Modeling from the Investor Group on Climate Change (IGCC) suggests Australia will need to cut emissions by 75% by 2035 if it hopes to stay within the bounds of the Paris Agreement’s 1.5 degree target.
This is far more ambitious than the country’s current target of 43% by 2030, which was recently enforced by legislation.
This goal is the first of three policy recommendations that form part of the IGGC’s policy priorities towards 2025; it’s captured in a report called, Making the Transition Happen. The IGCC is a network of Australia’s largest and most climate-aware institutional investors.
The IGCC CEO, Rebecca Mikula Wright says, “Institutional investors have the capital to finance a clean energy economy. .”
“Many governments, businesses and investors have already committed to achieving net zero emissions. The biggest barrier to reaching these goals remains lack of stable policy that supports investment in zero carbon technologies, goods, and services.”
The second key recommendation is to establish a national climate change legislative framework, to drive stable climate governance to promote investor confidence.
This hinges on a long-term legislative framework that recognise the economics risks of climate change, while also leveraging the many opportunities for investment and business growth in addressing the challenges of climate change.
This is vital to drive confidence and clarity in the pathway of rules and regulations, with transparency allowing investors to more accurately price risk, and businesses to make capital expenditures.
The third recommendation, calls for a just and equitable transition through the establishment of national and regional transition authorities.
It recognises the disruption and change that the Australian economy must go through, and highlights the importance of investment strategy and capital allocation recognising the risks implicit in these changes.
Through advocacy and partnerships, through local and regional dialogues, and through derisking investments by partnering with governments; the opportunities can be shared and the challenges managed more evenly.
“Climate change will be a crucial factor in beneficiaries’ long term financial returns, and the highest net economic benefit is limiting climate change damages from warming above 1.5°.” Rebecca Mikula Wright says