Modeling by the Investor Group on Climate Change (IGCC) shows that Australia could unlock a $63bn investment boom over the next five years if it moves towards a net-zero emissions economy. That growth would rise to $250bn by 2050. However, if nothing is done, then $43bn worth of investments would be lost over the next five years instead, and $250bn by 2050.
The transition would open financial prospects in sectors, including transport, renewable energy, manufacturing, and carbon sequestration. All the country has to do is align its climate policies with a target of carbon neutrality by 2050.
The IGCC represents investors in Australia and New Zealand – including members worth over $2 trillion – who are focused on the effect of climate change on the financial value of investments. The organization hired Energetics, a consultancy company, to examine the country’s potential domestic investment opportunities becoming carbon neutral by 2050.
The analysis shows that the transition would unlock $6bn for transport infrastructure like charging stations, $3bn in domestic green hydrogen production, and $15bn in manufacturing within the next five years, among other things. And investment worth $33bn in nature-based solutions for carbon sequestration would emerge – practices like assisted regeneration of deforested land.
By 2050, the investment potential rises to $104bn in transport infrastructure, $350bn in domestic green hydrogen, $102bn in carbon sequestration, and $385bn in clean electricity.
Erwin Jackson, the IGCC’s director of policy, said:
What it shows is that the investment opportunities extend well beyond just the renewables industry. Renewables are the backbone of the transition, but there are massive opportunities in other sectors such as manufacturing, restoring the land, and electrifying transport.
The report doesn’t factor in industries’ export potential like clean hydrogen; therefore, the estimates are conservative.
The report targets investors, companies, governments, and financial regulators. It stresses that if companies and investors collaborate to coincide their goals with the Paris agreement, and governments set stable, strict policies, millions of Australians would benefit from new jobs and wealth.
John Connor, Carbon Market Institute’s chief executive, said:
The reality Australia faces is its economy running below capacity. It needs a new direction. Clean technologies like renewable energy and transport represented significant opportunities for Australia in a post-carbon world. The country’s vast landmass, with landscapes in need of regeneration, gave it a competitive advantage in carbon sequestration. We can either coast off the cliff into the hothouse of economic and climate disaster, or we can turn a corner towards an orderly transition and the opportunities that are there.
The IGCC argues that the country will produce hundreds of billions of dollars less in investments without the net-zero target.
Jackson said:
Put bluntly, capital is global, and it wants to invest in climate change solutions because they see it as delivering more on their long-term investments. They’re going to invest more in countries that have durable, credible policies to achieve net-zero emissions by 2050.
Unfortunately, the Morrison government refuses to commit Australia to a net-zero emissions target. Its climate policy is only focused on a new technology roadmap covering energy storage, hydrogen, carbon capture and storage, soil carbon, and low carbon aluminum and steel. It says it will invest $18bn in such technologies over the next ten years.
Last month, AiGroup urged the Australian government to invest $3.3bn+ in renewables to avoid devastating consequences.
