Labor conference: Biden-style fund ‘the key to our energy transition’

Labor will consider funding similar to Joe Biden’s Inflation Reduction Act to drive investment in renewable technology.

Climate Change and Energy Minister Chris Bowen speaks at the ALP national conference in Brisbane on Thursday. Picture: Dan Peled / NCA NewsWire

Labor is forming a plan to replicate Joe Biden’s centrepiece Inflation Reduction Act that is set to unleash $US3 trillion worth of investments in renewable energy technology.

Passed on the floor of Labor’s national conference in Brisbane, a motion led by the Electrical Trade Union pointed to the 2 to 3 per cent of GDP committed to in the US, Europe and Canada as a potential guide to funding and facilitating the transition.

The motion was backed by Climate Change and Energy Minister Chris Bowen, who said the US Inflation Reduction Act, passed by congress a year ago, was the most important environmental legislation in a generation.

He said the government was forming its own response to the US legislation, which could also be accessed by Australian businesses.

The motion followed an earlier commitment to investigate a carbon tariff and ensure clean energy products like solar panels, batteries and wind turbines were made in Australia.

“The Inflation Reduction Act is the most significant development for climate in our living memory, probably more consequential than the Paris Accord,” Mr Bowen said.

“But it’s our job to make sure the emissions reduction that comes about is additional (and) not distorting activity that otherwise would have happened here or elsewhere.”

Mr Bowen said shifting away from fossil fuels to renewable energy was the “biggest economic transition this country has been through in modern times”.

The Inflation Reduction Act offers tax credits, subsidies and grants for businesses involved in transitioning to renewable energy.

The cost of the US offsets, which are uncapped, was initially estimated by US treasury to cost about $US390bn, but a recent report by investment bank Goldman Sachs estimated it would cost the government $1.2 trillion.

Goldman Sachs has also forecast the legislation would facilitate about $3 trillion in investment in renewable energy technology.

Key to the policy shaped by Labor branches was ensuring that projects and opportunities spawned from infrastructure transformation provided “optimal outcomes for all Australians”.

The success of the transition will be underpinned by workforce readiness, local procurement, clean energy supply chains and community engagement and acceptance, the motions said.

The energy and environment debate at the national conference on Thursday saw the Labor Environment Action Network fail in its bid to phase out native forestry.

As a compromise, Agriculture Minister Murray Watt agreed to review the policy before the next election to balance the “carbon value” of native forests and demand for timber.

While unions are pushing for the government to process critical minerals in Australia, Resources Minister Madeleine King talked up the future of exporting them.

She said Australia was in the box seat to benefit from the US Inflation Reduction Act as there was growing demand for minerals that could be used to make batteries and renewable products.

Australia – with a relatively small population – could not afford the capital injection of an industry support package on the scale of Mr Biden’s legislation, she said.

ETU national president Michael Wright likened the energy transition to the industrial revolution: “This is a singular opportunity to bring down the cost of living for working people and lower and middle income families in our country.”

Delegates did not back an AWU call for a tax on critical minerals, but they did support a review of the forestry industry.