Three years ago, Australia was on the verge of an election dominated by a wave of independent MPs who promised a climate change reckoning. But climate talk seems to have taken a backseat in the current campaign ahead of the May 3 national poll.
For the Bloomberg Australia Podcast, host Rebecca Jones and Bloomberg’s David Stringer break down the energy policies being pushed by the major parties this election campaign.
Find more episodes from the Bloomberg Australia Podcast at https://www.bloomberg.com/podcasts/series/bloomberg-australia
Hi, it's acua. Australia's twenty twenty two election was labeled the Climate Election, and that resulted in a big shift in the country's politics. With only a three year parliamentary cycle, Australia will once again go to the polls on May third. This time, Donald Trump's shadow looms large over whatever happens. So will it be another climate election this year? Bloomberg Green's editor in Asia, David Stringer, has the answer in this episode for our sister podcast, Bloomberg Australia. I wanted to share it with zero listeners. Enjoy it and we'll be back with a regular episode later this week.
Three years ago, Australia was on the verge of an election dominated by a wave of independent mpaigns who promised a climate change reckoning. We're heading to the polls again in just over two weeks, so where are all the climate warriors?
Climate change is having an impact on our weather patterns.
If the renewables are so much cheaper as the Prime Minister keeps telling you, why has he broken his promise of a two hunred and seventy five dollars a year cut to your electricity built?
Here's the lowdown on nuclear power. It will add twelve hundred dollars to your power built, it will take decades to build. It will block cheaper renewable energy.
Hello. I'm Rebecca Jones and welcome to the Bloomberg Australia Podcast. This week we're taking a look at how climate issues are featuring in the federal election campaign. Here with me is David Stringer, who heads up climate and ESG coverage in Asia for Bloomberg News. He also has the thrilling privilege of sharing a pod with me in the Melbourne Bureau for the better part of the last decade. So it's safe to suggest that this is a topic that we have discussed at length over the years, and it felt time right to let you all eavesdrop in on something that we at least can't stop talking about. David, Hello, Thank you for joining me.
Thanks a pleasure, pleasure to be here.
So Australian elections have seen divisive arguments in the past two decades over climate policy, and it's often been an area of clear difference between the main parties at a time of pressing concerns among voters over a raft of other things, from the cost of living to the affordability of housing to the impact of the US China trade war. Is climate change of factor in this campaign?
I think it's quite clear, having observed the campaign over the past few weeks, that it's quite clearly quite different to elections past. If we think about more recent elections, the climate debate has often been incredibly noisy. This time around, it's still there as an issue, but it's more of a background hum. It's simply not getting the attention as an issue that's been in the past.
That's understandable. I mean, if we think back to twenty twenty.
Two, Australia was just sort of getting over and still was quite clear in people's minds that the impact that those devastating twenty nineteen twenty twenty bushfires.
Had had, right yeah, really brought.
Home some of the potential some of the consequences of a lack of action on climate change from the then government. We saw some of that feed through and certainly benefits some of those Teal candidate. They campaigned on a platform of increased climate action. They were very critical of the then Scott Morrison government's timid approach towards reducing emissions. If we think even further back twenty thirteen. You know, one of the first national elections that I saw here in Australia. Back then, debate was dominated by the carbon pricing mechanism carbon taxed by another name, in effect brought Tony Abbott to power. He campaigned incredibly hard on repealing that mechanism one office and subsequently did scrap it. So we've been through a period where climate has been a real driver of policy and debate. It's seen party leaders ours did. It's been a determinate elections this time not so much so. I guess the question I've been asking myself is why is that?
It has been quite a busy decade, hasn't it? I mean, who can forget that iconic image of former Prime Minister Scott Morrison holding the chunk of thermal coal in Parliament?
This is coal. Don't be fright, scare Que Treasurer knows the.
Rule of props a useful place. I think that we should start this discussion at is what is on the table from both of our two major parties going into the twenty twenty five elections. David, can you step us through the key differences in energy policy this time? Is it as simple as nuclear versus renewables for example.
Clearly there are differences between the two major parties, but I'm going to be a little bit contrarian and I'm going to point to something where there is an area of concer census. Both major parties are going into this campaign saying Australia needs to hit net zero emissions by twenty fifty. There's no debate over the end point. There's no confusion over the goal. Where there are differences is how do we get there how fast, at what cost, you know, and at what cost to communities, not just at what financial cost. If we look at Labour's platform, you know they did bring in a raft of measures in their first term. They legislated a more ambitious target for emissions reductions that's forty three percent below two thousand and five levels by twenty thirty and they'll continue to support the.
