Understanding Australian Infrastructure Carbon Reduction Initiative 2 Understanding Australian Infrastructure Carbon Red | Page 12

Australia and the Asia-Pacific
Green Finance State of the Market (SoTM) Australia 2019 reports that cumulative domestic green bond
issuance reached AUD15.6bn (USD11.6bn) as of 30th June 2019, placing Australia third in the Asia-Pacific
region behind China (USD91.5bn) and Japan (USD12.9bn) with South Korea at fourth (USD6.2bn).
Australia is tenth overall in cumulative global green bond rankings as of 30 June 2019. Total domestic
issuance to date includes 35 deals (some comprising multiple tranches), from 15 issuers.
The 2019 GIIO report also points to Australia’s potential role as a green finance hub for Asia-Pacific in the
2020s, leveraging the green financial expertise of the banking sector and the ready capital and
infrastructure investment experience of the superannuation sector, as nations in the region seek to meet
their combined infrastructure, energy, development and climate goals.
We briefly pondered on this prospect way back in December 2016 and enlarged it on further in 2018. The
opportunities for engagement remain.
Policy points for the 2020s
State of the Market puts forward a number of policy considerations for the 2020s including:
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Repeat Sub Sovereign issuance from state-based Treasury Corporations to advance infrastructure,
resilience, congestion and emissions goals and act as a signal to markets, regulators and potential
issuers.
Building sustainability into the financial system including implementing recommendations from
the Australian Sustainable Finance Initiative (ASFI) and measures to promote green finance and
brown to green transition.
Increased support for domestic green bonds and green infrastructure investment from the
superannuation sector and a stronger foreign policy focus by government on green finance
opportunities in the Asia-Pacific.
The Last Word
Notwithstanding limited progress in energy and state-based actions, federally, Australia has yet to
develop a substantive framework of mitigation and adaptation policies to fully address the coming climate
emergency and create climate resilience.
This is despite a surfeit of clean energy options and exposure to twin 21st-century climate based economic
risks: A major global exporter of high carbon energy coupled with an emissions-intensive domestic
economy, slow to progress on transition measures.
On the other hand, few nations enjoy such confluence of positive domestic circumstances: a robust
banking sector with green finance expertise, a superannuation sector with proven infrastructure
capability and willingness to explore new investment models, and widespread community support for
increased government borrowing combined with new infrastructure investment partnerships.
The 2020s beckon,
Till next time,
Climate Bonds
We launch the 2019 New Zealand Green bonds and Infrastructure report on Friday 30th in Auckland. You
can still register here.