Transcript
Speaker: Our future will be built by people willing to get on with the job.
Speaker: Are we making progress towards net zero by 2050 here in Australia? I think you'll be surprised by the progress we're making. Today we're speaking to the Honourable Matt Keane, who's the Chair of Australia's Climate Change Authority and Director of Wallamie Capital.
Speaker: He also serves as a board member on the Australian Wildlife Conservancy and an adjunct professor at the University of Technology, Sydney. Formerly a Member of Parliament, his many roles include Minister for Innovation and Better Regulation,
Speaker: and Minister for Energy and Environment. He is a leader in accelerating Australia's net zero future. Well Matt, welcome to the show. Seth, thanks for having me. So tell us a little bit about your role at the Climate Change Authority.
Speaker: I was appointed two years ago as the chair of Australia's Climate Change Authority. And essentially, Seth, my job is to make sure that Australia stays on track to meet its climate reduction goals while strengthening our economy.
Speaker: Right now, we're finalising our review of Australia's Carbon Credit Union Scheme, which is looking at how carbon markets can continue to support genuine, credible emissions reductions. Another big focus for this year is our contribution to the safeguard mechanism, which some of your members will be interested in, may be impacted by. That review is happening right now. And the Climate Change Authority is doing work on what the decline rate ah should look like.
Speaker: and how we can drive more on -site abatement. More broadly, we're focused on ensuring Australia gets the infrastructure, the investment, and the policy settings right to deliver net zero by 2050 and hit our interim goals. so That's the work of the Climate Change Authority. I'm very proud and honoured to be able to lead this great organisation.
Speaker: Sounds like great work, especially the abatement on site. And I actually got to hear your address at the IS Connect conference in Brisbane. And you described infrastructure as the blueprint for Australia's net zero and climate resilient future. What makes infrastructure such a powerful force for future building?
Speaker: Well, I think
Speaker: The thing about infrastructure is that it really shapes the choices that people can make. um it isn't just a pipeline of projects. It's the blueprint for how our economy runs, how our communities function and how resilient we'll be in changing our climate. If we build the right energy, the right transport and communications infrastructure, we make the low emissions choice the easy and affordable choice. Infrastructure lasts for decades. So the decisions that we make today will determine whether Australia is more competitive and resilient in 2050 or not. And that's certainly what I'm focused on. How do we make a stronger, more competitive and more prosperous as nation? And infrastructure is going to play a... big role in achieving those goals.
Speaker: Sure, due to its scale, infrastructure is key to achieving net zero, but... Where should we really focus to accomplish? All of that. I think we need to move fast across several fronts. all at the same time to get there. We need to accelerate the clean energy generation that's needed. We need to build the transmission and storage needed to connect that generation that I talked about.
Speaker: as well as decarbonizing our transport systems, our heavy industry, and also the built environment. All of those things, any one of those things alone ah would be a huge feat to deliver by 2050. But we're trying to do all these things at once.
Speaker: What we also need to focus on is on embodied emissions. Some of the biggest gains come from smarter design choices, lower carbon materials, recycling and procurement decisions made before construction even begins. So that planning piece around infrastructure, particularly large -scale infrastructure, is really important.
Speaker: And across all of that, embedding climate resilience into infrastructure design from the outset is really important. Like, we are already on track ah to see emissions or see temperatures rise above 2 degrees Celsius. Then we'll have a dramatic...
Speaker: impact. on um extreme weather events that are likely to happen more severely. and more frequently. and you know the cost of doing nothing. will be born.
Speaker: by taxpayers and communities and businesses as they continually have to repair infrastructure that's not built for purpose. I saw that only too well as the former treasurer of New South Wales, where I had to finance the largest natural disaster event in New South Wales' history, and that was the Lismore floods.
Speaker: um So. adapting to our changing. environment is going to become more of a topic if we want to avoid the huge economic costs that come with the impact of climate change.
Speaker: Well, fortunately, we're not starting from scratch. we did have the electricity infrastructure roadmap that started about six years ago. How is that? So far, what's the report card on that? And um are we still on track for net zero by 2050?
Speaker: Well, that's... an ah area of public policy i'm very proud of i was the architect of that as the new south wales energy minister and seth for your list as benefits that was born out of necessity. I became the energy minister in 2019. on being commissioned, and the department advised me that In the next decade, four of the state's coal -fired power stations were going to come out of the system.