Adoption of large scale renewables.
They've made a pledge for around about two billion Australian dollars extra in funding for the Clean Energy Finance Corp that sort of seeds renewables and green technologies. There's a program to subsidize household batteries that's intended to help extend that solar boom we've seen in Australia, you know, and there are some policies around this ambition to bring green manufacturing jobs away from places like China and here in Australia. It's pretty much steady as she goes in terms of their policy this time, the Liberal Party, we haven't heard a huge amount, but what we have is very interesting and chiefly among it, as you mentioned, the idea of bringing nuclear power to Australia.
Yes, tell me about that.
The detail is something clearly that you know, we still want to see more of and still needs to be worked out. But you know, in simple terms, you know, what the Liberal Party have suggested is having seven locations across Australia that for the first time ever, would provide nuclear power generation. You know, that would take a number of steps. Nuclear power is illegal in lots of parts of the country. It can take a long time and is incredibly expensive. How those things are reconciled we're yet to fully understand. But it is a key policy and a key point of difference between the two parties.
So there is a general alignment on some metrics, but in others they do vary quite widely. I would like to zoom in on some of the key seats that we're looking at this election. One that comes to my mind is the electorate of Hunter, which of course has coal as its major industry. Now, David, you and I both know working in the bureaus here, that we've had other regional polls occur in recent times has been all. There's been one in Queensland, there's also been one in WA. What do the results in those states tell us about the climate outlook nationally for Australia.
You mentioned the Hunter Valley and of course that lump of coal you referenced before that was held by Scott Morrison in twenty seventeen from the Hunter Valley and it remains a really crucial emblem, you know, and symbol in this election, because how do you handle the transition of those kinds of communities from traditional industries in this case coal.
To future industries.
The outlook is uncertain, so it would be really interesting to see what happens in New South Wales. Of the recent regional elections we've had, the one that's really interested me is in Queensland, where we saw the incumbent Labor government replaced by a new Liberal National Coalition government very quickly, we've seen some big and significant decisions on climate and energy policy. The government there has announced a sort of five year energy plan that it's working on. Also, it's already put a couple one hundred million dollars into the maintenance and upgrades of existing coal plants. It signaled that it sees a longer life for the coal fired power capacity in Queensland. It expects it to continue for far longer than expected. What's most interesting is if that's the kind of policy that we could see, if we see that result replicated national.
And what about WA Because I think people outside of Australia when they're thinking about the resource industry within Australia, they think of the Pilborough right the great open expansive dessert happened in their recent regional poll.
I mean in Western Australia and it's a place I've been very fortunate to visit a lot during my career at Bloomberg and spend a lot of time luckily in the Pilborough and there's a few dynamics going on there. Obviously, we saw the Labor government return to office, but was that an entirely positive step? On climate policy. I think that's debatable. One of the big criticisms nationally of Antony Albernesi's Labor government has been that there've been too weak on implementing environmental policies. They came into the last election, they campaigned in the last election with promises to overhaul environmental legislation, to introduce a national environmental agency. What we've seen in Western Australia is a lot of pushback against any new burdens of regulation, not only from the resources industry, but absolutely from companies developing new minds, new gas export plans, even companies who are looking to establish new green manufacturing sites. What they don't want is an additional burden of environmental legislation. And what we saw in that Western Australia poll very successfully lobbied the local the WA labor government to you not to back new restrictions.
So yeah, quite.
Interesting in both cases to see how that could inform the national debate and national policy.
And certainly what happens in the Hunter electorate. You know in a couple of weeks time now you briefly touched on targets earlier, David, I want to pick up on that a little bit. Now, Australia is regarded as you know, somewhat of a global tess case for the energy transition, and it does in turn attract investment and attention from all over the place. Right, what is the actual status of Australia's energy transition? Are we actually on track to hit targets to reduce greenhouse gases?
It's one of those scenarios where you can probably make an argument either way, So I think the truth is it's debatable.
So whremissions in the year to.
Last March were They were about twenty eight point two percent below June two thousand and five levels. That's the level that we're looking at. That's the baseline for the targets that the existing government have outlined, and again that is to make a forty three percent reduction by twenty thirty, so still somewhere to go. The pace at which reductions are being made is you know, charitably about on track. I think realistically probably a little too slow. And there are also other debates around what's included and what's excluded when you come to countermissions. You know, if we think about the policy settings, there's a there's a nonprofit globally that sort of grades countries climate policies and their targets climate Action Tracker, and it currently sees Australia's policy settings and Australia's targets as insufficient. The one area that it identifies chiefly is there's a lot of reliance on future technologies that are yet to have been mercialized and developed, and not a lot of policy on phasing out things like coll exports, gas exports, the thing that are huge drivers of export earnings.
