Bloomberg Australia: Will it be a climate election yet again?
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Hi, it's Akshat. Australia's 2022 election was labelled the climate election and that resulted in a big shift in the country's politics. With only a three-year parliamentary cycle, Australia will once again go to the polls on May 3rd. This time, Donald Trump's shadow looms large over whatever happens. So, will it be another climate election this year?

Bloomberg Greens editor in Asia, David Stringer, has the answer in this episode for our sister podcast, Bloomberg Australia. I wanted to share it with zero listeners. Enjoy it and we'll be back with a regular episode later this week. Three years ago, Australia was on the verge of an election dominated by a wave of independent MPs who promised a climate change reckoning. We're heading to the polls again in just over two weeks.

So where are all the climate warriors? Climate change is having an impact on our weather patterns. If the renewables are so much cheaper, as the Prime Minister keeps telling you, why has he broken his promise of a $275 a year cut to your electricity bill? Here's the lowdown on nuclear power. It will add $1,200 to your power bills. It will take decades to build. It will block cheaper renewable energy.

Hello, I'm Rebecca Jones and welcome to the Bloomberg Australia podcast. This week we're taking a look at how climate issues are featuring in the federal election campaign.

Here with me is David Stringer, who heads up climate and ESG coverage in Asia for Bloomberg News. He also has the thrilling privilege of sharing a pod with me in the Melbourne Bureau for the better part of the last decade. So it's safe to suggest that this is a topic that we have discussed at length over the years, and it felt only right to let you all eavesdrop in on something that we, at least, can't stop talking about. David, hello. Thank you for joining me. Thanks. A pleasure. Pleasure to be here.

So David, Australian elections have seen divisive arguments in the past two decades over climate policy and it's often been an area of clear difference between the main parties. At a time of pressing concerns among voters over a raft of other things, from the cost of living, to the affordability of housing, to the impact of the US-China trade war, is climate change a factor in this campaign?

I think it's quite clear, having observed the campaign over the past few weeks, that it's clearly quite different to elections past. If we think about more recent elections, the climate debate has often been incredibly noisy recently.

This time around, it's still there as an issue, but it's more of a background hum. It's simply not getting the attention as an issue that's been in the past. That's understandable. I mean, if we think back to 2022, Australia was just sort of getting over and still...

It was quite clear in people's minds that the impact that those devastating 2019-2020 bushfires had had really brought home some of the consequences of a lack of action on climate change from the then government. We saw some of that feed through and certainly benefit some of those Teal candidates. They campaigned on a platform of increased climate action. They were very critical of the then Scott Morrison government's timid approach

approach towards reducing emissions. If we think even further back, 2013, you know, one of the first national elections that I saw here in Australia, back then debate was dominated by the carbon pricing mechanism, carbon tax by another name, in effect brought Tony Abbott to power. He campaigned incredibly hard on repealing that mechanism, won office and subsequently did scrap it. It

So we've been through a period where climate has been a real driver of policy and debate. It's seen party leaders ousted. It's been a determinant in elections. This time, not so much. So I guess the question I've been asking myself is, why is that?

It has been quite a busy decade, hasn't it? I mean, who can forget that iconic image of former Prime Minister Scott Morrison holding the chunk of thermal coal in Parliament? This is coal. Don't be afraid. Don't be scared. The Treasurer knows the rule on crops. A useful place I think that we should start this discussion at is what is on the table from both of our two major parties going into the 2025 election.

elections. David, can you step us through the key differences in energy policy this time? Is it as simple as nuclear versus renewables, for example? Clearly, there are differences between the two major parties, but I'm going to be a little bit contrarian. And I'm going to point to something where there is an area of consensus. Both major parties are going into this campaign saying Australia needs to hit net zero emissions by 2050.

There's no debate over the end point. There's no confusion over the goal. Where there are differences is how do we get there? How fast? At what cost? And at what cost to communities, not just at what financial cost? If we look at Labour's platform, they did bring in a raft of measures in their first term. They legislated a more ambitious target for emissions reductions. That's 43%.

below 2005 levels by 2030. And they'll continue to support the adoption of large-scale renewables. They've made a pledge for around about $2 billion Australian extra in funding for the Clean Energy Finance Corp. That sort of seeds renewables and green technologies.

