The Minerals Council of Australia has released a critique I wrote on the fossil fuel divestment campaign.
The coal disinvestment campaign is built on false scientific and economic sophistication and fuels what is little more than a series of illegal secondary boycotts of fossil-fuel companies.
That, at least, is the comforting conclusion of an independent analysis prepared by Melbourne academic Sinclair Davidson of the hydra-heading global campaign to blackguard the coal industry.
Now before all you disinvesting environmentalists climb even higher on your horses, I say “comforting” only because Davidson’s unquestionably high-level analysis of their efforts was paid for by the Minerals Council of Australia. And since last year’s takeover of the Australian Coal Association, the MCA has been the father of coal advocacy in Australia.
Oh, and for the record, Davidson is professor of institutional economics at Melbourne’s RMIT University and a senior fellow at the Institute of Public Affairs. And that is the sort of intellectual pedigree that means his thoughts were not sought to convince coal antagonists that they have got it all wrong.
Davidson’s critique of the coal disinvestment campaign is, nonetheless, black gold.
The paper highlights the obvious fragilities of an investment thesis that is demonstrably more likely to hurt the disinvestor than the disinvested.
A campaign to force banks and fund managers to pull capital from the coal industry could be in breach of the law and cost the economy billions, according to the mining lobby.
A paper to be released on Monday by the Minerals Council of Australia says the campaign “may contravene the letter or the spirit” of the Corporations Act, and calls on the corporate watchdog to assess the potential breach.
The council commissioned Sinclair Davidson, a professor of institutional economics at Melbourne’s RMIT University, to write the paper, in its most aggressive push-back to the anti-coal collective’s urging investors to sell shares in coal companies.
“To the extent that stigmatisation deliberately causes investors to make valuation errors and consequently rebalance their portfolios away from fossil fuel stocks, a violation of the Corporations Act has occurred,” Mr Davidson writes.
The campaign rested on “false premises and unsubstantiated claims”, and would cost the economy from $29 billion to $36 billion a year if it succeeded in shutting down the industry, he said.
Twitter, of course, has gone wild. Apparently deliberately causing valuation errors and participating in secondary boycotts constitute principled free speech.
Please download the paper from the MCA – have a read. Enjoy.