RBA warns overseas markets are looking to Australia to decarbonise its production processes – including the est. 70% of product the agricultural sector exports

 The Guardian, 19 June 2021:

On Thursday morning, shortly after the resources minister, Keith Pitt, finished his “net zero by 2050: not on your nelly” sortie on the ABC, the governor of the reserve bank, Philip Lowe, touched down in Queensland Nationals country.

Lowe went to Toowoomba to deliver a keynote address at the Australian Farm Institute conference. The speech was principally about household debt, house prices and whether Australians could ever expect a pay rise. But during the questions that followed the presentation, the RBA governor was asked about decarbonisation in the agriculture sector.

Lowe told the conference he was often up late, participating in the international meetings that central bank governors participate in “and a very frequent question that comes up in those meetings is ‘what is Australian business doing to decarbonise?’”.

It is worth letting Lowe explain. “Many international investors are very focused on this issue and it’s particularly important for the agricultural sector because up to 70% of agricultural output in Australia gets exported – so you are relying on overseas markets, and increasingly overseas investors are asking about the carbon content of production, and that is a trend that is only going to continue,” the central bank governor said.

“So agriculture has tremendous opportunities here, but we need to find ways to disclose to global investors and global customers the decarbonisation strategy and how successfully we are doing that.

“It is a really important issue and it’s going to become more important.”

Lowe inhabits a universe where climate change is real, the science is settled, and global capital has already made its choice.

If you inhabit that world, there’s very little grey area. You can see that transformation is coming. You can see countries are now in a race to prosper in what Scott Morrison now likes to call the “new energy economy”.

That race is only intensifying.

Over the past couple of months, the International Energy Agency has said fossil fuel expansion must end now if the planet is to address the climate crisis; there has been a G7 declaration (with Morrison in attendance) that public financing of unabated coal-fired power must stop this year and a pledge that net zero emissions must be achieved by 2050 “at the latest”; Joe Biden, Yoshihide Suga and Justin Trudeau have pledged much deeper cuts in emissions by 2030; and Boris Johnson says climate action is Britain’s top priority and the UK will deliver a 78% emissions cut by 2035 compared with 1990.

In which the Nationals defend the mining industry against a dreaded national “zero emissions” policy being established

The Guardian, 17 June 2021:

The resources minister, Keith Pitt, believes the National party would be ‘unsupportive’ of any commitment to net zero emissions. Photograph: Mick Tsikas/AAP

The resources minister, Keith Pitt, has fired a warning shot at Scott Morrison, declaring he cannot adopt a policy of net zero emissions by 2050 without the backing of the Nationals.

Morrison has been trying to telegraph a pivot on climate policy since the election of Joe Biden as the US president, signalling Australia wants to achieve net zero as soon as possible and “preferably” by 2050.

The British prime minister, Boris Johnson, wants Australia to unveil more ambitious commitments before the UN’s climate change summit in Glasgow in November, and he maximised Morrison’s comments in London this week by saying Australia had already “declared for net zero”.

Morrison is facing pressure from metropolitan Liberals to make the mid-century commitment, as well as sustained pressure from his global peers to do more to reduce emissions sooner.

The Australian prime minister was at the G7 summit in Cornwall last weekend as leaders committed “to ambitious and accelerated efforts to achieve net zero greenhouse gas emissions as soon as possible and by 2050 at the latest, recognising the importance of significant action this decade”.

But a number of National party figures have been signalling for months they are not on board with Morrison’s climate change shift.

Pitt’s clear public warning shot on Thursday, in the wake of the G7 commitments and Johnson’s quip in London, is significant because the Queensland National is a member of the cabinet.

The resources minister said Australia’s climate policy – currently devoid of an official mid-century commitment – had not changed.

“We have not committed to net zero by 2050,” Pitt told the ABC. “That would require the agreement of the Nationals and that agreement has not been reached or sought.”

Asked for his own view, Pitt said: “It is all about the cost and who is paying.”

He said committing to net zero emissions by 2050 would “absolutely cause damage in regional communities” given those communities were reliant on export income from fossil fuels…….

Governments must not allow private, profit-seeking parties such as Facebook Inc.to put the entire global financial system at risk

Wikipedia, 22 June 2019:

A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify the transfer of assets. Cryptocurrencies use decentralized control as opposed to centralized digital currency and central banking systems……

As the popularity of and demand for online currencies has increased since the inception of bitcoin in 2009, so have concerns that such an unregulated person to person global economy that cryptocurrencies offer may become a threat to society. 

Concerns abound that altcoins may become tools for anonymous web criminals.

Cryptocurrency networks display a lack of regulation that has been criticized as enabling criminals who seek to evade taxes and launder money.

The Guardian, 22 June 2019:

Facebook is developing Libra from a base in Switzerland, in partnership with 27 other corporations – including Mastercard, Paypal, Uber and Vodafone – collectively known as the Libra Association.

Financial Review, 21 June 2019:

Facebook has just unveiled its latest bid for world domination: Libra, a cryptocurrency designed to function as private money anywhere on the planet. In preparing the venture, Facebook CEO Mark Zuckerberg has been in negotiations with central banks, regulators, and 27 partner companies, each of which will contribute at least $US10 million. For fear of raising safety concerns, Facebook has avoided working directly with any commercial banks.

Zuckerberg seems to understand that technological innovation alone will not ensure Libra’s success. He also needs a commitment from governments to enforce the web of contractual relations underpinning the currency, and to endorse the use of their own currencies as collateral. Should Libra ever face a run, central banks would be obliged to provide liquidity.

The question is whether governments understand the risks to financial stability that such a system would entail. The idea of a private, frictionless payment system with 2.6 billion active users may sound attractive. But as every banker and monetary policymaker knows, payment systems require a level of liquidity backstopping that no private entity can provide.

Unlike states, private parties must operate within their means, and cannot unilaterally impose financial obligations on others as needed. That means they cannot rescue themselves; they must be bailed out by states, or be permitted to fail. Moreover, even when it comes to states, currency pegs offer only an illusion of safety. Plenty of countries have had to break such pegs, always while insisting that “this time is different”.

What sets Facebook apart from other issuers of “private money” is its size, global reach, and willingness to “move fast and break things.” It is easy to imagine a scenario in which rescuing Libra could require more liquidity than any one state could provide. Recall Ireland after the 2008 financial crisis. When the government announced that it would assume the private banking sector’s liabilities, the country plunged into a sovereign debt crisis. Next to a behemoth like Facebook, many nation-states could end up looking a lot like Ireland.

Facebook is barreling ahead as if Libra was just another private enterprise. But like many other financial intermediaries before it, the company is promising something that it cannot possibly deliver on its own: the protection of the currency’s value. 

Libra, we are told, will be pegged to a basket of currencies (fiat money issued by governments), and convertible on demand and at any cost. But this guarantee rests on an illusion, because neither Facebook nor any other private party involved will have access to unlimited stores of the pegged currencies…..

Read the full article here.