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  • Writer's pictureCrest Economics

Australia at COP28- Dec 2023

Crowned as the most influential climate summit since the COP21 meeting which birthed the Paris Agreement, the 2023 United Nations Climate Change Conference (COP28) has seen over one hundred governments, including Australia, pledging to triple the world’s renewable energy capacity by 2030.

With the ulterior motive of decreasing the share of fossil fuels in global energy production, this pledge was joined by various announcements including: expanding nuclear power, cutting methane emissions and “the phase down of unabated coal power”. As such, more than 20 nations have signed a declaration aiming to triple nuclear power capacity by 2050 to reinforce “net zero” emissions efforts. Furthermore, various governments (i.e US) and international organisations (i.e World Bank) have also outlined commitments, funds and regulations aimed at limiting methane emissions.

However, the aforementioned third announcement has placed Australia in a predicament. In conjunction with phasing down the use of coal power, observers have also called for an end to financing new coal-fired power plants. Therefore, despite Australia having the highest penetration of rooftop solar globally (aim of 82% energy production from renewables by 2030) and closing in on the revised Emissions Reduction Target of 43% below 2005 levels, this fails to mask our status as one of the world’s leading fossil fuel exporters. In fact, based on 2021 figures, Australia is the world's largest exporter of metallurgical coal, and second largest exporter of thermal coal. Hence, Australia’s Minister for Climate Change and Energy Chris Bowen’s vision for the future of Australia’s energy exports is a transition from major fossil fuel production to becoming a renewable energy superpower. Should this form of microeconomic policy manifest, long-term inflation would also experience downward pressure as “renewables are the cleanest and cheapest form of energy…helping drive down bills and emissions” said Bowen.

Nonetheless, global environmental sustainability remains an ever-changing goal. Despite these new announcements, several climate vulnerable countries continue to insist on a phase out of fossil fuels completely. Additionally, Australia has voiced their ambitions to co-host the COP meeting in 2026 alongside Pacific nations, where old goals will continue to be revised and new goals will continue to be introduced.

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