Australia – A political shift opens the door to increased low-carbon investments by the business communityWe Mean Business
When Malcom Turnbull was sworn in as Australia’s Prime Minister in September 2015, it signalled a significant shift in the government’s stance on climate actions. At this early stage, Turnbull’s challenge and defeat of fellow Liberal Party lawmaker Tony Abbott seems to herald the end of an era of “climate uncertainty” that marked the previous premiership – unleashing new opportunities for businesses to take advantage of low carbon investments.
Through past words and actions, the new Prime Minister has indicated strong support for renewable energy and an awareness of the seriousness of climate change. His views are more in line with the general population, and serve as a beacon for businesses to follow as they make determinations about the extent of their climate actions.
A recent survey commissioned by the Climate Institute found that 59 percent of Australian respondents believe their country should be a world leader in finding solutions to climate change. The same percentage said they believe that the previous government was underestimating the threat posed by climate change.
In August, near the end of Abbott’s premiership, the government did submit an intended nationally determined contribution, or INDC, that detailed the country’s contributions for the upcoming UN climate talks (COP21) in Paris. The INDC states that Australia will reduce greenhouse gas emissions between 26-28 percent by 2030 compared to 2005 levels.
Although considered one of the more conservative INDCs, it goes some way toward reducing the uncertainty that businesses have experienced, by providing a clear signal of the direction the Australian economy is going to take. It also represents an important starting point from which ambition can grow. The opposition Labor Party, for example, has already suggested introducing a moderate emissions trading scheme alongside an aspirational goal of 50 percent renewable energy within 15 years. And measures like the carbon tax, which was levied on the electricity sector between 2011 and 2014 and successfully reduced the sector’s carbon dioxide emissions, could be reintroduced. These type of policies would provide additional incentives for businesses to make low carbon investments, which suffered from a 31 percent reduction in the 2014-2015 financial year.
With COP21 and its implications dominating the business discussion internationally and the possibility of a new political direction domestically, now is the time for Australian business to take a bold lead in both advocating for a national policy framework that minimizes investment uncertainty and by taking a leadership role in demonstrating that low carbon investments make business sense. A number of companies are already stepping forward and pushing ahead with ambitious low carbon strategies.
In the energy sector, which contributes two-thirds of global carbon emissions, Australia’s largest energy retailer, Origin Energy, is committed to becoming the country’s leading renewable and low carbon energy provider. The company already commands a 700 megawatt owned or contracted wind portfolio and 225,000 green energy customers. It has installed 80,000 solar power systems directly in the last 10 years, and Managing Director Grant King says utility-scale solar powered systems will “most likely drive the country’s next boom in energy investment.” Origin’s leadership position was further solidified when it signed up for all seven of the We Mean Business (WMB) commitments.
Another WMB signee, Infigen Energy, saves more than a million tons of CO2 emissions a year from avoided fossil fuel generation and reduced Scope One emissions by 35 percent in 2014 with its wind and solar projects. Looking ahead, the company has a development pipeline of 1,200 megawatts of large-scale wind and solar projects spread across five states in Australia.
It’s not just energy companies that are seizing the business opportunities generated by a low carbon transition. Australian banking corporation Westpac is setting an internal carbon price to maximise energy efficiency across its Australian properties, which account for the majority of the company’s emissions. And Novion Property Group, a leading developer and manager of retail space, improved energy efficiency by 12.7 percent and reduced emissions intensity by 18.9 percent since 2008.
The convergence of business and government attention to climate action in Australia is good news for the country. In the latest annual report for Australia’s Clean Energy Finance Corporation (CEFC), Jillian Broadbent, a member of the Australia Reserve Bank and chairperson of CEFC, summed it up by stating, “Mobilization of public and private sector investment into renewable energy, energy efficiency and low emissions technologies can provide important opportunities for economic growth and productivity in Australia.”