Climate Investor Forum speech
The Hon. Matt Kean
Chair - Climate Change Authority
May I begin by acknowledging the traditional owners, the Wurundjeri Woi-wurrung and Boon Wurrung peoples of the Kulin Nation.
It’s a privilege to be here at the Climate Investor Forum — because if we are serious about Australia’s emissions targets, then we need to be serious about the role of capital.
And today I want to answer a very practical question: How do we turn Australia’s climate ambition into investable opportunity?
Because Australia’s 62–70% emissions reduction target by 2035 versus 2005 levels is not simply a policy objective — it's an economic transformation agenda.
And it will succeed or fail on one thing above all: our ability to mobilise capital at speed and at scale.
Now, if you look back a quarter-century to how we lived in 2001 and compare that with 2026, you could argue that a lot has changed.
Our houses are a bit bigger, and Australia’s has added an extra Victoria in population terms, or more than 7 million people.
More than a third of our houses generate our own electricity and one in six new cars sold last month was an electric vehicle (EV) — compared with a virtual absence of such gadgets back then.
Indeed, last quarter, renewable energy supplied more than half the electricity in Australia’s main grid for the first time.
Such advances, though, will seem quaintly slow over the decades to come as technology advances, particularly around electrification, make “turbo-charging” seem sedate.
And when we look overseas, we can see what’s possible. In China, the leader in so many of the clean fields, sold 13.3 million EVs domestically last. Easily the world’s largest auto market by units, more than half of sales were electric.
In electricity generation, the stats are even more eye-popping. While Australia added in the order of 10 gigawatts of new solar and wind capacity in 2025, China added that amount about every 9 days... clocking up 430GW, or more than the rest of the world combined, according to Carbon Brief(Opens in a new tab/window).
So, what might our world look like in 2050 (coincidentally also a Year of the Horse in the Chinese Zodiac, matching the Lunar New Year that began just yesterday)?
There are many reasons to think we are experiencing a new industrial revolution, guided by artificial intelligence, which will need lots of energy.
Australia, with some of the best renewable energy resources on the planet, will have a commercial and even geopolitical edge over other regions.
Steel, aluminium, ammonia, silicon...whatever you forge, the fuel will increasingly be green.
And while there will be sectors which still need to burn fossil fuels and require a response to climate change, there is hope in what this could look like, too.
Those with hectares to spare will discover new ways to derive income. In addition to traditional agriculture, we could see landowners using carbon sequestration methodologies to bolster soil health, reduce erosion, provide shading for livestock and reduce the drying of our landscape. Hosting solar and wind farms will be more common, too.
And rewilding of biodiversity-rich corridors can reverse the slide of our remarkable and unique Australian ecology – aiding landowners in the process.
Together these efforts can enable us to prosper unlike any previous generation but do so in ways that don’t cook our atmosphere and acidify our oceans, avoid melting the giant icesheets of Antarctic and Greenland and so, spare our current coastlines from rapid sea-level rise, among other benefits.
And it will be with private capital, in particular, that we can realise this potential.
1. The world has changed
We are living through a profound global economic reset.
The net zero transition is no longer just about climate risk. It is now about:
- industrial competitiveness
- supply chain security
- energy sovereignty
- and economic leadership.
According to Boston Consulting Group’s analysis, meeting Australia’s 2035 ambition requires roughly $475 to $630 billion of capital investment over the next decade.
That’s in the order of $1 billion — per week.
There will be a lot of competition for that money.
Yes, the Trump administration has been busy winding back the previous government’s Inflation Reduction Act, but a lot of the allocated billions will still be spent as the Act intended.
And many US states are pressing on with their decarbonising goals, so it’s not just California dreaming.
Elsewhere, the impetus for decarbonising is still intact, whether it’s in Europe with their Green Deal Industrial Plan, China – as mentioned — show little sign of reigning in its gigantic investments in renewables and storage.
Other parts of Asia, the Middle East and beyond will vie for capital to meet Paris Climate commitments – and to stay competitive.
In other words, Australia must keep itself an attractive destination for global funds. We are NOT guaranteed a podium placement even with all our natural advantages.
Yes, we all need to cut carbon emissions. The good news is that these efforts are fast becoming the dynamos of economic activity.
More than a third of the growth of China – the world’s second-biggest economy — was generated by the clean energy sector in 2025, according to Carbon Brief(Opens in a new tab/window).
To be clear, global capital isn’t holding out for perfect certainty.
After all, expanding firms are typically disruptors of the status quo.
