Josh Frydenberg rejects RBA climate bailout

Josh Frydenberg has dismissed a warning the Reserve Bank of Australia may have to purchase coal mines and fossil-fuel power stations.

Treasurer Josh Frydenberg in Canberra on Tuesday. Picture: AAP

Josh Frydenberg has dismissed a warning that the Reserve Bank of Australia may have to purchase coalmines and fossil-fuel power stations to save the economy from the impact of climate change, amid concerns the warming planet could trigger the next financial crisis.

The world’s top central bank on Monday urged other central banks to begin thinking about “green swan” or “climate black swan” events as the physical and transition risks of climate change emerged. According to the Bank of International Settlements report, this could mean banks buying devalued assets or stranded investments to “save the financial system”.

Asked on Tuesday whether he was concerned about the RBA potentially having to take ownership of coalmines or coal-fired power stations, the Treasurer said: “I can’t see that happening. Our own Reserve Bank of Australia has talked about the importance of climate change and how it is working on the impacts to the economy. But also, you’ve got APRA and ASIC who have also talked about climate change.

“What the (BIS) report also points out is the need for a balanced approach; a balanced approach which sees not only emissions reduction but adaptation, mitigation and resilience measures put in place without compromising the strength of the economy.”

The federal government has come under pressure in the wake of the bushfires to take action on climate change, with Scott Morrison insisting he will reduce emissions without introducing a carbon tax, increasing electricity prices and hurting jobs or the economy.

The Prime Minister will this year consider whether to adopt a 2050 net zero emissions target but has said it “wouldn’t be a good thing” for jobs.