Speaker: um now we needed to plan to replace that infrastructure. before it exits. And that's why we came up with the electricity infrastructure at roadmap. If you're relying on the market signals or electricity prices to drive investment. then what that means is very high prices encourage investors to come in. However,
Speaker: it's consumers that have to pay for it so what we were trying to do is get that infrastructure built without the sharp cost impacts. that would the market. would need as a signal.
Speaker: that consumers would have to pay for. So I'm very proud of that bit of work. We've made significant progress On ah the roadmap, um the Central West...
Speaker: Arana Renewable Energy Zone is well underway. We've made significant progress on renewable generation and storage across the state. There's been more generation, particularly wind. But there will still be need. more needed to be rolled out before the large coal generators close.
Speaker: The challenge remains getting transmission and enabling infrastructure built fast enough. So the lesson it is that technology isn't. the constraint, the technology exists.
Speaker: The challenge is now delivery, approvals, investment and community support at the pace that's required. So there's a huge amount of work that needs to be done if we're to... ah build the replacement infrastructure before the existing infrastructure exits the system.
Speaker: Um, uh there is uh Progress being made, but to use a political saying, Seth. There's more to do. but we're heading in the right direction. There is a lot more to do. You'd said that we need 5 % more renewables every single year for the next decade.
Speaker: Is that achievable? And why specifically in the next decade? Yeah, it is it is hugely ambitious. There's no doubt about it. But it is achievable for the reasons I just outlined. We've got the technology. uh to be able to support ah meeting our emissions reduction goals. but uh the now
Speaker: The key risk now is the delivery risk and, you know, whether it be planning approvals, environmental, green tape, community. um ah social license.
Speaker: We need to work through. these challenges to make sure we get the best result for our communities. for our taxpayers. For consumers, ah for the environment and for the economy.
Speaker: So we've seen huge reductions in the costs of solar and in batteries in recent years. So there's no reason why consumers and Australian businesses and our broader economy can't benefit from that. Those cheaper batteries are creating real opportunities. For example, we're seeing more solar projects paired with batteries now. So you take that really low cost.
Speaker: solar from the middle of the day and being able to use that at times when it's not sunny. That's helping us to get more valuable... value from renewable energy by storing it when the supply is abundant and using it when demand is highest.
Speaker: But the challenge isn't. Whether the technology exists, as I said, it's whether we can build the supporting infrastructure and the approval systems needed to keep pace in a timely fashion.
Speaker: Because we know that the exit of these coal -fired power stations is on the horizon. You may be able to keep them running for slightly longer or they may come out slightly sooner. Either way.
Speaker: you can't bet on those assets being sweated for a material period of time more. So we need to get on with building new infrastructure now to keep the lights on and put downward price pressure on prices.
Speaker: I've heard you mention several times these renewable energy zones. Tell us a little bit more about what those are and what's special about them. Well, the renewable energy zones are essentially What a day. power plants, their precincts.
Speaker: for clean energy. Instead of saying clean energy, popping up all over the state. We tried to... focus them on areas where the best resources, the best wind, the best solar.
Speaker: um and what the The reason why I try and do that is because you don't want transmission and distribution lines running all over the state. You want to just build... ah You want to maximize.
Speaker: um the amount of generation that can go on one transmission line. um So. Our res support high amounts of generation in the right locations with coordinated transmission to connect them to the centres of demand. Done well, they'll reduce the overall system cost.
Speaker: improve reliability. and create regional economic opportunities. So they help lower the cost of integrating renewables into the system. and unlock huge amounts of investment in regional Australia. um mean ah I ah don't think there is.
Speaker: and infrastructure projects. ah that we've seen or likely to see. ah certainly in my lifetime. ah of the scale and magnitude of the... ah transition of the energy system.
Speaker: Who will be the beneficiary of those jobs? And that huge amount of investment, well, it's rural and regional Australia. So this this done well could really be an economic gold rush.
Speaker: for citizens living in the bush, citizens living in the regions. And that's something that I was tremendously passionate about. when I designed. the electricity infrastructure roadmap.
Speaker: um I wanted to ask you, because you're coming off a career in politics and most people don't often have direct contact with politicians or the political process, they read about it in the newspaper. So I just wanted to ask you a couple of questions around that opaque world. As an insider, what are some of the aspects of getting infrastructure projects through government that most people wouldn't really understand? and And what can they do better when asking more of their government?
Speaker: Well, I think... Um. governments or ministers, they have to balance a lot of competing objectives. um ah But I think if you go back to... core principles.
