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There is a simple logic that underpins investment. Risk versus reward. Nobody will invest in something if they do not see the potential for a return and they expect a greater return for a greater risk. Simple. So how does this relate to coal power stations in the current climate?

Investment in infrastructure seems to be a safe and long-term bet – this has long been the case for power infrastructure. Small risk but consistent reward. It’s not anymore. Despite the noise in the public sphere doubting climate change science, there is little doubt among the scientific community and most governments know that it’s only a matter of time before they need to act on this issue. This, on top of the awareness that fossil fuels are finite resources, has led to most investors clocking on to the reality that investment in non-renewable power sources is a relatively short term bet. Whichever way you think, there is a foreseeable point at which a coal burning power plant becomes worthless. If we can’t burn coal anymore or if there’s no coal to burn, that multi-billion dollar investment is worth only the sum of its scrap value. The end of coal is still down the road but it is signposted and it’s coming up.

Energy costs are rising and the decisions being made about Australia’s energy future have more resonance today than they have in the past. While climate policies in Australia remain unresolved, there is uncertainty about the future of the Australian energy industry and investment has been stifled. What is clear around the world, however, is that investing in renewable energy projects has become a better investment than traditional high pollutant power sources.

Yet in Australia, plans still exist to build 11 new coal power stations around the nation. The recent approval of the new brown coal station in the Latrobe valley is controversial for a number of reasons – but not least for the admission of Australia’s big four banks that they won’t finance the project. Greenpeace’s 2010 Pillars of Pollution report brought substantive focus onto this issue and the banks’ role in the climate crisis.

Westpac responded quickly to the issue and have since released a new policy on “financing sustainable energy” last year. The reform of their lending policy aims to address public concerns that its sustainability rhetoric doesn’t match its lending practices. ANZ has also committed to an increased level of funding of renewable projects.

Despite their policy shifts and their welcomed refusal to fund the Latrobe station, none of the big four have ruled out future funding of new coal power projects.

ANZ, Westpac and the NAB have been intent on marketing their sustainability efforts. But ANZ in particular has been singled out as the worst of the major banks by Greenpeace and are the target of a sustained campaign by a coalition of groups who share those concerns. Over the last five years, ANZ has poured $1.6 billion into the coal industry – more than six times greater than its renewable energy investments.

If ANZ and the other big four made a commitment not to finance new coal power stations and instead put those finances into supporting large-scale renewable energy projects, they would be avoiding the economic uncertainty of backing polluting coal power and guiding the much needed transition to a low carbon economy.

The author of this piece is Sam Rooke, an activist with the organisation Greenpeace, and the opinions expressed are his own, and do not reflect those of money-au.

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