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Ekos Welcomes Government Fossil Fuel Announcement

Ekos Welcomes Government Fossil Fuel Announcement

Environmental financing business Ekos welcomes the government’s announcement of the end of oil and gas exploration and says that any government that was accurately reading the global tea leaves would do the same. Executive Director Sean Weaver said that the start date for a managed transition out of fossil fuel production is long overdue.

“This courageous announcement sends the right market signal to corporate and institutional investors to start planning how they will shift their money away from fossil energy and towards clean energy. A key role of government is to share clean energy investment risk during a transition period so that investors can confidently change direction sooner rather than later” Weaver said.

Weaver attended the government’s launch of the Climate Finance Landscape report on Friday where Minister Shaw spoke about future proofing the economy from climate change risks. Stuff misquoted Shaw by implying he was suggesting businesses should sacrifice quarterly profits for the greater good of the future.

“That’s not what he said, and it is mischievous to put those words in his mouth. He was responding to the recently released Westpac report asserting that the New Zealand economy would be $30 billion better off if we respond to climate change sooner rather than later. Minister Shaw reiterated the Westpac view that the business community needs to include climate change risk in their strategic thinking rather than only focusing on a time horizon locked to quarterly profits.”

“This is a pivotal point worth correcting, because any sensible policy maker - and Minister Shaw qualifies as one - would understand that this is not about a trade-off between business and environment. It is about the business community recognising the economic significance of climate change risks and adapting to it.”

This view is also shared by the Insurance Council of New Zealand in its submission to the Productivity Commission, where they assert that company directors need to lead from the top to ensure that the businesses they govern adapt effectively to climate change risk.

To quote Insurance Council CEO Tim Grafton: “These steps need to be taken now because early adjustment is a least costly adjustment, and it will help contribute to a stable and predictable investment environment.”

Sean Weaver said that “detractors complain that jobs will be lost as the sun sets on the fossil fuel sector. But they forget to mention that lots of new jobs will be created as the sun rises on clean development. These new jobs will have much greater potential to be sustained long-term as the world changes direction.”

“To be clear, New Zealand will be reliant on fossil fuels for a long time yet, but the sooner we start this transition the sooner we will safeguard our economy from both fossil energy pricing risk and climate change risk.”

“Both of these types of risk exist as contingent liabilities on the balance sheet of NZ Inc., but few are acknowledging this.”

“If people want tangible examples of these risks just think for a moment about the escalating cost of dealing with more frequent ex-tropical cyclones smashing our urban and rural infrastructure, and the impact of more frequent and longer droughts on our agricultural communities. We also have to consider the very likely future expectation of our export markets demanding low carbon supply chains.”

“The sooner we make these liabilities transparent, the sooner we can all recognise that the strategic return on investment will be far more valuable to the economy than blindly persevering with business as usual,” Weaver said.

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