Continuing down the mine shaft will leave us with a dinosaur economy, writes ACF's Hannah Aulby
The International Energy Agency's latest coal market forecast provides a startling demonstration of just how far out of synch the Australian government is with the tide of global energy trends.
The IEA's Medium Term Coal Market Report 2015 shows world coal demand has peaked and is in decline.
The agency has slashed its five-year estimate of global coal demand by more than 500 million tonnes.
Coming hot on the heels of the Paris agreement to limit climate change to 1.5 degrees, the IEA report confirms the global financial and political shift away from coal.
Other finance analysts, including Goldman Sachs and IEFFA, believe 'peak coal' is already here. The UK Government has made a commitment to close all its coal-fired power plants.
Commentators have said the Paris agreement marks the end of the fossil fuel era.
Here in Australia, the economic implications of this shift are already being felt.
Anglo American recently announced a new round of job losses as a result of the company selling its Queensland coal mines.
Other companies, such as Cockatoo Coal, have recently been forced into administration.
Yet the federal government continues to back the industry, handing out approvals for new coal mines and continuing to subsidise coal projects.
Given the Paris climate agreement and IEA's dire forecast for coal demand, you'd think a responsible government, particularly in a historically resource-driven economy such as Australia's, would be looking ahead and planning for a future beyond coal.
Such forward planning would include transition plans for community and workers, mine rehabilitation plans and diversification of the economy.
But our government's response thus far has been to bury its head in the sand and continue to prop up a dying industry.
With more than $10 billion a year in subsidies, and many fossil fuel companies avoiding tax payments, it is not only the government that's propping up the industry; every Australian taxpayer is too.
Yet according to records just released by the Australian Tax Office, coal companies such as Adani Abbot Point Holdings, Anglo American, Yancoal, EnergyAustralia, Whitehaven and Glencore all paid no tax in 2013-14.
These companies didn't pay tax, but taxpayers paid the companies. The IMF estimates each Australian pays $437 in fossil fuel subsidies each year.
Continuing down the mine shaft will only lead to stranded assets in a dinosaur economy.
The Wiggins Point coal terminal is a stark example of this.
Opened earlier this year, after a long construction phase that included major dredging on the Great Barrier Reef, the Wiggins Point coal terminal is now struggling to pay its debts.
Banks are quickly selling off their stakes and major owners Bandanna Energy and Cockatoo Coal have both gone bankrupt.
Major debtor Glencore has now had a slump in its stock price, creating yet more instability for the project.
Initially aiming to ship 27 million tonnes in its first year, working up to 60 million tonnes at its peak, the project came in at only 1.2 million tonnes leaving Wiggins Point in its first five months of operation.
Wiggins Point will mean massive taxpayer subsidies, and will likely result in environmental reef destruction and exorbitant climate pollution – and for what? A ghost port in a dying industry.
What's next? The government has approved the Carmichael mine in the Galilee Basin – although ACF is challenging that approval in the Federal Court – and has given the green light to what would be the world's largest coal terminal at Abbot Point.
Will these turn into yet more stranded assets?
The Turnbull Government now has a choice.
It can continue down the mine shaft and keep wasting billions of dollars of taxpayer money on stranded assets.
Or listen to the IEA's forecast, diversify the economy and support the future livelihoods and clean, safe future for the 99 per cent of Australians that don't work in the coal industry (and the less than one per cent that do).
Hannah Aulby is a clean energy campaigner for the Australian Conservation Foundation
This piece was first published by the Brisbane Times