Speaker: Good projects need a strong evidence base. They need community support and a clear economic case. ah The most successful... advocates understand the problem government is trying to solve.
Speaker: and present practical solutions, not just aspirations. I hear a lot of talk. um At the moment. in fact, around... um You know, whats what's the best policy to get emissions? down.
Speaker: And people kept saying, oh, we need a carbon tax. We tried that but it clearly didn't have... the social license. um so We shouldn't make the perfect the enemy of the good.
Speaker: is my message. um So people wanting to approach government, wanting to approach ministers, need to think of What's the government? trying to solve. Usually they're trying to solve.
Speaker: and issuing the community interest the state interest and the national interest. Coming forward. with a practical solution. that can work within the political constraints that the government or the minister is dealing with. I think that's the best way.
Speaker: and most effective way to approach government and to bring about the change that you're trying to see. working with government, understanding the challenges the government's trying to solve. that's in the community interest and the national interest. and bring forward solutions. that can align with those objectives.
Speaker: Well, one of the things we hear probably most often around infrastructure, especially because of the high price points, is the economics of getting it done. And I noticed that you are a chartered accountant back in the day. So how's that influenced your perspective on net zero and climate decisions?
Speaker: Well I think it's taught me to focus on evidence. and certainly long -term value creation. And... In my view, as a chartered accountant, ah as a former ah public policy practitioner. Climate change is fundamentally an economic issue. The costs of inaction are real, they're measurable, and they're growing.
Speaker: So I think that... um Uh, My training as an accountant was around assessing risk. and allocating capital efficiently. Climate risk is increasingly ah affecting Asset values, supply chains, investment decisions.
Speaker: and then ah Certainly as ah as a minister, there was... the treasurer of the state. It's affecting... uh taxpayer expenditure. It's affecting consumer costs.
Speaker: It's... affecting lives and livelihoods i mean you can't not look at the Lismore floods. that followed. the worst bushfires that we've ever seen where communities were having to take shelter on the beach.
Speaker: to avoid the you know, the dangerous impacts of those bushfires. And those bushfires followed the worst drought that we've ever seen. so um This is increasingly...
Speaker: Becoming. And economic. Cost? for communities, for people's lives and livelihoods. And that's why climate considerations are becoming mainstream business considerations. ah This shouldn't be about...
Speaker: ideology. ah This should be about economics. and engineering. and what's in the national interest and I think My training as an accountant is to assess problems with those things in mind first and foremost. And that's what I've always tried to do. when tackling this area of public policy or any other area of public policy for that matter.
Speaker: You know, it's interesting. Previously, you'd mentioned that when the coal -fired power plants were due to come offline due to depreciation. that was when we needed some form of power to replace them. And so electrification made sense.
Speaker: But at the same time, that electrification price is not added on top of it because that would just be money that we would need to spend on some form of energy anyway, right? Yeah, so, I mean... God forbid.
Speaker: ah Certainly I took the view that government had a role to play to create the frameworks that were investable. that would still protect consumers and be in the state's interest.
Speaker: um so If you just leave it to the market, then the price signal that will encourage the investment to build replacement infrastructure has to be very, very high. And who wears the cost of that?
Speaker: It's moms and dads and businesses. So the Electricity Infrastructure Roadmap tried to break that Um, you know that nexus between high consumer bills.
Speaker: adds the necessary infrastructure that we needed. uh so that we could get investment firing kit built. in a way that dampened.
Speaker: consumer prices. Well, I think um that's something environmentalists and sustainability professionals have not done so well over the years is really translate into an economic viewpoint. um What advice would you give someone who cares about the carbon side and cares about the climate side, but wants to speak to someone who cares more about the financial side?
Speaker: I think... The way I, treat I mean, I... I legislated. The roadmap. And also... ah strong climate targets.
Speaker: from ah the conservative side of politics. um The reason I'm a... a member of the Liberal Party and proud member of the Liberal Party is because I believe in ah free markets. and private enterprise and private capital.
Speaker: And I always saw the Liberal Party as the home of the business community. ah So... I tried to, the reason I got these policies through that side of politics, through a cabinet and through a party room and through ultimately a parliament, was I always focused on the economics.
Speaker: I focused on the risks. I talked about the risk, the productivity, the resilience and the returns. And... um The reason I did that with sincerity is because climate action is increasingly the lower cost option compared with managing escalating climate change. And there was empirical evidence and data, economic data. that back that up. So I focused.
