Today, business and finance groups have come together to endorse Australia's continued bipartisan commitment to the Paris Agreement goals and call for all levels of government to continue to support Australia's transition to a clean, competitive, resilient and prosperous net zero economy.
Acting to limit climate change and its impacts makes good financial sense. According to the world's central banks' mid-range estimate, global GDP would be 7 per cent higher in 2050 if emissions fall steadily to net zero, rather than if today's climate policies get no stronger. In fact, the difference could be even higher: actuaries suggest the range of credible estimates includes a global GDP benefit of 25 per cent by mid-century, and 50 per cent by 2090. Globally, the past ten years were the ten hottest on record. The physical effects of climate change are already evident here and around the world, underscoring the urgency of action.
Australia has made important progress on its climate response. Net zero targets are in place, emissions are falling, work is underway to assess and manage climate impacts, and business confidence is benefiting from a more cooperative approach across all levels of government.
Despite the ebbs and flows of global politics, Australia is in good company. Global investment in clean energy sources is now almost double that in fossil fuels, and renewable energy powered 91 per cent of new global electricity capacity in 2023. Over the past few years, almost all of our top trading partners have developed climate-related disclosure policies.
As the world transitions, Australia must harness our advantages, including our endowment of mineral and renewable energy resources, to avoid being left behind. Australia's business and finance sectors are pressing ahead with the task of managing climate risks, planning for new opportunities, and investing for the future. But the private sector cannot act alone.
Last year, global investment in the net zero transition reached US$2.1 trillion (AUD 3.3 trillion) - 20% more than Australia's GDP. As we compete globally for capital, Australia needs a credible net zero plan, an ambitious and deliverable 2035 Nationally Determined Contribution, and comprehensive policies to capture our share of this investment opportunity.
Australia has established solid policy foundations including the Safeguard Mechanism, climate-related disclosures, plans for adaptation and resilience, and policies to steadily and responsibly decarbonise our energy sources. Maintaining these policies - while evolving them to be as efficient and competitive as possible - will give business and finance the confidence to invest here for the long term, supporting a strong economy and a better future for all Australians.
Signatories:
Ai Group
Australian Sustainable Finance Institute
Chartered Accountants Australia and New Zealand
Clean Energy Investor Group
CPA Australia
Financial Services Council
Governance Institute of Australia
Institute of Public Accountants
Investor Group on Climate Change
Principles for Responsible Investment
Property Council of Australia
Responsible Investment Association of Australasia
