The Australian government must legislate a 2050 net zero emissions target to avoid missing out on substantial global investment opportunities, according to HESTA CEO Debby Blakey.
In a speech to the Global Race to Zero Summit, Ms Blakey said that the government must clearly lay out a plan for net zero to avoid being left behind as trillions of dollars flow into net zero investments.
“Those countries and companies that set the right targets and clear strategies to achieve them will be at the front of the investment capital queue,” said Ms Blakey.
“Global capital is sending clear signals that Australia is only just starting to heed. The costs of being a global laggard on climate change are only going to grow as the pressure for action increases.”
The Climate Change Authority has indicated that reducing emissions is key to Australia’s prosperity and economic growth in light of a growing competitiveness risk.
“To be competitive as the world decarbonises, we need to lower emissions in all sectors of the economy as quickly as we can,” Climate Change Authority CEO Brad Archer said.
Earlier this month, the Association of Superannuation Funds of Australia also warned that the super industry “stands to lose billions of dollars in investment returns” without a net zero commitment in place.
Additionally, the Investor Group on Climate Change (IGCC) has estimated that Australia could unlock $131 billion of new investment and job opportunities this decade by adopting stronger climate policies.
“Investment capital goes where there is certainty and stability, and Australia’s ad hoc policy approach is not helping to encourage investment nor foster innovation,” Ms Blakey said.
“We want to invest more in Australian renewables, but the current policy framework means for every $1 we commit to Australian renewable infrastructure assets, we have $3 invested overseas.”
Australia was found to be among the least attractive G20 countries for green investment in a recent report by the Asia Investor Group on Climate Change, Ceres and the IGCC.
Less than 2 per cent of Australia’s spending on the economic recovery from the pandemic was directed towards green initiatives according to the report.
“Australia has much to gain from taking a leadership position in the global push to decarbonise,” said Ms Blakey.
“Investors and business aren’t waiting to map their course to net zero. If we’re to cut emissions in time to save us from the worst of climate change, the time is now for government and policy makers to catch up.”
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.