The too-cool-for-school deputy governor has sparked off a chain of other doomsayers who are quite happy to raise the alarm about the evils of coal without due to consideration to its ongoing demand in Asia. 

 

Debelle was not going to let economic reality get in the way of his very worthy speech to the Centre for Policy Development.

 

"Companies that generate significant pollution might face reputational damage or legal liability from their activities, and changes to regulation could cause previously valuable assets to become uneconomic," he said.

 

"All of these consequences could precipitate sharp adjustments in asset prices, which would have consequences for financial stability."

 

The RBA was paying close attention to developments in the energy market, Debelle said, "given the importance of the cost of electricity in inflation both directly to households and indirectly as a significant input to businesses".

 

He then went on to the meteorological catastrophe awaiting us.

 

"Extreme events may well have a disproportionately large physical impact," Debelle said.

 

"There is also a greater possibility of compound events, where two or more climatic events combine to produce an outcome that is worse than the effect of one of them occurring individually."

 

Debelle's dire warnings have emboldened Institute for Energy Economics and Financial Analysis director Tim Buckley and others in the anti-coal brigade to call for the New South Wales Independent Planning Commission to withhold approval of Whitehaven Coal's Vickery extension project.  

 

"This week, the Reserve Bank of Australia's deputy governor stated climate change will be an ‘abrupt and disorderly' blow to Australia's financial stability," Buckley said.

 

"Guy Debelle called for an orderly transition to a low carbon economy, which obviously doesn't include opening up new high emission coal mines like the one Whitehaven is hoping to have approved.

 

"Building new coal plants makes no sense in 2019."

 

On the other hand, coal-fired power station developer Trevor St Baker responded by suggesting Debelle lacked technical understanding of how the electricity market worked and dismissed his warning of risks to Australia's financial stability as  being "totally inappropriate".

 

"For the Reserve Bank governor to be entering the debate now, at a time when we have university students supporting, schoolchildren supporting, a strike to go 100% renewable in Australia by 2030 - it's just part of the problem - especially at election time," St Baker said.

 

Hogsback reckons that the RBA deputy governor might want to be cool but he should think through his comments about climate change more carefully or change his riff completely.