Chris Bowen has finally provided some certainty in Labor’s stance on stopping the Adani coal mine: “Not on my watch,” he said, fearing sovereign risk; as though it were the one political frontier we can never cross. But that horse has long since bolted.
Sovereign risk is an important concept; if governments cause large, unexpected changes in businesses’ operating environments, the cost of uncertainty jeopardises future investment.
No government would cause uncertainty by potentially taking control away from businesses… Surely…?
- The current government’s big-stick policy revealed potential forced divestments of power stations to keep them running past their end-of-life, to literally take control away from operators.
- Labor’s franked dividends changes will retroactively invalidate 15 years of financial advice, and
- Both parties passed the assistance and access bill, taking tech companies’ most valued asset - security, and eliminating it by introducing back-doors.
Blocking the Carmichael mine would be a significant change to Adani’s business environment, but not an unexpected one. With governments working to reduce greenhouse emissions, and the scientific consensus that to limit warming to 1.5°C coal must be left in the ground, the development of a new mine is more unexpected.
The Adani mine is not what protesters around the country are angry about. This is a proxy battle.
When people say “Stop Adani”, they really mean “Do Something” about climate change.
If parliament can’t muster the courage to listen to the will of the people and protect our future, then they really are causing a sovereign risk.
About the Author:
Aaron Hammond is an engineer driven by curiosity and a belief in innovation and knowledge. He has been endorsed by the Science Party and nominated for the federal division of Sydney, running on an platform to bring consistency and sensibility back to politics.