So it's a little bit chicken and egg like, we've got to have the technology to do it, and we've got to get the technology first and agree how we're going to do that and also finance it. I think one thing recently that's also been quite profound is the responsibility for domestic policy most certainly, but also Australia's place within the region. We had some quite pointed comments from the President of Palao just this month on Australia as a sort of a big brother of the Pacific, wanting it to take more of a leadership role of this topic in the region. Let's take a quick listen.
We are part of the Pacific family. We need to work together to solve problems and it's not a joke. Climate change is a reality and it's something that we face every day and we need Australia support and we're ready to work with whoever is in government to attack all these problems. And it's so important that the Australian people understand that it's their leadership should take a leadership role in the Pacific and work with us to meet the challenges that we have ahead of us.
David, it is quite a tense time in the Pacific, with China fighting for influence in the region. Is Australia doing enough fun climate change to support its specific neighbors.
I think if you ask and we heard, of course they're from power. If you ask a lot of Pacific nations, the answer would be no. But then if we think back to the time of the last election, at that moment, Australia was regarded on the sort of international scene and in terms of climate diplomacy as a complete outlier. Australia had seeded, you know, a lot of its influence on the global stage, and you know, the government has spent quite a lot of time trying to rebuild that trust and trying to really reassert itself in just the global process of supporting the International Approach to Climate Act. But you know, the Pacific nations clearly are in a tough spot and I think what we saw at the most recent Global Climate talks in Azerbaijan last year was a continued sense of disappointment. Developing countries came into that meeting asking rich countries for you know, a commitment to direct about a trillion dollars you know, in climate financing to the emerging world. What they got was a commitment for three hundred billion, so a lot less than expected. Australia is one of those developed nations that is being asked to do more and so you know, quite rightly, I think the Pacific, not only Australia, but Australia because of its role in the region, they are asking Australia to step up.
When we come back, let's lens in and consider the almighty dollar, how our investors in renewables approaching the election and what do they want to see from Messrs Albanzi and Dutton. You're listening to the Bloomberg Australia Podcast and welcome back to the Bloomberg Australia Podcast. You're here with me Rebecca Jones, and I'm talking all things climate with Bloomberg's APEC, head of ESG and green coverage, my mate David Stringer. David, let's talk about money. Has the ALP seen an increase in investments in renewables over the last three years and how are those investors approaching this election?
Well, there's nothing I like better than pulling up charts of energy transition investment, you know, and taking a look at what's actually happening on the ground, where is money flowing. And I think if you ask most voters, I think their assumption would be that under an Albanzy government, what we would have seen is a continued flow of more investment. In truth, that's not the case. If we look at total energy.
Transition investment, so that's the power system.
That's clean transport, you know, that's clean agriculture, that actually fell about five percent last year to just less than twenty three billion.
That's even though what we.
Are seeing and what we did see last year is a sort of rebound in investment into renewables, into clean energy. We also saw a little bit more spending on electrified transport, but in total it fell again. And if we think the total spending that our colleagues at Bloomberg NF Research is they forecast that between now and twenty fifty, you know, Australia is going to need to spend about two point four trillion US dollars just on energy alone. How quickly that investment ramps up is really crucial.
I want to talk to you about a national obsession. Well, I mean it certainly to me, it feels like it's a bit of an obsession, and that is the adoption of solar, something that's done quite well. How is that transfer forming the country's energy system? And is it a trend that we think will continue in the same fashion.
I think if you talk to experts on energy markets, it's hard. It's hard to overstate how transformative the adoption of solar in Australia has been.
If we think there's been enough.
Solar installed on rooftops across Australia to really account for one in every three house, astonishing right. And what's really interesting is we're not necessarily talking about urban homes in places like Melbourne, Sydney or Brisbane. To a large extent, these are solar panels that have been installed in rural community and in large numbers, So how's that changed the energy signel quite radically. What it means is that right now there's often an excess of power being generated during the middle of the day the suns that it's height when we're getting the most radiation on those panels, And in a sense, the solar sector in Australia has kind of been a victim of its own success. And in fact, a colleagues that BNF their analysis tells them is that for residential solace, that we think adoption peaked in twenty twenty one and as being in a slow decline since then because you know, rebates and incentives have come off, We've seen, you know, the value of sending excess power to the grid become lower and lower because basically, how is worthless in the middle of the day now because there is so much solar so little demand, that the power itself becomes cheaper. One of the proposals we've heard in this campaign from Labor is a policy to subsidize household battery. They want to see more people pair up their rooftop solar systems with storage batteries that allows people to use it when it's needed. It sees less wastage, and you know that's a potential policy that could help to some degree extend the solar.
