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QBE pulls support for plan to lift Warragamba Dam wall, cuts coal exposure

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Separately, Viv Bower, a senior QBE spokeswoman, singled out the NSW government’s plan to raise the Warragamba Dam wall by as much as 17 metres as one of the projects it would no longer support.

The decision comes days after the Insurance Council of Australia (ICA) announced it would no longer back the billion-dollar-plus project in its current form.

“QBE believes environmental and cultural heritage impacts are important considerations when exploring risk mitigation options for Warragamba Dam to ameliorate the flood risks for downstream communities,” Ms Bower said in a statement. “We support the ICA in calling for satisfactory environmental and cultural heritage impact assessments to be completed and made public to allow for full and open assessment of the potential impact of raising Warragamba Dam.”

Along with the Council, QBE would also support the “exploration of alternative mitigation options to reduce flood risks in consultation with the industry and traditional owners”, she said.

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The decision by QBE follows a similar rejection of the Berejiklian government’s dam-raising plan last October by IAG, Australia’s biggest general insurer.

The government has backed the project as a means of reducing risks in the flood-prone Hawkesbury-Nepean valley. It says the impacts of future additional inundation on cultural and environmental values of the Blue Mountains World Heritage area will be limited and temporary.

A spokesman for NSW Treasurer Dominic Perrottet said the government was “aware” of the comments by QBE and the ICA.

“The government is appraising a range of options to mitigate flood risk in the Hawkesbury Nepean, including raising the Warragamba Dam wall,” he said.

“No decision has yet been made and the government is awaiting the final business case, which will be delivered later this year.”

Warragamba Dam: the government plans to raise the wall at least 14 metres with provision to lift it to 17 metres in the future, to reduce downstream flood risks.

Warragamba Dam: the government plans to raise the wall at least 14 metres with provision to lift it to 17 metres in the future, to reduce downstream flood risks.Credit:Brook Mitchell

Minister for Western Sydney Stuart Ayres said it was important that environmental and cultural impacts of raising the dam wall were “weighed against the massive physical, economic and social impacts of unmitigated downstream flooding”.

“Multiple flood mitigation options were investigated before making the raising of the wall to create 14 additional metres of temporary water storage space the government’s preferred option,” Mr Ayres said.

“Ultimately this is a choice of where to hold temporary flood waters, behind a higher dam wall or in people’s businesses and living rooms.”

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Harry Burkitt, a campaigner with the Colong Foundation for Wilderness, said Mr Ayres had to explains how the government could “practically proceed” without private sector insurance.

“The practical reality of finding insurance for the assessment, construction and management of the raised dam is the next big challenge for Stuart Ayres and his dam-building bureaucrats,” Mr Burkitt said.

“The NSW Premier needs to stop Stuart Ayres wasting millions of taxpayers’ dollars justifying an unjustifiable dam, and immediately invest in the flood evacuation roads that western Sydney desperately needs,” he added.

The insurer is also reducing its exposure in thermal coal companies.

“Due to the thermal coal industry’s high emissions intensity, the availability of renewable energy and gas as substitutes, and in the absence to date of large-scale deployment of economically viable carbon capture and storage technology, we are committed to no longer directly investing in and phasing out insurance for the thermal coal industry,” the company’s risk framework states.

Those firms to be avoided will be those with more than 30 per cent of their revenue or a similar share of their power generation from thermal coal, it said.

QBE will extend support for longer to the oil and gas sector but start reining that in too, after 2030.

“As of 1 January, 2030, for companies with 60 per cent or more revenue from oil and gas extraction, QBE will assess whether the company is on a pathway consistent with achieving the Paris Agreement, and decline to provide insurance where this is not the case,” it said.

“This threshold will be reduced to 30 per cent from 1 January, 2040.”

However, Pablo Brait, a campaigner at Market Forces said the company was “kicking the can down the road on climate action”.

“Waiting nine years before assessing whether an oil and gas company customer ‘is on a pathway consistent with achieving the Paris Agreement’ is a complete abdication of responsibility,” Mr Brait said.

“Business as usual until 2030 will guarantee the failure of Paris. All companies undertaking or planning new oil and gas projects or expansions must be refused insurance, as their activities are not consistent with keeping global warming below 1.5 degrees.”

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