Climateworks supports the government’s creation of funds such as the Powering the Regions Fund to support rapid economic transition to a net zero emissions economy.

This fund is part of a suite of policy measures that can prepare Australia to thrive in a net zero emissions world and position our natural assets in mineral resources and renewable energy capacity.

The government has an opportunity to design the PRF to support Australia’s climate policy priorities, emissions reductions targets and long-term goal of net zero emissions in line with the Paris Agreement.

This is especially urgent given the window to keep global warming within 1.5 degrees is open, but narrowing.

Climateworks recommends that:

  • The PRF includes an explicit objective to meet Australia’s emissions reductions targets, in line with the Paris Agreement.
  • The criteria for funding includes that actions will lead to transformative change in line with sectoral or regional emissions reductions pathways in line with Australia’s emissions reductions targets.
  • Funding is subject to an expectation that recipients have robust net zero emissions transition plans or explain the absence of such plans.
  • PRF funding be put towards the development of renewable energy industrial precincts (REIPs) through a national place-based industrial decarbonisation program to coordinate the design and implementation of REIPs across the country. We recommend implementing the national program with two levels of governance: Transition Authority (or equivalent), administered by a secretariat at the federal level with an advisory group comprising state and territory departmental officials, and State- and territory-based coordinating bodies (within existing frameworks where possible or as separate entities).
  • PRF funding be used through a co-investment model for implementing REIPs, alongside funds from other relevant federal programs and agencies (e.g. National Reconstruction Fund, ARENA and CEFC) and state and territory programs.

Climateworks also recommends the following complementary actions:

  • Develop sectoral pathways for emissions reductions aligned with the Paris Agreement to guide the allocation of funding
  • Finalise the Australian sustainable investment taxonomy as part of the Sustainable Finance Strategy currently in development
  • Alignment and cooperation with state and territory policy to enable greater gains and opportunities to leverage funding available in those jurisdictions.

Climateworks supports the creation of the PRF as a key part of a broader package of emissions reduction and industrial and innovation policies.

We encourage the government to design all aspects of the fund in a way that maximises Australia’s opportunities to thrive in a net zero emissions world.