel projects.

In his book Oil and Honey, Bill McKibben tells the history of the fossil fuel divestment movement, emphasising that: “If it’s wrong to wreck the planet, it’s wrong to profit from wrecking the planet.”

In early 2012, McKibben and his organisation 350.org launched the Go Fossil Free campaign, which calls upon institutions to divest from the 200 coal, oil and gas companies owning the most carbon-intensive reserves. Initially, the campaign focused upon universities but it has since become mainstream — with 22 US cities, 20 religious organisations, nine universities and a handful of major foundations committing to divest and hundreds of campaigns underway internationally.

Announcing San Francisco’s commitment, Retirement Board Supervisor John Avalos said they could “divest responsibly without affecting the fund’s security or yield”. He stressed: “This is a great time to make a statement about how we can hold the fossil fuels companies accountable.” According to Seattle mayor Mike McGinn:

Divestment is just one of the steps we can take to address the climate crisis. Cities that do so will be leaders in creating a new model for quality of life, environmental sustainability and economic success.”

In June 2013, Portland mayor Charlie Hales announced his support for fossil-fuel divestment and urged the state of Oregon to follow his lead. He commented:

By acting locally, we can send a message to the world that investment in fossil fuels is a losing proposition, and that loosening our dependence on fossil fuels will increase our quality of life.”

Explaining why he was sponsoring Massachusetts’ fossil fuel divestment bill, Pittsburgh Senator Benjamin Downing said:

At some point, those fossil fuel companies will not be a good investment, and that will have an impact on our pension fund. We need to transition away.”

A number of Australian cities have shown significant leadership. The ACT government has a legislated target to reduce its emissions by 40% by 2020 and source 90% of its electricity from renewable sources by 2020. The City of Sydney has achieved carbon neutrality in its operations and has a 100% by 2030 local electricity generation target. The City of Melbourne aims to achieve zero net emissions by 2020. However, these policies are undermined by cities and local governments financing fossil fuels — either by banking with institutions that lend to fossil fuel projects and/or owning investment portfolios that include shareholdings in fossil fuel companies.

The ACT government has a socially responsible investment policy which excludes investments in tobacco, landmines and cluster bombs, yet casts a blind eye to fossil fuels. Its share portfolio includes companies such as Aurizon, which is slated to provide rail infrastructure to unlock nine huge coal mines in Queensland’s Galilee Basin, tripling Australia’s emissions and doubling our coal exports; Rio Tinto, one of 90 companies responsible for two thirds of the world’s greenhouse gas emissions; and ANZ, which is Australia’s leading commercial lender to fossil fuel projects.

Responding to a question about ACT government divestment last year, Chief Minister Katy Gallagher indicated that she felt doing so could risk lower returns. Yet global fund manager Aperio Group found that divestment from the world’s 200 largest coal, oil and gas companies and Australia’s largest fossil fuel companies has no material impact on returns.

The situation for local councils is slightly different than for governments such as the ACT. Having been hit hard by the global financial crisis, most councils in Australia are prohibited from investing in the sharemarket without ministerial approval. As such, most councils tend not to have share portfolios. This makes implementing a divestment policy a far more straightforward process. Council divestment policies would simply require that they: 1) not invest in fossil fuel companies in the future; and (2) not bank with financial institutions that lend to fossil fuel projects. This would include the Big Four who, since 2008, have loaned over $6.4 billion to new coal and gas ports along Australia’s eastern seaboard.

Sydney Lord Mayor Clover Moore has been a vocal advocate for action on climate change. She attended the Copenhagen Climate talks in 2009, supported the introduction of carbon pricing in Australia and has championed the City of Sydney’s plan to reduce greenhouse emissions, “Sustainable Sydney 2030”. Writing for CNN, Clover Moore warned:

With a warming of two degrees — and projections show we are headed for a four to six degree change — we risk catastrophic climate change … While Sydney is moving towards a more sustainable future, climate change demands we do more.”

Melbourne Lord Mayor Robert Doyle has discussed the role of cities in tackling climate change. Doyle has stressed:

We know that the ability of nations to compete in today’s global economy rests on the health, vitality and prosperity of cities. In Melbourne, our ability to be an engine for prosperity and sustainability rests in our own operations.”

Without efforts to wind back fossil fuel expansion, city governments will increasingly face the social and economic costs of dangerous climate change. It is time for Australia’s cities to take the next bold step in leadership on climate change and stop fuelling the climate fire that they are increasingly being forced to put out.

*Charlotte Wood is the Australian campaigns director at 350.org; Dr Matthew Rimmer is an Australian Research Council Future Fellow working on intellectual property and climate change and a professor at the ANU College of Law

5
  • 1
    poppy41
    Posted Thursday, 30 January 2014 at 1:37 pm | Permalink

    Can someone please email this article to Dear Leader and others in the Federal Government.

  • 2
    JohnB
    Posted Thursday, 30 January 2014 at 2:55 pm | Permalink

    Aurizon… is slated to provide rail infrastructure to unlock nine huge coal mines in Queensland’s Galilee Basin, tripling Australia’s emissions and doubling our coal exports.”

    This statement is silly - it cannot be true.

    Since virtually all of the 9 mines’ output will be exported, how can adding 100% to an existing activity (coal export) result in tripling of the whole nation’s CO2 emissions?

  • 3
    marcia lewis
    Posted Thursday, 30 January 2014 at 4:44 pm | Permalink

    Once the coal is dug up CO2 is then released into the atmosphere when it’s burnt. The fact that it may be burnt elsewhere is irrelevant.

  • 4
    AR
    Posted Friday, 31 January 2014 at 6:40 pm | Permalink

    Mayor Bloomberg?!? How long ago was this written?

  • 5
    Charlie Wood
    Posted Sunday, 2 February 2014 at 3:46 pm | Permalink

    Hi AR, the reference is “As the Mayor of New York”, i.e. when he was the major, not now.

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