Australia’s energy future is at a turning point. With global markets moving quickly toward renewables and the Prime Minister highlighting climate ambition at the UN General Assembly, Australians need to better understand how this aspiration can become a real national advantage.  

Beyond cutting emissions, accelerating the transition means lower household energy bills, stronger energy security and thousands of new jobs in regions most at risk from coal decline. A robust carbon pricing policy, faster investment in renewables, a stronger and more streamlined regulatory framework, policy stability, as well as global talent attraction – these are all crucial to accelerating Australia’s renewable energy transition. At a time when US climate policy is shifting, Australia has an opening to lead rather than follow in the global energy transformation. 

An opportunity for global leadership – building on domestic investments

Australia is uniquely placed to become a global clean energy powerhouse and a leading exporter of green technologies, thanks to its world-class solar and wind resources and vast land area. In recent years, Australian climate commitments were lagging, but stronger policy commitments are finally emerging – including a range of robust climate policy measures.  

The Commonwealth has legislated a target of Net Zero greenhouse gas emissions by 2050 and set an interim goal of a 62 to 70 per cent reduction below 2005 levels by 2035, building on the 2022’s Climate Change Act and its 43 per cent reduction target for 2030. In 2024, renewable energy supplied 36 per cent of Australia’s electricity, with solar making up around 18 per cent and wind 12 per cent.  

A rapid scale-up of renewable energy (alongside grid modernisation, storage and other enabling technologies) is central to reach this goal. For example, the Rewiring the Nation program is aimed at modernising the electricity grid and facilitating rapid deployment of renewables and storage.  

Meanwhile, securing the required investment to accelerate this transition is still a great challenge. Australia has expanded the capabilities of the Clean Energy Finance Corporation and other investment mechanisms, such as emission reduction fund and domestic offsets regulative framework, to mobilise billions of dollars in low-emissions technologies.  

n the 2024-2025 budget, the Commonwealth committed $22.7 billion over the next decade to grasp opportunities as the country moves towards Net Zero and to secure Australia’s place in a changing global environment. These actions reflect a shift from ambition to implementation, signalling a commitment to both emissions reduction and economic opportunity through clean energy investment. 

Large scale solar has expanded rapidly, growing to 7 per cent of national electricity generation in 2024, while small scale solar generation has grown by an average of 21 per cent per year since 2015. Small-scale rooftop solar has more than tripled in output over the 7-8 years to 2023-2024, making Australia a global leader in household solar uptake. This momentum is backed by a $12.7 billion investment in renewable energy in 2024, marking the highest annual investment in renewable energy in Australia.  

Now, to accelerate this transition, Australia needs to attract further investment from international markets while recruiting and training more skilled workers. 

Investment and skilled migration: a strategic moment for Australia

With policy uncertainty mounting in major economies such as the US, investors and skilled workers are searching for stable, ambitious markets. Australia can attract both capital and talent.  

Global capital is highly mobile and flows where long-term policy certainty and natural advantage align. Australia has accelerated its renewables deployment. By tightening and strengthening its regulatory framework, expanding transmission and streamlining approvals, Australia can signal to investors that it offers the stability currently lacking in the US to help redirect clean energy capital to Australia’s large-scale clean energy projects. At present, there is uncertainty around the timing and sequencing of approvals, from the declaration of and access to renewable energy zones, to environmental and heritage assessments under the Environment Protection and Biodiversity Conservation Act and similar state laws, through to transmission and grid-connection approvals. 

The skills dimension is equally important. US policy volatility risks discouraging highly skilled engineers and researchers who were drawn to clean energy opportunities under the Biden Administration’s Inflation Reduction Act. Australia can now attract this talent by expanding its workforce development initiatives (e.g., The Clean Energy Generation), providing migration pathways for skilled workers and fostering collaboration between universities, research bodies, and industry.  

To take advantage of this opportunity, Australia has modified its migration strategy to attract skilled workers who can facilitate the country’s renewable energy transition. Also to prepare its workforce for this huge change, Australia has initiated a National Energy Workforce Strategy to develop the required skills and capabilities to reach net zero goals  and plans to invest $91 million over 5 years to support training and upskill workers to meet future industry needs. However, there is scope for Australia to further develop these initiatives to ensure that there is a sufficiently skilled workforce that allows the transition proceeds at the required pace. 

Carbon pricing: learning from Europe

Without a clear price on emissions, Australia may risk a slower and costlier transition. Numerous studies have shown that a well-designed carbon price can drive innovation and efficiency while using revenue recycling to support households and communities.  

Australia has a controversial history in carbon pricing: it introduced a carbon-price mechanism on 1 July 2012, which was subsequently repealed from 1 July 2014. While the policy’s economic impact remains contested, modelling suggests that linking the price to recycling mechanisms can offset negative effects.  

More precisely, if the additional tax revenue generated from a carbon price on the country’s largest carbon emitters were redirected back into the economy (e.g., through reduction in income tax, direct transfers to low-income families and investments that accelerate the renewable energy transition), this could offset potential economic burdens and enhance the policy’s overall effectiveness. This revenue-recycling approach enables the country to achieve both economic and environmental benefits from a carbon-pricing policy.   

The United Kingdom and Nordic countries show how smart climate policies can accelerate transition while maintaining public support. Australia can adapt these lessons to its own context. Putting a price on carbon while using the accumulated tax revenue to invest in renewable energy, plus other policies to induce behavioural change and increase the efficiency of fossil fuel consumption, has resulted in a fast growth in the share of renewable energy in total energy use in other countries.  

For instance, Norway implemented a carbon tax 30 years ago and has mainly used the tax revenue to reduce the dependence of the electricity sector on fossil fuels. Now, Norway’s electricity system is dominated by hydropower, which is largely low carbon. The country has the largest electric fleet in Europe. Carbon pricing policy in the UK has resulted in a significant rise in the share of renewable energy after the adoption of the policy, indicating that the policy can accelerate the transition to renewable energy.  

Another key lesson from overseas experience is the importance of supporting final consumers – primarily through income-tax reductions or targeted assistance for low-income households. Such measures help offset higher electricity costs resulting from a carbon tax on fossil fuels, thereby protecting household purchasing power and sustaining economic growth. 

Australia has a unique opportunity to accelerate its renewable energy transition by implementing a carbon pricing policy and taking advantage of political shifts abroad. Focusing on creating a stable climate policy framework, implementing proper climate policies, attracting skilled workers and capital in an era of unstable climate policy in the US, Australia can speed up its transition to renewable energy and become a leader in the world’s transition to low-carbon economy.  

Dr Mona Mashhadi Rajabi is a Research Fellow at the Centre for Climate Risk and Resilience in the UTS Business School. 

Professor Martina Linnenluecke is Director at the Centre for Climate Risk and Resilience in the UTS Business School. 

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