Investors call for bipartisanship in Australia’s climate policy

Elections are fast approaching down under. At some point within the next couple of months, Australians will head to the polls. There is a lot hanging on the outcome, including the future of Australia’s energy transition.

In a joint statement, investor groups representing Australia’s largest asset owners have called for continuity and bipartisanship in climate policy. The statement is set against the backdrop of American climate policy reversals, following the election of President Donald Trump.

Stay the course

Signatories to the joint statement include the Investor Group on Climate Change, the Responsible Investment Association of Australasia, the Financial Services Council and the Clean Energy Investor Group.

At the core of the statement is a shared consensus that the potential politicisation of the financial materiality of climate change could be costly.

“Acting to limit climate change and its impacts makes good financial sense”, the letter reads.

Citing the rapid rise in renewable energy investment across the world, the letter makes the case that despite recent political events, investor confidence in the energy transition remains resolute. “Despite the ebbs and flows of global politics, Australia is in good company”, the signatories argue.

The letter goes on to argue that Australia is benefitting from net zero targets and has a lot to gain economically from the energy transition courtesy of its significant renewable energy capacity and mineral deposits.

The signatories’ key demand is continuity in climate regulations such as the Safeguard Mechanism and the mandatory climate disclosure regime - which investors have labelled a “generational shift” in Australian climate policy.

A potential reversal

The statement comes amidst the on-going reversal of climate policy positions within American regulatory agencies including the SEC. Despite the miles between them, Washington’s reality is a sombre reminder of a prospective future in Canberra.

Peter Dutton, Australia’s opposition leader has long opposed the government’s ‘renewables only’ climate policy. If elected, Dutton’s plan is to embrace nuclear power and increase gas production.

To his critics, the plan risks reversing the current government’s goal of over 80% renewable energy-based electricity by 2030.

“The Coalition’s nuclear proposal is a smokescreen for its commitment to climate pollution, a clear case of radioactive greenwashing”, says Amanda McKenzie, chief executive of the Climate Council – an advocacy group.

Chris Bowen, Australia’s Minister for Climate Change and Energy, has warned that Dutton’s plans risk missing the renewable energy opportunity.

“Meanwhile Peter Dutton’s only answer to how he’d make things better is to throw this opportunity away, cancel the programs and the projects that are working to make Australia better right now, and wait 20 years to build the world’s most expensive form of power. It’s madness”, Minister Bowen said in an earlier statement.

The future of climate policy down under hangs in the balance as Australians prepare to cast their vote. For investor groups representing Australian asset owners, bipartisanship and policy certainty is the need of the hour.

The spectre of an Australian climate policy reversal seems to have prompted an urgent call to avoid a US-inspired change in direction. Ahead of the country's federal election, investor groups have a message for those contesting it:

To whom it may concern, stay the course.