So I was right. Then solar panels are everywhere and we are obsessed with them. It is like a really well known manifestation of renewable energy, right. You know, you go to Waikia, you see the solar panels on the roof. Go and have a look at my parents beach house. It's covered in them. David, what when we're thinking about investments in renewables, certainly extending beyond solar panels, what other things are we're needing investment in, for one, And what are some of the proposals that both of the parties are putting forward in this campaign?
Well quite, I mean, so if we think about rooftop solar, you know, as a sector that added about three gigawatts last year, what's that. Well, that's sort of roughly equivalent about three coal fired power stations.
That's not enough.
What we're really focused on is large scale renewables projects, things with the sort of size and scale that can actually help Australia replace those big fossil fuel sites. And that requires a lot of investment, clearly, you know, and as we said, it's been a very complex picture in the past few years under the Albanese government. If we zero in on renewable energy investment, you can really see, even looking at a chart, you can see when people talk about investor uncertainty and people being worried about policy change, it's there in the sort of it's there in a bar chart. You can see, you know, you can see investment yo yoing from year to year. And so what we had was between sort of twenty eighteen and twenty twenty one, investment in these large scale renewable projects really created, rebounded and then actually fell sharply again. Twenty twenty three, rebounded last year, and a lot of that is down to a policy the Labor government brought in, the Capacity Investment Scheme. Now it sounds complicated, but you know, put very simply kind of.
What it does.
It sets a flaw a revenue floor for a renewable project. The project earns less than expected, the government meets some of the differentrans and similarly, there's like a revenue ceiling. If it does better than expected, you're going to pay some of that access, right, got it. It helps investors have certainty when they're thinking about these multi billion dollar investment. What's interesting is the Liberal parties plan for that scheme is to add natural gas. That's opposed by labor who say that will deter the purpose of the scheme, which is to encourage private investment in wind, in solar, in renewable and its so yeah, rooftops we're seeing potentially start to peter out and sortlatter. What the real focus is, what's the direction of those really big large scale renewal I.
Want to ask you about another thing that Australians love and that we think about all the time, and that is driving our cars. Power isn't the only sector crucial to Australia's decarbonization, obviously, and we have moved on ILAC to think from Scott Morrison's famous claim that electric vehicles are going to end the week. But is there a consensus among the parties around phasing out gas guzzling cars and utes. What does the data tell us?
You know, Australia is still seen as something of a laggard on adoption of electric vehicles, which kind of surprises me in a way because and you know this as well, that any time we're out on a street here in Melbourne, the number of Tesla's increasingly, the number of bid cars you know that we see, never mind all of the other myriad of electric models that are available now that anecdotal evidence would seem to suggest that things are really taking off. What the numbers tell us is that they're not. I think they were just over around about one hundred and fourteen thousand new electric vehicles sold last year compared to about one hundred thousand in twenty twenty three, so an increase, but not the kinds of dramatic jumps we're seeing. Another jurisdiction.
Part of that is policy, and what.
We're seeing in this election, although it hasn't featured massively, what we've seen from the Liberal Party is an indication that they would effectively sort of weaken the New Vehicle Efficiency that's a set of policies that helps encourage adoption of lower missions, cleaner, more efficient vehicle. The concern from advocates of evs is that by weakening that kind of policy you effectively open the Australian market up for foreign automakers to dump their dirtier, less efficient cars in this march, rather than foster courage.
Or evs to be sold so we have two major parties aligned on the fact that we need to move to net zero, but with different ideas on how to get there. Our position in the Pacific, as let's face it, the biggest player is under even more scrutiny from our smaller neighbors, and the way we get investment in renewables is something both parties disagree on. The Libs and on one side want to include natural gas in the investment scheme. Labour says you are missing the point. So who said climate wasn't on the agenda? David Stringer, thanks for your time today.
Thanks great to be here back.
And thank you for listening to the Bloomberg Australia podcast. I'm Rebecca Jones. This episode was recorded on the traditional lands of the Wilwandery people of the Coula Nation. It was produced by Paul Allen and edited by Ainsley Chandler and Chris Burke. Don't forget to follow and review the show wherever you get your podcasts, and sign up for Bloomberg's free daily Newssetter Australia Briefing. Go to Bloomberg dot com to subscribe.