What should Australia do?
- Australia should commit to phasing out coal, oil and gas by 2030, and ending public financing for coal, oil, and gas sooner. Not doing so will increase the risk of having a economy being left behind, likely to face a higher cost of capital and potential trade barriers if it disregards international agreement and expectation.
- Australia should work to achieve 100% renewable energy before 2030, seizing the opportunities to become a renewable energy ‘superpower’ and grow a thriving green industry economy and export opportunities (solar manufacturing, green hydrogen, green steel, etc).
- Australia should increase its current climate finance pledge to AU$3 billion over the 2020-2025 period, including but not limited to resuming contributions to the Green Climate Fund immediately.
- The current 2030 NDC and net-zero by 2050 pledges must be backed by detailed policy pathways to achieve these goals, including sectoral policies and roadmaps, and a plan for rapid fossil fuel phaseout that includes a just community transition.
What should be known about Australia?
- All states and territories in Australia and many of the nation’s largest companies and financial institutions have net zero by 2050 commitments.
- Economic analysis indicates that Australia would create AU$63 billion in fresh investment opportunities over the next five years by strengthening climate targets and policies in line with reaching net zero emissions by mid-century.
- Australia has 116 new coal, oil and gas projects in the pipeline. If they all proceed as planned, an extra 1.4 billion tonnes of greenhouse gases would be released into the atmosphere annually by 2030.
- Australian governments provide an estimated $10 billion a year in fossil fuel subsidies (including tax-based subsidies, public finance, and direct gifts) to large corporations.
- Subsidies for coal, gas and oil far exceed support for clean energy and have increased 48% since 2015. The electricity sector makes up the largest share of Australia’s emissions (33%) and has benefited from a Renewable Energy Target to 2020 that has now been fully subscribed.
- Australia has one of the most polluting power grids in the world with 62% of electricity generation coming from burning coal.
- Renewables are projected to supply around 53% of electricity generation in 2030 but with improved policies, planning and investment could be intermittent 100% renewables by 2025 according to Australian Energy Market Operator.
Recent developments, threats and levers for action
Recent developments
- At the May 2022 Federal Election, Australian’s voted for a change in Government for the first time since 2013. Labor won the election on a stronger climate action platform than the opposition. The outcome of the election is being touted as one to ‘end the climate wars’ in Australia.
- The election saw a reshaping of the political landscape, with a loosely coordinated group of “teal” independents, backed by Climate200 and many locally-led “Voices of” community movements, challenging both major parties to do more on climate change, government integrity and accountability, and greater representation of women in the political process.
- PM Anthony Albanese used his victory speech to put indigenous rights, women’s rights, and strong climate action at the front and centre of his new Government’s work. Climate promises are being delivered rapidly with the 2030 and 2050 targets already legislated.
- In 2023, after intense political debate the government passed reforms to the “Safeguard Mechanism”, a federal policy framework intended to manage and reduce carbon emissions from Australia’s biggest climate polluters. Coal and gas companies are likely to be hit hardest by the tougher regulations. However, the mechanism still does not address the fact that Australia exports most of its emissions in the form of fossil fuels and iron ore.
- In May 2023, the Albanese Government committed to legislating a Net Zero Authority which will have responsibility for promoting the “orderly and positive economic transformation” to net zero. The Authority will support workers, investors, and companies transition to new, clean industries, and support regions and communities to harness clean energy investments and opportunities.
- There have been calls for the Authority to also be tasked with planning for the broader, urgent phase down of fossil fuels like coal and gas across Australia as we accelerate the supply of new renewable energy. The Australian Government is actively bidding to host COP31 in partnership with the Pacific in 2026. They hope for the bid to be confirmed as successful before or at COP28.
- The Albanese Government promised to reform the Environmental Protection and Biodiversity Conservation Act (EPBA Act) as part of its election platform, following an independent Review establishing that the EPBC Act is not fit for purpose and doesn’t protect our at-risk ecosystems or endangered animals. The law should assess all new projects for their environmental and climate impacts, including development of new fossil fuel projects. However, the law currently doesn’t require the government to directly address climate change or consider its impacts. There is a push on the government to pause all polluting project approvals and urgently reform the EPBC Act.
Strength
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- A growing public opinion and consensus for more climate action and the energy transition
- Legislated 2030 and 2050 climate targets, reforms to safeguard mechanism, establishment of a Net Zero Authority.
- States, territories, and many businesses and investors have committed to net-zero by 2050
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Opportunities
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- Australia is well placed to be a world leader on renewable technology development and exports, creating billion dollar industry and securing future-proof economy and jobs
- Strong action on climate change would protect the natural environment and world heritage areas for generations to come, continuing a strong tourism industry.
- Australia’s action on climate would repair longstanding diplomatic rifts that have undermined Australia’s ambitions in the Pacific. This would also provide a meaningful foundation to engagement with regional commitments such as the 2050 Strategy for the Blue Pacific Continent.
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Weaknesses
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- Over Reliance on fossil fuels in the energy supply and economy
- Federal and State Governments not well aligned on policy or emergency response
- A lack of regulation is creating sub-optimal investment opportunities for renewables, EV’s, etc
- Under-developed market for EVs, due to lack of incentives, infrastructure and regulations.
- Refusal to embrace the clear direction of change is isolating and economically stranding Australia
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Threats
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- If climate momentum doesn’t translate into concrete plans and actions in this term of government, Australia could miss the opportunities of a net-zero economy and risk further isolating itself internationally and economically.
- Lack of just transition planning: coal-fired power plants are being outcompeted by renewables, there is a significant risk of coal-reliant communities being left behind without appropriate transition planning.
- Weak EPA reforms and safeguard mechanism, if not cemented in robust and ambitious policy changes, threaten to undermine Australia’s climate targets and environmental goals.
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About Climate Diplomacy Snapshots
The data is clear. Accelerated and enhanced action is needed now to build resilience and avoid the worst impacts of climate change. As they seek to address the ongoing health, economic and social impacts of COVID-19, the Ukraine-Russia war and growing climate change impacts, governments should seize opportunities to invest in a recovery that will build social, economic and climate resilience on the long-term.The Climate Diplomacy Snapshots aim to provide the climate community with a clear overview of what each country should do, on climate and recovery, to pursue these joint objectives and keep the global average temperature increase to 1.5°C. Each has been prepared with the help of national experts, and will be regularly updated. The snapshots aim to support climate advocacy in the lead up to COP28.