Australia is poised to benefit from a massive influx of institutional ‘green’ capital after Saturday’s federal election saw Labor storm into power on a platform of stronger climate action.

At time of writing, the Australian Labor Party (ALP) was only two seats away from forming a majority government despite winning only 32% of the primary vote in an election that saw many voters shun the major parties for candidates promising more ambitious climate policies.

With climate change clearly a key concern, Prime Minister Anthony Albanese reaffirmed his commitment to the ALP’s Powering Australia decarbonisation policy both in his acceptance speech on Saturday and again this week as ‘Quad’ talks commenced in Japan.

“My government will take ambitious action on climate change and increase our support to partners in the region as they work to address it, including with new finance,” he said in a speech to Quad delegates, including US President Joe Biden.

“We will act in recognition that climate change is the main economic and security challenge for the island countries of the Pacific.”

While Mr Albanese’s ambitions to make Australia a “renewable energy superpower” have their detractors – including Nationals senator Matt Canavan – Quinbrook Infrastructure Partners co-founder David Scaysbrook said the plan will attract a wave of global investment capital.

“This is now a very significant market opportunity by global standards,” Mr Scaysbrook said following Saturday’s election.

“This is putting Australia back on the map in the eyes of global institutions looking at renewables and decarbonising industry.”

Mr Scaysbrook, whose company has invested more than US$2.5 billion of capital into low-carbon projects, noted Australia’s green energy capacity will need to triple in the next eight years to meet the targets the ALP has outlined in its policies.

This will create huge opportunities in the industrial sector, including decarbonising metal production, as well as pave the way for longer-term green export opportunities, he said.

Greens, Teal independents push for more ambitious targets

The ALP’s current climate policies would see greenhouse gas emissions reduced by 43% from 2005 levels by 2030.

That target is more ambitious than the Coalition’s 35% 2030 target, but analysis by non-profit think tank Climateworks Centre found it’s still not enough to meet the Paris Agreement goal to keep global warming “well below” 2C.

Importantly, it also falls short of the policies put forward by Teal independents, who want to reduce emissions by 60% by 2030, and the progressive left Greens party, who are targeting even greater reductions.

If the ALP is forced to form a minority government with these independent candidates, it’s likely the party will face immense pressure to further accelerate its action on climate change.

Even if the ALP forms a majority government, they may still face pressure to step up their climate plans in the Senate, where the Greens look likely to hold the balance of power.

This could include halving emissions from the industrial sector by 2030 (a goal the ALP have not themselves set a timeframe on) and further support for electric vehicles.

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Sources:

• The Conversation, The teals and Greens will turn up the heat on Labor’s climate policy. Here’s what to expect
• Australian Government, Australia’s long-term emissions reduction plan PDF
• Financial Review, Labor opens up ‘stunning’ green investment opportunity
• 7news, Aust ‘back on the map’ for green investors
• The Guardian, Senate may have a progressive majority as Greens and David Pocock make election gains