Racing to tackle the climate crisis

Harinder Sidhu discusses Australia’s big green economic transition.

Australia is tackling the economic challenge of climate change by embracing a wholesale transition of its economy. This green economic transition reflects the integration of domestic and international climate policy that has been achieved in recent decades. Because Australia recognises the urgency of the climate crisis, it accepts the need to play its part in meeting this global challenge by taking concrete action to transition its economy. The effective measures to reduce emissions that it has implemented have increased its credibility. Australia is listening to its partners in the Pacific when they insist that climate change is their greatest security challenge.

Climate policy is a topic very close to my heart, as are the efforts by Australia to drive forward real action on climate change. My biography says that I have devoted several years of my career to climate policy. I am aware this makes me somewhat unusual in diplomatic circles. But I have very much enjoyed my time working on climate change. Because, as far as public policy challenges go, it is about as wicked a problem as you can get — one that requires a truly multi-disciplinary solution. If we are serious about combatting climate change, we have to bring several disciplines together — science, economics, politics, law, business, security and social inclusion, to name a few. As a diplomat, who trained as a lawyer and economist, and who has since had a long career working across foreign, economic, security and domestic policy, the appeal is understandable.

Over my career, I have found that my climate policy experience has become a major diplomatic asset. Particularly as the impacts of climate change have become more acute, especially here in the Pacific, the ability to understand what goes into making climate policy has become more and more valuable as a subject for foreign policy. The reason for this is simple: when it comes to the climate, everything is connected. Emissions do not respect national boundaries, so whatever other countries do to raise or reduce emissions will affect you; and what you do at home matters for the planet.

To understand how Australia has gone about managing this balance, I will outline two aspects of our climate policy development over the past decade or two. First, how Australia is tackling the economic challenge of climate change by embracing a wholesale transition of our economy. This is a large topic, so I will only skim the surface, but I will try to give an idea of the scale and speed we are moving at across the ditch.

And second, I want to describe how we have come to integrate domestic and international climate policy in Australia. An integration that, I would argue, has made us more effective and trusted on the issue. My remarks will be informed by my experience as one of the senior executives who helped set up Australia’s first dedicated Department of Climate Change in the late 2000s.

Uncomfortable facts

Let me start with some facts. Australia is both a large emitter of greenhouse gases — the fourteenth largest in the world — and, at the same time, highly vulnerable to climate impacts. Because of our own lived experience, we recognise the urgency of the climate crisis. We accept that we need to play our part in meeting this global challenge. That is why we are taking real, concrete action to transition our economy at pace.

This is not just rhetoric. Across Australia — in every household, every business, every school, every workplace — an economy-wide transition is underway. Australia has not just committed, but we have legislated ambitious emissions reduction targets. We will cut emissions by 43 per cent below 2005 levels by 2030 and reach net zero by 2050. We are on track: as at November 2024, emissions have fallen by 28.2 per cent below 2005 levels.

Energy production is the largest contributor to Australia’s greenhouse gas emissions (32.6 per cent, according to the Commonwealth Scientific and Industrial Research Organisation). So it is only natural that this is where we are focusing our efforts. We are transforming Australia’s electricity supply to harness the power of renewables, with an ambition to see the portion of renewable energy in our grid reach 82 per cent by 2030, a number that is very close to the proportion of renewables in New Zealand’s electricity grid (87 per cent).

This is a big deal. The importance that fossil fuels have traditionally had in the Australian economy is well-known. Less than twenty years ago, some 80 per cent of Australia’s electricity came from coal or fossil-fuel powered generation. Naturally, a transition as ambitious as this will not happen overnight. But we are taking it seriously. De-carbonising our economy will be challenging, but we are absolutely committed to achieving it. The pace here has been staggering — the total capacity of Australia’s wind and solar assets is already roughly 40 per cent greater than it was just three years ago. And last year, the number of installed rooftop solar systems across the country reached 4 million. That is almost 25 gigawatts of capacity, more than that of Australia’s entire current fleet of coal-fired generators. And while total renewable electricity generation now stands at around 40 per cent, we have seen occasions over the past couple of years where renewables have supplied more than 70 per cent of electricity to the grid.

On industrial emissions, we have made reforms to what is called our ‘Safeguards Mechanism’, which requires our biggest emitters to reduce net emissions by 4.9 per cent a year. This will eliminate over 200 million tonnes of greenhouse gas emissions by 2030, equivalent to taking two-thirds of Australia’s cars off our roads.

