Emissions reduction is a fundamental and core component of any serious climate policy reform agenda. To achieve Australia’s current climate policy ambition of a 43% emissions reduction, Minister for Climate Change and Energy Chris Bowen has slated a target of 82% renewables into the electricity grid by 2030 – he has publicly acknowledged that’s a mere 84 months. 

Eighty-two percent renewables into an increasingly decarbonised grid is key to driving the broader market shifts and consumer sentiment across the economy needed to enable the energy and climate transition. Let’s take a moment to appreciate what that means for Australian society as we grasp the pathways ahead in realising this ambition. 

While we pause at this juncture, let’s also realise the economy is nested within our social structures, which in turn are reliant on a well-functioning natural environment. 

In September, Minister Bowen attended climate week at the United Nations General Assembly in the US. While there, as well as test driving an electric Ford F150 ute, he also discussed possible pathways to achieving Australia’s newfound ambition, including: 

• a significant increase in the scale of wind turbine installation
•  tens of thousands of solar panels between now and 2030
• offshore wind energy production – somewhat unknown but looking promising 
• encouraging domestic manufacturing to increase domestic productivity and address supply chain vulnerability – with an ambition for “more reliable supply chains and more supply chains in total”
• recognising a new resources boom in minerals.

The new Climate Change Act provides clarity to investors and a social license to operate and engage in higher risk/reward innovation – renewables and energy sector start-ups, for example, will be tomorrow’s powerhouses of productivity. By giving greater weight to the Climate Change Authority and requiring the tabling of an annual climate statement in Parliament, the new Act also embeds greater transparency and accountability into the transition process. 

Transition risks (along with physical climate risks) are an important factor here. Such risks (which should be thought of as things to avoid as well as opportunities to be had) require greater clarity of consideration and response from both government and from the private sector. 

These risks apply across the economic, social and environmental domains. For example, to adequately manage the economic stability needed to enable an affordable and reliable supply of essential services, economic transition risks must be properly mapped and planned for. Likewise, with our social transition risks: the pace at which we transition, by what means we mitigate climate impacts as well as how we engage with the broader community (especially First Nations people) are all crucial. And our environmental transition risks must be thought through carefully, as we are on the precipice of a net-zero transition that will require the mining of rare earth minerals on a very large scale. Australia houses all of those in demand rare earth minerals.

Earlier I asked you to sit with the thought that our natural environment is at the core of the energy and climate transition, with the explicit implication that the environment be prioritised over economic and social priorities. 

Australia has a distinct advantage in advancing all three domains. Australia can leverage its position as a lead exporter of various metals and energy commodities that are required in the production of clean energy technologies and the transition to net-zero. However, this requires early action to achieve competitive costs for decarbonised energy.  While the timing of transition needs to align with our commitments under the Paris Agreement, it also needs to consider whether: 

1. We have the legislative and political support required for structural adjustments
2. Beyond technological capacity, whether we have the tools required to ensure a just and economically stable transition, one where a reliable and affordable energy supply is maintained and where our environmental values are elevated to the core of how we live, and how we do business.