In February 2016, we were invited to contribute to the Australian Senate Economics References Committee’s inquiry into carbon risk disclosure.

The Senate had referred the Committee to look into carbon risk disclosure in relation to five areas of interest, including emerging disclosure frameworks, Australia’s role in on-going international discussions on carbon risk, and current oversight of carbon risk across the Australian government.

Carbon Tracker’s letter makes clear the importance for Australia to carefully consider the implications of our research. Namely, that significant sums of capital expenditure from Australian-based fossil fuel companies risks being stranded in a scenario compliant with international policy agreements and continued technological advances away from fossil fuel energy sources.

We highlight that carbon risk disclosure should assist the Australian government and investors in Australian-based companies in a more balanced consideration of the risks to its financial and energy sectors. As such, we recommend that implementing a stress-test of Australian-based fossil fuel supply in a two-degree pathway would be one sensible approach to consider.