There's a program to subsidize household batteries that's intended to help extend that solar boom we've seen in Australia. You know, and there are some policies around this ambition to bring green manufacturing jobs forward.

away from places like China and here in Australia. It's pretty much steady as she goes in terms of their policy this time. The Liberal Party, we haven't heard a huge amount, but what we have is very interesting. And chiefly among it, as you mentioned, the idea of bringing nuclear power to Australia. Yes, tell me about that. The detail is...

It's something clearly that, you know, we still want to see more of and still needs to be worked out. But, you know, in simple terms, you know, what the Liberal Party have suggested is having seven locations across Australia that for the first time ever would provide nuclear power generation. You know, that would take a number of steps. Nuclear power is illegal in lots of parts of the country.

It can take a long time and it's incredibly expensive. How those things are reconciled, we're yet to fully understand. But it is a key policy and a key point of difference between the two parties. So there is a general alignment on some metrics, but...

others, they do vary quite widely. I would like to zoom in on some of the key seats that we're looking at this election. One that comes to my mind is the electorate of Hunter, which of course has coal as its major industry. Now, David, you and I both know working in the bureaus here that we've had other regional polls occur in recent times. There's been one in Queensland. There's

What do the results in those states tell us about the climate outlook nationally for Australia? You mentioned the Hunter Valley and, of course, that lump of coal you referenced before that was held by Scott Morrison in 2017 from the Hunter Valley. And it remains a really crucial emblem and symbol in this election because how do you handle the transition of those kinds of communities now?

from traditional industries, in this case coal, to future industries where the outlook is uncertain. So it will be really interesting to see what happens in New South Wales.

Of the recent regional elections we've had, the one that's really interested me is in Queensland, where we saw the incumbent Labour government replaced by a new Liberal National Coalition government. Very quickly, we've seen some big and significant decisions on climate and energy policy. The government there has announced a sort of five-year energy plan that it's working on.

Also, it's already put a couple of hundred million dollars into the maintenance and upgrades of existing coal plants. It signaled that it sees a longer life for the coal-fired power capacity in Queensland. It expects it to continue for far longer than expected. What's most interesting is if that's the kind of policy that we could see if we see that result replicated nationally.

And what about WA? Because I think people outside of Australia, when they're thinking about the resource industry within Australia, they think of the Pilbara, right? The great, open, expansive desert. What happened in their recent regional poll? I mean, in Western Australia, and it's a place I've been very fortunate to visit a lot during my career at Bloomberg and spent a lot of time, luckily, in the Pilbara. There's a few dynamics going on there. Obviously, we saw the Labor government return to office.

But was that an entirely positive step on climate policy?

think that's debatable. One of the big criticisms nationally of Anthony Albanese's Labour government has been that they've been too weak on implementing environmental policies. They came into the last election, they campaigned in the last election with promises to overhaul environmental legislation, to introduce a national environmental agency. What we've seen in Western Australia is a lot of pushback

against any new burdens of regulation, not only from the resources industry, but absolutely from companies developing new mines, new gas export plants. Even companies who are looking to establish new green manufacturing sites, what they don't want is an additional burden of environmental legislation. And what we saw in that Western Australia poll very successfully lobbied the local, the WA Labour government to, you know, not to back regulations

new restrictions. So yeah, quite interesting in both cases to see how that could inform the national debate and national policy. And certainly what happens in the Hunter electorate in a couple of weeks' time. Now, you briefly touched on targets earlier, David. I want to pick up on that a little bit now. Australia is regarded as somewhat of a global test case for the energy transition. And it does in turn attract investment and attention from all over the place, right?

What is the actual status of Australia's energy transition? Are we actually on track to hit targets to reduce greenhouse gases? It's one of those scenarios where you can probably make an argument either way. So I think the truth is it's debatable.

So emissions in the year to last March were about 28.2% below June 2005 levels. That's the level that we're looking at. That's the baseline for the targets that the existing government have outlined. And again, that is to make a 43% reduction by 2030. So still some way to go. The

The pace at which reductions are being made is, you know, charitably about on track. I think realistically, probably a little too slow. And there are also other debates around what's included and what's excluded when you come to countermissions.

You know, if we think about the policy settings, there's a non-profit globally that sort of grades countries' climate policies and their targets, Climate Action Tracker. And it currently sees Australia's policy settings and Australia's targets as insufficient. The one area that it identifies chiefly is there's a lot of reliance on future technologies that are yet to have been commercialised and developed and

And not a lot of policy on phasing out things like coal exports, gas exports, the thing that are huge drivers of export earnings...