Transition preparations

Beyond our 2030 target, we are also preparing our economy for the transition to net zero by 2050. We have shifted the way we think about the net zero transition. Rather than a burden to shoulder, we now view it as an economic opportunity we must position ourselves to seize. To do this, the Australian government has developed a plan to invest A$22.7 billion over the next decade to support programmes that will maximise the economic and industrial benefits of the move to net zero.

We are focusing our investments in sectors where Australia has a comparative advantage and those that contribute to de-carbonisation or supply chain resilience. These include renewable hydrogen production, green metals, critical minerals processing and clean energy technology, including to develop battery and solar panel industries. Not only is this good climate policy, it will also build our energy and economic resilience in the changing global and strategic landscape. This is all about doing our part. We know that all countries must be ambitious and move at speed if we want to tackle the climate crisis.

Doing our bit at home has helped us demonstrate our seriousness about climate change beyond our shores. On the foreign policy front, we are listening to our partners in the Pacific when they tell us that climate change is their greatest security challenge. Australia is working to ensure a regional balance that is safe, prosperous and stable for all — and it is essential that climate change be part of this effort. That is why we are deploying high-quality climate finance across the region to support the priorities of our partners. We expect to deliver $3 billion towards global climate financing efforts over 2020–25. And our foundational contribution of $100 million to the Pacific Resilience Facility shows we are backing Pacific leadership on climate adaptation.

Inherent connection

The Pacific is an important, but only one example. There is an inherent connection between what you do at home and your international climate policy. And that is where, from my perspective, a small point of difference has been a game changer for Australia. When we set up our inaugural Department of Climate Change in 2008 — a department that I was one of the original senior executive leaders of — we made a deliberate decision. Rather than leave the responsibility for international climate policy and negotiations with our Department of Foreign Affairs and Trade, we chose to bring these international specialists across to the new department, to work side by side with our domestic and technical policy specialists. In short, to integrate our domestic and international policies from their inception.

It was an idea we saw working incredibly well in the United Kingdom, which had also at that time just set up its own Ministry of Climate Change. This might sound like the sort of structural technicality that only somebody who has been a public servant for nearly 40 years could get excited about. But it made the world of difference. It allowed all parts of our system to work together in a mutually reinforcing way. This has meant that we have been represented at the UN Framework Convention on Climate Change negotiating table not just by our diplomats, but by climate change experts and economists from the same agency working towards the same goals — tying together the many strands in climate policy. This means we design our do- mestic policies with an eye to what we need to commit to internationally. This awareness of international expectation has driven us to be more ambitious domestically.

On the flip side, our diplomats and negotiators are deeply connected to the practicalities and technicalities of climate policy-making. They are the same people who have to take responsibility for delivery on the things they agree to internationally. It is not something they can then pass on to someone else to do. The bottom line is, we do not make international commitments that we know we cannot deliver. And it is why we are now on track to deliver on our ambitious commitments at home and internationally for 2030. This has been a recipe for building credibility and integrity in our climate policy both at home and abroad.

Strong foundation

So where does this leave us, as we look ahead to the future trajectory of Australia’s climate policy? Well, of course, the transition underway in Australia leaves us with a strong foundation on which to build. But what is obvious is that no country can solve climate change — or even come close — alone. We need partners. And that is why, for Australia, climate is now a critical component of all our major international relationships. This includes with New Zealand.

In 2023 we established an annual 2+2 dialogue with climate and finance ministers coming together on both sides of the Tasman. This dialogue — which seeks to closely integrate our economic and climate policy — is the first of the kind in the world. And it already has a number of runs on the board. Through the dialogue, we have established a net zero working group to support de-carbonising public services and sustainable procurement. We have pooled our efforts to stimulate and secure supply of electric and zero emissions vehicles. And we are co- ordinating our support for the Pacific, directed towards regional priorities, including climate adaptation and the amplification of Pacific voices in international climate and energy discussions.

Speaking of amplifying Pacific voices, Australia, of course, remains strongly committed to our bid to host COP31 in partnership with the Pacific. We want to deliver a COP with our Pacific partners that brings profile to the climate challenges in our region, accelerates global climate action and raises the voices of first nations people. The bid has been warmly supported by Pacific leaders, and we are continuing discussions with the hope of coming to a resolution soon.

The bottom line is this: Australia is not sitting still in the race to tackle the climate crisis. It is a race we want to win — not just because it is good for the climate, but because we know that if we get it right, it will be good for the future of our economy, for our security and for our region. Our planet depends on it.

HE Harinder Sidhu AM was Australia’s high commissioner to New Zealand until March. This article is the edited text of the keynote address she gave to the NZIIA Wellington branch’s Environmental Diplomacy Symposium at Zealandia, Wellington on 12 March 2025, a few days before her departure.