Question time: Climate change and energy policy

15th November 2022

Mr GREG PIPER (Lake Macquarie) (15:13): At the risk of having the Treasurer repeat himself, my question is directed to him. Following his attendance at COP27, does he have any new understandings of how New South Wales will address climate change while ensuring sufficient and reliable energy supply throughout the State, as threats, such as the looming closure of Eraring, progress?

Mr MATT KEAN (Hornsby—Treasurer, and Minister for Energy) (15:13): I certainly do. I thank the member for Lake Macquarie, who not only understands this huge threat but also the enormous opportunity for communities likes his in the Hunter. He knows that taking strong action on climate change is one of the biggest economic opportunities for his electorate and for local communities across the State. It was an honour to represent New South Wales in the UK and at the Climate of the Parties 27 [COP27] in Egypt, meeting with governments and investors from around the world and representing all Australian States and Territories as the co-chair of the Net Zero Futures Policy Forum. I start by updating the House on the single biggest message conveyed to me as the Treasurer throughout the trip: Climate risk is investment risk. The physical risks of climate change are going to impact the cost of maintaining our infrastructure, growing our food and fibre and doing business in an increasingly volatile world.

The economic impact of climate change is not just about the physical risks of a warming planet. The fact is 70 per cent of Australia's two-way trade is now conducted with countries dedicated to reaching net zero emissions. The global markets that have underwritten our country's prosperity for generations have moved, and unless we move with them, we will be left behind. New South Wales will prosper from this mega trend. We have some of the best renewable energy resources anywhere in the world and by extension the capability to deliver some of the lowest electricity prices anywhere on the planet. That not only benefits existing businesses and households but also will make New South Wales a key destination for energy intensive industries like green steel, green aluminium, green hydrogen and more and attract international investment to our shores.

This message comes no clearer than from the financial markets themselves. During my trip I met with leading investment banks and firms. The dominant focus of my discussions with those firms was climate risk and opportunity. My discussions were instigated by them. I make that very clear: They were instigated by them. We know that markets have a natural inclination to identify, manage and price risk and that capital is seeking out sustainable and responsible homes. If you believe in the power of markets, as I do, you have to respect the flow of capital, and capital has made its call. That is something that we should embrace, not ignore, and we know other countries are doing exactly that.

The same message was clear from my meeting with leading credit rating agency Moody's. As members would know, New South Wales is the only State or Territory in Australia to maintain a triple-A credit rating. That is because of the strong economic management of the Government. Our triple-A credit rating gives debt markets across the world confidence to support our record infrastructure investment program. In their role as risk assessors, Moody's now publish environmental, social and governance [ESG] assessments for their clients with the following message: Climate risk is the greatest risk multiplier facing the world and a $45 trillion investment opportunity. I want to make sure, the Coalition wants to make sure, that New South Wales grabs that significant opportunity. [Extension of time]

That is why during my meeting the discussion focused squarely on the risks and opportunities for New South Wales as the world decarbonises. Their message was that for New South Wales to succeed we need to assess and manage the impacts of climate change for our State and continue to invest in new industries, such as renewable energy and green hydrogen, to diversify our economy in the face of these global mega trends.

Ms Kate Washington: And not weakening environmental protections.

Mr MATT KEAN: I acknowledge the interjection by the member for Port Stephens. The other message that we heard was the critical role that States and Territories play in reaching net zero emissions because, as we heard time and time again, it is the State governments that translate climate targets into plans and make visions for a net zero world a reality. We are responsible for the energy system, the planning system, the transport system and the buildings. These are all keen policy areas we need to tackle if we are going to reach net zero. This was the message we heard directly from the head of the United Nations Environment Programme, Inger Andersen, who acknowledged the leading role that New South Wales is playing to drive climate action forward.

In New South Wales, not only has the Government been responsible for the most ambitious electric vehicle, hydrogen and industry decarbonisation policies anywhere in the nation, we have legislated the biggest renewable energy policy, the Electricity Infrastructure Roadmap, which will allow us to produce cheap, clean and, importantly, reliable energy as we modernise our electricity system. That will power the industries and the jobs of the future. The power of our policies was recognised by governments and investors from across the world. For too long in this country, the policy uncertainty that persisted over climate action blocked the private sector from getting on with the job—which they are trying to do. We are facilitating the private sector to invest in our State and create jobs and opportunities. Thanks to the support of each member who voted for our critical climate change policies, this uncertainty is a thing of the past and we are getting on with the job delivering for generations to come.

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