The Australian government is urging businesses to reach net-zero by 2050, but is holding off on its own commitment

The Australian government is urging businesses to reach net-zero by 2050, but is holding off on its own commitment
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  • Australian businesses must not be on the “wrong side” of global emissions targets, Treasurer Josh Frydenberg has warned.
  • In an address to industry leaders on Friday, Frydenberg will say global investors may shy from Australia if they perceive the nation as a big-time carbon emitter.
  • But Frydenberg is unlikely to announce a government pledge to net zero emissions by 2050 during the talk.
  • Visit Business Insider Australia’s homepage for more stories.

Australian businesses should chase net zero emissions by 2050 or risk losing billions in foreign investment, Treasurer Josh Frydenberg will tell industry leaders Friday, in a speech unlikely to contain any new climate commitments from the government itself.

In a Friday address to Australian Industry Group members, Frydenberg will outline the financial risks which businesses, banks, and households could face if Australia’s climate ambitions do not match those seen worldwide.

With governments across the globe embracing the devastating reality of continual carbon emissions, international markets are seeking to limit their investment in carbon-heavy industries while seeking green opportunities.

Australia could lose access to enormous levels of foreign capital if international investors doubt the nation’s green credentials, Frydenberg will say.

“Investors are assessing what they consider to be risk, they are assessing what they consider to be good value, and this matters to Australia because we rely so heavily on foreign investment,” the Treasurer told radio station 2GB Friday morning.

“There’s about $4 trillion of foreign investment in Australia. About half of our government bonds are bought by foreign investors, and about a fifth of the lending and the borrowing of the banks is actually financed from offshore.

“And that’s from everything from household mortgages to small business loans. So we don’t want to be on the wrong side of this. We don’t want to be disadvantaged by this movement in financial markets”.

His statement echoes fears from climate-focused Australian investors, who say local industries will lose access to global capital and fall behind unless the nation commits to more ambitious climate targets.

The Australian Industry Group last month revealed its own warning about European ‘carbon border adjustments mechanisms’, which could see exported Australian goods subjected to extra costs if the nation does not introduce its own carbon pricing system.

But Frydenberg stopped short of confirming any new emission pricing systems.

“No tax,” he said. “Technology not taxes.”

He also avoided confirming any new net zero by 2050 commitment from the federal government, little over a month before the landmark COP26 climate conference in Glasgow.

Any push to confirm that renewed emissions target has been slowed by Frydenberg’s parliamentary allies, the Nationals, whose party room has long been split on the commitment.

Nationals leader and Deputy Prime Minister Barnaby Joyce said the matter will be subject to a party room decision ahead of the Scottish conference.

“We haven’t taken that decision formally within the Coalition but obviously we’re making good progress on our internal discussions,” Frydenberg told ‘Sunrise’.

In an attempt to assuage fears of investment dollars being yanked from Australia’s resources and agriculture industries — fields which the National Party claims to champion — Frydenberg said continue investment in “brown” industries could help power the green transition.

“I think there’s real opportunities here for our agriculture sector, for our mining sector, which are both world-class sectors,” he told 2GB.

Referring to the jobs likely to be lost in the global race to a green economy, Frydenberg will today say continued investment in those fields will power a just transition.

“If you support the objective of net zero, do not walk away from the very sectors of our economy that will need investment to successfully transition,” Frydenberg will say, according to an excerpt obtained by Guardian Australia.