We must position ourselves to be magnets for private capital — including from our own superannuation funds that often preference investments in renewable energy and other clean-industry target outside Australia, rather than those at home.
Jurisdictions seeking to lure and retain that capital will be more likely to succeed if they can offer:
- credible targets,
- stable policy frameworks,
- investable project pipelines
- and execution capability.
Much is at stake. If Australia wants to have a say in this global shake-up, we can’t be merely price-takers of others’ technology and innovation…not if we want to generate well-paying jobs in sustainable industries.
2. The scale of Australia’s task
Australia’s 62–70% emissions reduction target by 2035 is ambitious. On a per-capita basis, the cut is 76%-81% from 2005 levels – among the steepest reductions on the planet.
It requires a step-change in our efforts to date.
True, we have already made meaningful gains in decarbonising the grid, opening the way to hammer emissions lower as large swathes of the economy electrify.
But it is important to state clearly: the next decade will need to see more progress than the last one.
Capping and then cutting emissions has to happen in several areas, such as:
- transport fuels
- methane
- and hard-to-abate industrial activity, including cement, steel and agriculture.
In other words, the future won’t just be about closing coal-fired generators.
3. Why this is not a cost story — it’s an opportunity story
When we talk about the transition, too often the conversation is framed as a burden.
But the evidence is increasingly clear: the net cost of the transition is manageable, and the investment opportunity is enormous.
Decarbonisation requires major capital deployment in electricity generation, storage, transmission, distribution, and electrification.
The costs may loom large, but not all of the expenses should be considered “extra” – rather consumer as usual.
The Climate Change Authority, for instance, drew up one pathway towards meeting the 2035 emissions goal that envisaged half of all cars being sold from now until that year being EVs.
That wasn’t a prescription nor prediction, to be clear.
But the point is that Australians would be snapping up new cars as the vehicles aged anyway, and their replacements will feasibly be electric in about half the purchases.
Energy efficiency will often be a built-in feature of this transformation.
For instance, only about 11% of energy used to turn the wheels on EV is wasted, compared with 75%-84% wastage in internal combustion-engined vehicles(Opens in a new tab/window).
Some industrial processes — think cement and steel-making — will need further innovations to be competitive.
Heat pumps can shift the heating and cooling loads to the grid. A range of other industrial activities can also be electrified for lower operational costs than gas even with existing technology.
In any case, if that’s where the consumers are headed, suppliers will want to be there.
Follow the money, to be sure, but smart investors are those who anticipate where that money is headed and get there first.
By the way, those benefits extend beyond savings for consumers and lower carbon emissions.
This change is also about:
- energy security
- productivity
- industrial competitiveness
- and what “A Future Made in Australia” should look like.
And we shouldn’t just aim for clean-tech assembly. Rather, the design and building of scalable, exportable systems are what we want.
4. Australia’s strategic advantage
Australia has the potential to be a critical player in the evolving global economy.
Not because we have the biggest population or the biggest manufacturing base, obviously.
But because we have structural advantages that few countries can match.
Aside from abundant low-cost renewable resources and a periodic table’s worth of critical minerals, we have engineering capability, deep institutional expertise, and one of the largest pools of long-duration capital in the world through superannuation.
Legislated targets also mark a strong national direction of travel.
That gives Australia an opportunity not just to decarbonise domestically, but to build new export and industrial platforms.
Because, as I said at the outset: the global economy is not only decarbonising — it is reindustrialising.
And the competitive advantage in a net zero world is simple: cheap, clean, reliable energy.
If Australia can deliver that, we can become an industrial powerhouse in green commodities. Apart from those I’ve already mentioned, sustainable fuels and clean manufacturing supply chains will round out our offering of high-value, clean industrial products to world markets.
5. The real constraint: capital mobilisation
But to realise that opportunity, we need to be honest about the binding constraint.
The constraint is not technology.
The constraint is not ambition.
The constraint is capital mobilisation — and the conditions under which private capital is willing to deploy.
Investors don’t invest in targets.
They invest in cashflows.
They invest in risk-adjusted returns.
And for investors, the question is: can Australia translate ambition into investable opportunity at scale?
That requires 3 things:
- policy durability
- credible price signals
- execution capability.
If those elements are weak, the cost of capital rises, projects stall, and investment is delayed or diverted to more compelling markets.
If those elements are strong, capital competes to enter.
6. Policy settings and price signals to crowd-in capital
So, what does it take to mobilise private capital at scale?
In my view, five things matter. First, stable long-term targets with near-term milestones. Targets must extend beyond electoral cycles. Investors need confidence that direction will not reverse.
