Climate Allies: Australia, The United States and the global energy shift

19.05.23 By and
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Australia and the United States have been security allies since the end of the Second World War. Today, both nations are cooperating to deal with the implications of a warming planet. Canberra and Washington have come to view the climate crisis as a threat to national security, and acting on climate change has become a key pillar of the Australia-United States alliance.

Working together to tackle the climate crisis is high on the agenda of the bilateral Australia-US alliance, as well as the Quad partnership. As this report explains, Australia and the US are increasingly working together to address the root causes of climate change – which will require both countries to cut greenhouse gas emissions as fast as possible – and to manage the economic and strategic implications of the global energy transition.

The United States has started to get serious about its transition to a clean energy economy. Last year, Congress passed the biggest-ever package of climate spending in United States history – the Inflation Reduction Act (IRA) – which allocates more than AU$520 billion1 to stimulate investment in renewable energy infrastructure and clean energy technologies. This has turbocharged the global clean energy transition, as major economies in Europe and Asia respond with their own support for clean energy industries.

For Australia, the IRA poses both opportunities and threats. Australia is a major exporter of critical minerals that are used in batteries and electric vehicles, and is set to expand mineral exports to the US and elsewhere. However, the IRA is also redirecting global investment to the US, making it harder to attract investment and skilled workers for Australia’s own energy transition. American incentives for new clean energy industries also pose a challenge for Australia’s emerging clean energy exports.

Key Findings:

1. The climate crisis is a national security threat for Australia and the United States (US)

2. Australia and the US are cooperating to ensure energy security in the Indo-Pacific region

Climate Allies Report

3. US investment in clean energy industries has turbo-charged the global energy transition. This represents an opportunity and a challenge for Australia

4. Australia is well-placed to become a clean energy superpower – but we must act fast