Our work – spanning Australia, Southeast Asia and the Pacific – stepped up this year, as did climate action around the world.
It was a year of shifts around the world in terms of positive momentum for climate action. Climateworks supported, facilitated and amplified that momentum at every opportunity.
Climate action was kicked off in April at the Leaders Summit on Climate, which saw US President Joe Biden host 40 leaders, 17 from the ‘Major Economies Forum on Energy and Climate’ – responsible for close to 80 per cent of global emissions and gross domestic product. Several nations increased their ambition ahead of the summit, with the US and China delivering a co-statement outlining their intention to ‘significantly advance global climate ambition on mitigation, adaptation, and support’. Indonesia upped their ambition at the summit, and shortly after committed to net zero by 2070.
In May, the International Energy Agency released its Net Zero by 2050 roadmap for the global energy sector. The roadmap showed no new investment in oil, gas or coal assets globally beyond 2021 – with developed economies phasing out all coal by 2030.
In July, Indonesia created their long term low-carbon and climate resilience strategy, which included aspirations to reach net zero emissions by 2060 or sooner. This swift increase in climate ambition involved a lot of background work and discussions, including by the Climateworks team in Indonesia. In Australia, our multi-sector energy modelling, developed with CSIRO, informed the AEMO 1.5 degree aligned ‘hydrogen superpower’ scenario.
In August, the United Nations Intergovernmental Panel on Climate Change released their sixth report on the ‘state of the planet’. It showed that every increment of warming avoided is worthwhile in the race to decarbonisation. Each increment makes a significant difference to the frequency of extreme weather events, the level of global sea rise and the likelihood of an Arctic Ocean free of ice. Significantly, the report also showed that the window for limiting global warming to 1.5 degrees is still open – aligning with our modelling from last year that showed Australia still has a pathway to 1.5.
In September, the OECD assessed Australia’s economy for the first time since 2018. The analysis showed how much Australia stands to gain by joining the global shift to net zero – and reinforced the importance of moving now. The Draft National Construction Code progressed our recommendations from Built to Perform in 2018, a step closer to better buildings for Australians. Western Australia’s Draft Strategy for Infrastructure also took positive steps, expliciting addressing that climate change ‘is a critical long‑term issue impacting many sectors.’
In October, mainstream business groups called for a net zero by 2050 target for Australia, along with a 46-50 per cent reduction in emissions by 2030. The federal government soon followed suit with a commitment to net zero by 2050. But modelling by Climateworks and CSIRO shows net zero by 2035 is possible for Australia. We worked with state and territory governments in Australia to showcase leading climate action, and build networks across state lines. We developed a ‘best practice’ guide for corporate climate commitments. Partnering with the Global Green Growth Institute and Relative Creative, we supported the Kingdom of Tonga to develop their low-emissions development strategy.
COP26 in November marked a significant moment in climate action. With nations expected to step up their commitments, pledges and announcements showed momentum. While they weren’t enough to bring emissions down enough to limit warming to 1.5 degrees – yet – the agreement text keeps this goal at the heart of global efforts, explains Anna Malos – Country Lead for Australia who represented Monash University and Climateworks at the negotiations. She says: ‘Momentum is dramatically different. Net zero goals are the norm.’ Published alongside COP26, our work with the Sustainable Development Solutions Network (SDSN) and the Jeffrey Sachs Center on Sustainable Development at Sunway University has convened teams from half of all ASEAN nations to build the economic and technical case for decarbonisation in Cambodia, Indonesia, Lao PDR, Malaysia and Thailand.
Through the year, there were other strategic collaborations to continue driving momentum forward. We partnered to introduce a new framework for regional precinct-scale action, accelerating investment in both supply and demand sides of decarbonisation in industry and energy. New partners joined our Energy Transitions Initiative, now representing almost one quarter of the ASX100 market capitalisation, and over 20 per cent of Australia’s emissions. The initiative published its first findings of how technologies can achieve net zero emissions in all the five supply chains involved.
And by year end, we could see plainly what has been evident for some time: that investors, including superfunds, are seeking out responsible options and they are being rewarded with increasing returns. The Australian Climate Transition (ACT) Index launched in 2020 to provide investors with a forward-looking sustainable investment strategy, and which we developed with BNP Paribas, ISS ESG and Monash University’s Centre for Quantitative Finance and Investment Strategies, outperformed the market by seven per cent in 2021. Watch this space!
We look forward to building on this momentum in 2022, raising ambition and increasing action to keep 1.5 degrees within reach.