EXECUTIVE SUMMARY Australia needs to decarbonise, and infrastructure has a major role to play in driving us towards a zero-emission future. Energy contributes over half of Australia’s greenhouse gas emissions annually. Electricity generation accounts for a third of our emissions, and energy use from construction and other manufacturing industries make up another 20 per cent. Transport contributes a further 18 per cent, and even more emissions are generated through the construction and operation of community infrastructure like schools, hospitals, and waste facilities.1 Decarbonisation of infrastructure has progressed over the past decade, largely driven by the uptake of renewable energy. But in transport, emissions have been rising, with improvements in fuel efficiency and electrification of the vehicle fleet outweighed by rising demand. Similarly, progress in project-level construction and waste management methods have been lost in record levels of investment and growth. Australia prides itself on being a global leader in many areas, but with other parts of the world pushing forward in their transition strategies, national leadership in our decarbonisation journey has slipped to laggard status. To date, individual state and territory governments have been driving the nation’s decarbonisation agenda with commitments focused on differing state-level priorities, leading to piecemeal outcomes at the national level. There have been pockets of great progress in our transition, but other areas where we trail significantly. The sooner we fully commit to the challenge, the better. The environmental risks of inaction are immense. The risks of climate change, mounting for decades, were laid bare during the Black Summer bushfires in the summer of 2019-2020, and again in this year’s floods in South-East Queensland and New South Wales, with the health, safety and livelihoods
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Decarbonising Infrastructure
of millions of Australians seriously exposed. Severe weather events are becoming more intense and frequent, while Australia’s ecosystems – from the Great Barrier Reef to the Murray-Darling Basin – are rapidly deteriorating in the changing climate. So too are the risks to Australia’s economy. Reduced access to – or higher cost of – increasingly competitive, climate (or carbon) risk-averse global capital, the potential for carbon border levies and weaker demand for our exports would cost Australian jobs and filter through to increased costs of living. Failing to act decisively will shift an ever-greater burden to future generations, and increase the costs of action. But these risks and costs should not be our focus, as they have been over many years of futile political debate in Australia. Instead, our focus should be on the rewards and opportunities from this change, which are enormous. The time for political debate is behind us. It is time to get on with the job. No country in the world has more sun and wind than Australia, while our technology, finance and professional services expertise is globally sought after. In the energyhungry, rapidly growing region of the Asia-Pacific, Australia can transform this comparative advantage into an engine for growth, domestically and abroad. We have the chance to become the literal powerhouse of the Asia-Pacific. But this window of opportunity is closing. For the benefit of current and future generations of Australians, we need to act now to ensure this opportunity to build a lasting comparative advantage in energy does not pass us by. Of course, change is already underway in the sector. Infrastructure operators and owners have been taking steps to address climate risk and decarbonise their assets. The rise of Environmental, Social and Governance (ESG) factors has seen Australian infrastructure investors seek
