Divestment, energy incumbency and the global political economy of energy transition: the case of Adani’s Carmichael mine in Australia

Curran, Giorel

doi:10.1080/14693062.2020.1756731

Cited by 25 publications

(11 citation statements)

References 40 publications

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“…Therefore, national governments should be expected to play an active role in financing the energy transition, and should not be misguided by the optimism expressed by some oil companies as to their future role in alternative energy generation. However, divestment may increase the cost of exploiting fossil fuels (see Curran (2020) for a case study of the Carmichael coal mine in Australia), thus making zero or low GHG emission alternatives relatively cheaper. We also observe that both the profitability and investment activity by fossil fuel companies decrease substantially during a smooth energy transition.…”

Section: Discussionmentioning

confidence: 99%

The financial impact of fossil fuel divestment

Plantinga

Scholtens

2020

Climate Policy

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The fossil fuel divestment movement tries to increase awareness about the need for climate action and heralds divestment from fossil fuel producers as a means to combat climate change. Financial investors are increasingly showing interest in the nonfinancial impact of companies they invest in, i.e. responsible investing. However, they also want to be assured of sufficient returns and limited risks to support the living costs of their ultimate beneficiaries. In this context, we investigate the impact of divestment and the transition of the energy system on investment performance. We rely on an international sample of almost seven thousand companies and study a period of forty years. Further, we investigate scenarios with very different pathways to the transition of the energy system. We find that the investment performance of portfolios that exclude fossil fuel production companies does not significantly differ in terms of risk and return from unrestricted portfolios. This finding holds even under market conditions that would benefit the fossil fuel industry. We conclude that divesting from fossil fuel production does not result in financial harm to investors, even when fossil fuels continue to play a dominant role in the energy mix for some time. Key policy insights. Financing the exploration and exploitation of fossil fuel resources is increasingly being regarded as controversial, leading to divestment from this industry.. Fossil fuel divestment does not seem to significantly harm financial investors and is not at odds with the fiduciary duty of institutional investors. This paves the way for more extensive initiatives to promote fossil fuel divestment.. A smooth energy transition will most likely erode the profitability of fossil fuel firms and their ability to invest. Therefore, governments cannot rely on the fossil fuel industry to finance the energy transition.

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Section: Discussionmentioning

confidence: 99%

The financial impact of fossil fuel divestment

Plantinga

Scholtens

2020

Climate Policy

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“…54 While more urgent change is clearly needed, the influence of climate justice activists in winning the argument for divestment is contributing to the transition to green energy. 55 These might be small steps, but they suggest that the mobilization of more holistic justice goals can help to enable transfor mations that transcend lockins to unsus tainable pathways. 56…”

Section: Multidimensional Environmental Justicementioning

confidence: 99%

Environmental Justice and Transformations to Sustainability

Martin¹,

Burneo²,

Coolsaet³

et al. 2020

Environment: Science and Policy for Sustainable Development

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“…For instance, Tudela (2020, p. 927) credits civil society mobilization with being 'the crucial driver' of moratoria on oil exploration adopted in both Belize and Costa Rica. Curran's (2020) contribution similarly describes how the divestment movement played a critical role in reducing the scope and scale of the proposed Adani Carmichael coal mine through sustained pressure on national and international financiers. Rafaty et al (2020), in turn, highlight a key role for litigation, often championed by civil society, in challenging coal mining permits across the world.…”

Section: Moving Forward: Domestic Opportunities To Manage Supplymentioning

confidence: 99%