So it's a little bit chicken and egg, like we've got to have the technology to do it and we've got to get the technology first and agree how we're going to do that and also finance it. I think one thing recently that's also been quite profound is the responsibility for domestic policy, most certainly, but also Australia's place within the region.

We had some quite pointed comments from the president of Palau just this month on Australia as a sort of a big brother of the Pacific, wanting it to take more of a leadership role of this topic in the region. Let's take a quick listen. We are part of the Pacific family. We need to work together to solve problems. And it's not a joke.

Climate change is a reality and it's something that we face every day. And we need Australia's support. And we're ready to work with whoever is in government to tackle these problems. And it's so important that the Australian people understand that their leadership should...

take a leadership role in the Pacific and work with us to meet the challenges that we have ahead of us. David, it is quite a tense time in the Pacific with China fighting for influence in the region. Is Australia doing enough on climate change to support its Pacific neighbours? I think if you ask, and we heard, of course, there from Palau, if you ask a lot of Pacific nations, the answer would be no. But then if we think back to the time of the last election,

At that moment, Australia was regarded on the sort of international scene and in terms of climate diplomacy as a complete outlier. Australia had seeded, you know, a lot of its influence on the global stage and, you know,

The current government has spent quite a lot of time trying to rebuild that trust and trying to really reassert itself in just the global process of supporting the international approach to climate act. But the Pacific nations clearly are in a tough spot. And I think what we saw at the most recent global climate talks in Azerbaijan last year was a continued sense of disappointment.

developing countries came into that meeting asking rich countries for a commitment to direct about a trillion dollars in climate financing to the emerging world.

what they got was a commitment for 300 billion. So a lot less than expected. Australia is one of those developed nations that is being asked to do more. And so, you know, quite rightly, I think the Pacific, not only Australia, but Australia because of its role in the region, they are asking Australia to step up. When,

When we come back, let's lens in and consider the almighty dollar. How are investors in renewables approaching the election? And what do they want to see from messes Albanese and Dutton? You're listening to the Bloomberg Australia podcast.

And welcome back to the Bloomberg Australia podcast. You're here with me, Rebecca Jones, and I'm talking all things climate with Bloomberg's APAC head of ESG and green coverage, my mate, David Stringer. David, let's talk about money. Has the ALP seen an increase in investments in renewables over the last three years? And how are those investors approaching this election?

Well, there's nothing I like better than pulling up charts of energy transition investment, you know, and taking a look at

What's actually happening on the ground? Where is money flowing? And I think if you ask most voters, I think their assumption would be that under an Albanese government, what we would have seen is, you know, a continued flow of more investment. In truth, that's not the case. If we look at total energy transition investment, so that's the power system, that's clean transport, you know, that's

you know, that's clean agriculture. That actually fell about 5% last year to just less than 23 billion. That's even though what we are seeing and what we did see last year is a sort of rebound in investment into renewables, into clean energy. We also saw a little bit more spending on electrified transport.

But in total, it fell again. And if we think the total spending that our colleagues at Bloomberg NEF researchers, they forecast that between now and 2050, you know, Australia is going to need to spend about 2.4 trillion US dollars just on energy alone. How quickly that investment ramps up is really crucial.

I want to talk to you about a national obsession. Well, I mean, it certainly to me feels like it's a bit of an obsession and that is the adoption of solar energy.

something that's done quite well. How is that transforming the country's energy system? And is it a trend that we think will continue in the same fashion? I think if you talk to experts on energy markets, it's hard to overstate how transformative the adoption of solar in Australia has been. If we think there's been enough solar installed on

rooftops across Australia to really account for one in every three houses. Astonishing rise. And what's really interesting is we're not necessarily talking about

urban homes in places like Melbourne, Sydney or Brisbane, to a large extent, these are solar panels that have been installed in rural communities and in large numbers. So how has that changed the energy system? Quite radically. What it means is that right now, there's often an excess of power being generated during the middle of the day. The sun's at its height when we're getting the most irradiation on those panels. And in a sense, the solar sector in Australia has kind of been a victim of its own success. And in fact...

Our colleagues at BNF, what their analysis tells them is that for residential services, we think adoption peaked in 2021 and has been in a slow decline since then because

rebates and incentives have come off. We've seen the value of sending excess power to the grid become lower and lower because basically, power's worth less in the middle of the day now because there is so much solar, so little demand that the power itself becomes cheaper. One of the proposals we've heard in this campaign from Labour

is a policy to subsidize household battery. They want to see more people pair up their rooftop solar systems with storage batteries. That allows people to use it when it's needed. It sees less wastage. And, you know, that's a potential policy that could help, to some degree, extend the solar boom.

