Australia and New Zealand now risk falling behind in the global race to attract private capital investment, an investor group has warned, as US President Joe Biden has committed his country to tighter emissions reductions by 2030.
Joe Biden has declared the US will aim to reduce its greenhouse gas emissions by 50-52 per cent from 2005 levels by the end of the decade, in addition to its goal of reaching net zero by 2050.
The new target is one of the strongest emissions commitments in the G20, according to analysis by the Investor Group on Climate Change, only falling behind the UK and the EU nations.
Australia and New Zealand’s current 2030 goals are now weak in comparison to these key trading partners, the IGCC said, although New Zealand is reviewing its end-of-decade goal.
Australia currently is aiming to reduce emissions by 26-28 per cent below 2005 levels by 2030.
The target is estimated to be around 30 per cent lower than the average emissions reductions of its international peers.
Meanwhile New Zealand has committed to a 30 per cent reduction below 2005 levels by 2030, with the ultimate goal of reaching net zero by 2050.
IGCC chief executive Emma Herd commented the new US target is an “enormous market signal”.
“These targets are signals to global capital markets about how seriously a nation is taking the net zero transition and how intent it is on creating the enormous investment opportunities in new clean industries and infrastructure on offer,” Ms Herd said.
“There are trillions of dollars in private capital that investors are looking to commit to the transition to net zero emissions. Nations who are not keeping pace with the comparative global benchmark for ambition will be at an increasing competitive disadvantage in global capital markets.”
Further, many investors and businesses are already moving ahead of governments to set their own emissions goals, Ms Herd added.
The IGCC has ruled that Australia is not yet on track to achieve the target it committed to in 2015, alongside South Korea, Mexico and the US. Canada and Argentina are also off track, but have new policies to achieve 2030 targets.
Australia has also not committed to a net zero by 2050 target and it has not committed to updating its 2030 target in line with the Paris Agreement.
It is estimated that Australia’s per capita emissions would be third-highest among the G20 by 2030, following Saudi Arabia and Russia.
However, most countries’ 2030 targets have been found to be inconsistent with a fair contribution towards meeting the Paris Agreement.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].