Hello all you Gillard haters out there, part 2

The days of relying on natural resources are over

Ken Davidson summarises an important recent story:

Nathan Fabian is chief executive of the Investor Group on Climate Change, which advises 65 major institutional investors who are responsible for funds with a market valuation of about $1 trillion.

Fabian told a recent business Climate Alliance conference in Melbourne: ''A positive trend in the evidence of climate change impacts, from actual recent events, is becoming clearer. This is an important development … As you would expect with these developments in the science, the notable additional scrutiny is coming not so much from civil society, but from the elite economic institutions around the world and the investment community as well.''

The science now suggests that 2 degrees of warming is no longer safe. The International Energy Agency says that the world has a 50/50 chance of keeping warming to less than 2 degrees, if only one-third of the known reserves of fossil fuels are exploited. The International Panel on Climate Change says that to reduce the risk of breaking the 2 degree barrier to one-in-five would require leaving 80 per cent of the known reserves in the ground. (More risky than Russian roulette!)

Fabian quoted a recent report by Jun Mao, chief economist for Deutsche Bank, which shows that China will switch from being a net coal importer to net exporter by 2017; that the price of seaborne coal will fall to $70 a tonne; that even at $87 a tonne, 43 million tonnes of production from Australia would be forced off line; and that new developments planned in the Galilee Basin would not be profitable and couldn't attract finance.

The respected Carbon Tracker says that companies reliant on coal revenues are in an asset bubble. This might help explain why the market price of equities of mining companies such as BHP Billiton, Rio Tinto and Anglo American have continued to fall, despite the recent recovery in the share market generally.

The writing is on the wall for the lucky country. Unless we can manage risk - impossible without incorporating the environmental damage of burning fossil fuel in the price - the chance of dodging the bullet of catastrophic climate change is remote.