To achieve scale, Australia needs to tap into institutional and international finance, de-risked on the back of a strategic, national climate policy framework to trigger these outcomes over this critical period. 

Unlocking new forms of capital                                                                       

Having national energy projects at the giga-scale will attract investors from banking, superannuation, and industry to build, maintain and operate the vast infrastructure required. These investors are looking to spend billions energy transition^[5] and will require an investment environment to support large and long term capital deployment. As our clean energy opportunity expands, international investment will play a key role to help secure export pathways for commodities such as hydrogen and green metals.

Alignment of our governments will be an initial and ongoing requirement to support a conducive investment environment.

 A strategic policy framework for climate innovation 

Limited progression on climate and transition policy has impacted Australia over the last decade. A coordinated climate policy framework is now starting to form. The framework, however, still needs strategic implementation to provide a solution to society, while maintaining Australia as an energy export superpower. We see precedent of such a framework being set by the United States that aims to drive innovation from three fronts. This tripartite framework, named here the Brains, the Brawn, and the Backing, is expected to drive a sudden and permanent impact on investment in decarbonisation, with an emphasis on leveraging domestic resources and innovation^.[6]

The US CHIPS and Science Act is the largest investment in American research and science in decades. The Act authorises ~US$80bn a year of spending into research, development and demonstration for new technologies, including for clean energy. The bulk of this funding is targeted at the push of technology from prototype to early commercialisation^[7],  a major funding barrier for climate technology.

The Infrastructure Investment and Jobs Act invests US$98 billion into energy transmission, electric vehicle charging, supply chain resilience, public transport, and climate change impact mitigation. This Act establishes the skeleton of the energy system that climate technologies are built on. This Act establishes the skeleton of the energy system that climate technologies are built upon. The Act provides a base of secure financing to help demonstrate and test technologies that can then attract subsequent investment to reach scale.

The Inflation Reduction Act marks the US’s largest ever climate spend at US$386 billion^[8].  The Act uses a carrot, not stick, approach to financing the climate transition by rewarding companies with tax credits for manufacturing and delivering technologies domestically, rather than punishing them with a carbon tax^[9]. These credits now make the US one of the most attractive jurisdictions in the world to develop future, clean industries and will likely see a rapid influx of investment and growth (Figure 2).