Speaker: on the facts and the evidence rather than the ideology. And I think that's how we... were successfully able to... uh bring the conservative side of politics on this journey. ah I'm not unique in that. That's exactly what the UK...
Speaker: Conservative government did. They focused on... the economic reality. ah not the ideology. And I think when we do that, we can build a broader coalition.
Speaker: in the national interest. absolutely i think that's the discussion that needs to be had more i think that's a great idea In fact, you said that every $1 in adaptation is worth $11 in recovery costs.
Speaker: um but that does run into the question where people look at how much they're spending now versus how much they're spending in the long term, that capex versus opex. um How do you kind of get over that hurdle as well?
Speaker: Well, increasingly it's not one or the other. It's both so that I mean, take take solar for example. the Uh, the levelized cost of electricity from solar. Today is the cheapest form of energy.
Speaker: and over the long term ah that will ensure that um we give ourselves the best chance of mitigating the economic cost of dangerous climate change. so It's both. It's about...
Speaker: Governments. you know doing the hard work of developing the policy that will meet those challenges between short -term and long term. And that's what we did in the New South Wales Coalition government.
Speaker: In fact, you said that renewables are able to stop the recession in New South Wales. How does that mechanism work? Well, I didn't say that. the yeah The Labor Treasurer of New South Wales said the only thing keeping the state out of recession was the renewable energy zones and the electricity infrastructure roadmap.
Speaker: ah you know That's an example of... um bipartisanship but a new Labor administration and acknowledging the policy work. done by the previous coalition administration.
Speaker: that that's having real economic benefits to the state. our GDP or GSP ah in New South Wales. according to this recent budget.
Speaker: The thing that was... Keeping it out of recession was the huge investment that was going to the state. because the policy work ah that the government I was proud to be a part of had done. on the electricity infrastructure roadmap. Things are getting built. Capital is being deployed, jobs are being created.
Speaker: And ultimately... Bills will come down. because of that work and right now It's keeping the state power ahead in these difficult and economic times. and If that's not the case...
Speaker: for ah good public policy, strong climate action focused on economics, building infrastructure. then I don't know what is. That does sound good.
Speaker: Well, you've been to the conference for the Infrastructure Sustainability Council. What's... the one role that you think the Infrastructure Sustainability Council plays in helping Australia's organizations move toward net zero and decarbonization?
Speaker: What do you think? yeah I mean, i've I've been to the conference and it was a terrific conference. and i The thing that struck me was... how The IRC helps turn ambition into action.
Speaker: It provides frameworks, standards and practical tools tools that help organizations build better infrastructure. And that's critical if we're going to scale solutions quickly and consistently across the economy.
Speaker: Um, So... My advice to... ah Members of the ISC. perspective members. of the IRCs to get involved. It's a great forum through which you can...
Speaker: uh Talk to government. Shite. uh public policy in the national interest. ah But also... Don't wait. for perfect certainty the organizations that move early on decarbonization resilience will be the ones best positioned to succeed in that net zero economy, which is coming. I mean, the majority of the world's GDP has committed to net zero.
Speaker: and So increasingly, the markets that have underwritten Australia's prosperity will become low carbon ones. And we're really well placed. to win in that world. So the future won't be built. by spectators. It'll be built by people willing to get on with the job. And I know members of the ISC are those people getting on with the job of building the infrastructure that our country needs to continue to prosper.
Speaker: That's great. Well, what's one piece of advice you think that our audience, if it's a general audience could act on? I think get involved. uh Don't sit on the sidelines and start. Get involved.
Speaker: Our future will be built by people willing to get on with the job. And I know that's what members of the ISC are trying to do. And... ah uh, those organizations that see where the future is heading.
Speaker: and move early on decarbonisation and resilience will be the one's best position to succeed. in that new world. ah which we know is coming. Just look at... ah That stat, 80 % of the world's GDP has committed to net zero.
Speaker: uh Ed. that momentum will only gain pace, not lessen. Well, I'm looking forward to that world. Thank you so much, Matt, for being on the show. We really appreciate it. This was a great interview.
Speaker: Thanks, Seth. Really appreciate your time and the work you do.
Speaker: And thank you for listening to another episode of Infrastructure Connections. Please take a moment to follow us wherever you get your podcasts, and we want to know your feedback. Leave a comment down below to let us know what you think.
Speaker: Stay tuned for the next episode of infrastructure connections.
