Climate Policy in Australia

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Although other national governments, including Australia's major trading partners, have pledged to move towards net zero emissions by 2050 or 2060, Australia's existing climate policy has been more aligned with the United States’ policy under the Trump administration.

Although other national governments, including Australia’s major trading partners, have pledged to move towards net zero emissions by 2050 or 2060, Australia’s existing climate policy has been more aligned with the United States' policy under the Trump administration. The core viewpoint is that penalizing energy-intensive industries, particularly the coal industry, will significantly hit the country’s economy and cause the loss of thousands of jobs. The 2020 Presidential election result of the United States has clearly caused deep concerns in the ranks of the Australian Federal Government as Joe Biden will undertake a very different approach to address climate change and has promised to strive for net zero emissions by 2050.

Climate policy has been a very divisive issue in Australian Federal Politics. It has not only impacted election results but also cost leaders their jobs. As a result, there has been a much greater reluctance to commit to a clear policy to tackle climate change. Till today, disagreements exist within major parties. The current Federal Government's policy is to cut carbon emissions to 26%-28% below 2005 levels by 2030. People criticised this target as being unambitious, but the Federal Government remains defiant. In reality, with recent policy settings, Australia is unlikely to achieve this goal without claiming Kyoto carryover credits.

State governments and the private sectors are however, moving towards a "greener" direction. State governments in Australia are more ambitious. All of them have committed to net zero emission by 2050. Many states have increased renewable projects significantly over the past few years. Large organisations have also ceased to invest in polluting assets and committed to net zero emission targets.

Despite these local initiatives, the Australian Federal Government was until recently encouraging private investments in new coal-fired generation plants, only to find out there was no interest. This incident is a good example to illustrate that Australia may transition to net zero emissions in a slower and less orderly manner due to the lack of a supportive climate policy at the Federal level. Changes will happen, but at a different pace in each state. Many countries have started to reduce thermal coal imports from Australia to lower their overall carbon emissions. They may also choose to impose penalties on products produced by energy-intensive industries. Will this external pressure cause the Australian Federal Government to adjust its climate change policy? The United States is the most important ally of Australia. It will be interesting to see whether the Biden Administration will prompt the Australian Federal Government to set net zero emissions targets.


Martin Shippen