So I was right then. Solar panels are everywhere and we are obsessed with them. That is like a really well-known manifestation of renewable energy, right? You know, you go to IKEA, you see the solar panels on the roof. Go and have a look at my parents' beach house. It's covered in them. David, when we're thinking about

investments in renewables, certainly extending beyond solar panels. What other things are we needing investment in for one? And what are some of the proposals that both of the parties are putting forward in this campaign? Well, quite. I mean, so if we think about rooftop solar, you know, as a sector that added about three gigawatts last year, what's that? Well,

That's sort of roughly equivalent to about three coal-fired power stations. That's not enough. What we're really focused on is large-scale renewables projects, things with the sort of size and scale that can actually help Australia replace those big fossil fuel sites. And that requires a lot of investment, clearly. And as we said, it's been a very complex picture in the past few years under the Albanese government

If we zero in on renewable energy investment, you can really see, even looking at a chart, you can see when people talk about investor uncertainty and people

people being worried about policy changing. It's there in a bar chart. You can see investment yo-yoing from year to year. And so what we had was between 2018 and 2021, investment in these large-scale renewable projects really created, rebounded, and then actually flourished

fell sharply again in 2023, rebounded last year. And a lot of that is down to a policy the Labour government brought in, the capacity investment scheme.

scheme. Now, it sounds complicated, but, you know, put very simply, kind of what it does, it sets a floor, a revenue floor for a renewable project. The project earns less than expected, the government meets some of the difference. And similarly, there's like a revenue ceiling. If it does better than expected, you're going to pay some of that excess to the government. It helps investors have certainty when they're thinking about these multi-billion dollar investment, what's

Interesting is the Liberal Party's plan for that scheme is to add natural gas. That's opposed by Labour, who say that will deter the purpose of the scheme, which is to encourage private investment in wind, in solar, in renewable energy. So yeah, rooftops...

We're seeing potentially start to peter out and plateau. What the real focus is, what's the direction of those really big, large-scale renewals? I want to ask you about another thing that Australians love and that we think about all the time, and that is driving our cars.

Power isn't the only sector crucial to Australia's decarbonisation, obviously. And we have moved on, I like to think, from Scott Morrison's famous claim that electric vehicles are going to end the weekend. But is there a consensus among the parties around phasing out gas guzzling cars and utes? What does the data tell us?

You know, Australia is still seen as something of a laggard on adoption of electric vehicles, which kind of surprises me in a way because, and you know this as well, anytime we're out on a street here in Melbourne, the number of Teslas, increasingly the number of BYD cars that we see, never mind all the cars that we see,

all of the other myriad of electric models that are available now, that anecdotal evidence would seem to suggest that things are really taking off. What the numbers tell us is that they're not. I think there were just over around about 114,000 new electric vehicles sold last year compared to about 100,000

in 2023. So an increase, but not the kinds of dramatic jumps we're seeing in other jurisdictions. Part of that is policy. And what we're seeing in this election, although it hasn't featured massively, what we've seen from the Liberal Party is an indication that they would effectively sort of weaken the new vehicle efficiency. That's a set of policies that have

helps encourage adoption of low emissions, cleaner, more efficient vehicles. The concern from advocates of EVs is that by weakening that kind of policy, you effectively open the Australian market up for foreign automakers to dump their dirtier, less efficient cars in this market, rather than foster courage for EVs to be sold.

So, we have two major parties aligned on the fact that we need to move to net zero, but with different ideas on how to get there. Our position in the Pacific, as let's face it, the biggest player, is under even more scrutiny from our smaller neighbours. And the way we get investment in renewables is something both parties disagree on. The Libs on one side want to include natural gas in the investment scheme. Labor says you are missing the point. So...

Who said climate wasn't on the agenda? David Stringer, thanks for your time today. Thanks, great to be here, Bec.

And thank you for listening to the Bloomberg Australia podcast. I'm Rebecca Jones. This episode was recorded on the traditional lands of the Wurundjeri people of the Kulin Nation. It was produced by Paul Allen and edited by Ainsley Chandler and Chris Burke. Don't forget to follow and review the show wherever you get your podcasts and sign up for Bloomberg's free daily newsletter, Australia Briefing. Go to Bloomberg.com to subscribe.