Why Australia’s $5 billion Net Zero Fund needs to be more than an incentive for mining billionaires to do better

The new $5 billion Net Zero Fund, announced last week as part of the Federal government’s plan to meet a 61% -70% emissions reduction target, could be the most important lever Australia has to accelerate our transition to net zero.

But unless it is designed to take risks and back first-of-a-kind climate innovations, we risk missing the moment and squandering this intergenerational opportunity.

The largest dedicated climate tech fund in Australia today is a mere $125 million. At $5 billion, the Net Zero Fund could eclipse every existing pool of climate capital, if it is designed to be catalytic*.

The fund is scoped to support decarbonisation of large industrial facilities and clean tech manufacturing.  However, without a risk-tolerant approach and supporting new industries and innovations, it risks duplicating what the Clean Energy Finance Corporation (CEFC), which already has $18.3 billion in commitments, and private markets are already doing.

If we are serious about reaching net zero and ensuring a liveable planet, we need to fund like we’ve never funded before. But this isn’t just because we want to avoid the worst a 3°C warmer planet throws at us, it’s also the most significant economic opportunity we have, and ours to lose.

Australia consistently produces more unicorns per VC dollar invested than any other country. That means every catalytic dollar deployed through the fund has the potential to generate outsized multiplier impacts across our innovation ecosystem, generating jobs and boosting the economy, and mostly in regional areas.

Second to India, Australia is the fastest-growing startup ecosystem in the world, valued at US$360 billion, and with climate tech consistently ranked as a top investment vertical, no doubt the Net Zero Fund will crowd in and attract offshore private capital, if it takes on the early-stage risk.

With the lion’s share of critical minerals, natural capital, abundant and cheap renewable energy, formidable agtech, world-class research institutions, the fourth largest pension pool in the world, an authentic Aussie can-do attitude, and a fast-growing ecosystem, Australia can be world-leading in the climate innovation economy, if our capital plays a catalytic role.

Drawing from the existing $15 billion capital committed to the National Reconstruction Fund (NRF), you have two weeks left to have your say and help inform the design and scope of this fund, during school holidays and over long-weekend!

• Charlotte Connell is innovation and Investment director at Greenhouse, on the board of Surfers for Climate, and a mum.