Second, credible and durable price signals. The economy needs a clear signal that emissions will carry an increasing cost over time. That doesn’t necessarily mean a single economy-wide carbon tax. But it does mean credible constraints and mechanisms that affect behaviour and investment.
The Safeguard Mechanism is an important step in that direction.
And the stronger and more predictable the signal, the lower the risk premium investors will demand (a government review of the mechanism in 2026-27 should reinforce that signal).
Third, investable revenue frameworks. The transition is not held back by a lack of capital. It is held back by a lack of bankable projects.
Mechanisms like underwriting, long-term contracting, and credible offtake arrangements are essential to crowd-in private capital.
Investors will fund renewables, storage, and electrification infrastructure at scale if revenue certainty exists.
Fourth, clear priority sector strategy. Australia needs to focus on where abatement is achievable at scale and at least cost.
The core pathway is clear:
- decarbonise electricity
- electrify transport and industry
- reduce methane
- and scale high-integrity sequestration
Policy should reinforce this least-cost pathway.
Fifth, execution reform — planning, approvals, and delivery. Execution risk is fast becoming the binding constraint.
Delays in approvals and transmission delivery are increasing project risk and raising the cost of capital.
This issue is not confined to climate action.
It is economic reform.
If Australia wants to attract global capital, we must become faster, more coordinated, and more predictable in project delivery.
7. Where the capital must go
If we look at the real economy, the capital deployment priorities are clear.
The transition will be won or lost in four areas:
1. Electricity generation and storage — scaling renewables and firming capacity is foundational.
2. Transmission and distribution - the grid is the platform for the whole economy. Without transmission, generation cannot connect, and electrification cannot scale.
3. Transport electrification — transport fuels are now one of the largest emissions sources. EV uptake and charging infrastructure will be decisive.
4. Methane and removals - methane is a large share of emissions, and it is often lower-cost to abate than many industrial solutions. Removals will also be necessary — but they must be high-integrity and durable.
These are not theoretical sectors.
These are investable sectors today.
8. Structuring co-investment to crowd-in private capital
So how do we accelerate deployment?
Government cannot fund this transition alone.
And it shouldn’t.
The goal is not to replace private capital.
The goal is to use government strategically to unlock private capital.
That means designing structures that share risk appropriately.
Some of the most effective models include:
Public-private co-investment - Government takes early-stage risk; private capital scales.
Blended finance vehicles - where government provides first-loss or concessional capital to reduce risk premiums.
Aggregation platforms - pooling smaller assets — like EV charging, distributed energy, and industrial retrofits — into institutional-scale investment vehicles. This is how we are going to fund the missing middle – those sectors of the economy which need to decarbonise, but which are too capital intensive for venture and too nascent to be infrastructure.
Long-term contracting and offtake underwriting - providing revenue floors that reduce merchant volatility.
Industrial precinct models - where enabling infrastructure — transmission, firming, ports, shared services — is coordinat-ed to reduce cost per project.
These are not abstract ideas.
They are proven global models.
And they are precisely the kind of structures that institutional capital responds to.
9. Why private capital should deploy now
For investors, there is a strong case for deployment now.
Because the transition is producing scarcity value.
Grid connection and firming are becoming scarce.
Transmission corridors are scarce.
Permitted, bankable projects are scarce.
That means early movers are not just supporting the transition — they are positioning themselves in the highest-demand part of the value chain.
Second, electrification is driving structural demand growth.
This is not a cyclical story. It is a multi-decade growth story.
Third, global policy momentum is not going away.
Markets will evolve, but the direction is clear: carbon constraints will tighten over time.
Fourth, investor mandates are shifting.
Portfolio decarbonisation is now embedded in the strategies of major asset owners and global capital pools.
And fifth, this transition will create the next generation of industrial winners.
Those who invest early will help shape the platform.
Those who wait will pay higher entry prices.
10. The call to action
So let me close with this.
Australia’s 62–70% target by 2035 is ambitious. But it is also an invitation.
An invitation to investors to build the next generation of Australian infrastructure and industry.
The transition will succeed if we can translate ambition into investable opportunity – at scale.
That requires:
- policy durability
- credible price signals
- investable revenue frameworks
- streamlined delivery systems
- and clear sector priorities
If we get those settings right, capital will respond. Not reluctantly. But competitively.
Because in a world racing to net zero, the prize is not just emissions reduction.
The prize is industrial competitiveness.
The prize is energy security.
The prize is long-term economic leadership.
And that is what a future made in Australia should look like.
And it’s a future we can realise — if we choose it.
Thank you.