Infrastructure Sustainability Council Connect Conference speech
The Hon. Matt Kean
Chair – Climate Change Authority
Check against delivery.
May I begin by acknowledging the Jagera people and the Turrbal people as the Traditional Custodians of Meanjin, whose lands we meet on today.
I’d like to pay my respects to elders, past, present and emerging, and extend that respect to any First Nations people here with us today.
And thank you to the Infrastructure Sustainability Council for inviting me to return, having addressed this Conference previously.
I trust that it means that I made a good first impression!
Infrastructure is often talked about as a pipeline of projects. But it’s really more like a blueprint for how our economy runs, how our communities function, and, increasingly, how resilient we are in a changing climate.
And like any blueprint – the decisions we lock in at the design stage determine what gets built and what we’re left living with for decades.
It was soon after I’d stepped into the role as Chair that the Climate Change Authority released its Sector Pathways Review.
As I said at the time, if infrastructure is the blueprint, then decarbonising it is fundamental in helping Australia meet its emissions reduction targets, ensuring our economy remains productive and competitive, and helping our communities to become more resilient to the risks we can already see.
And just to be clear, we weren’t contemplating future possibilities.
We were focused on the here and now.
Once the blueprint is set, decisions lock in emissions, costs and risks for decades.
That’s because we’re often delivering long-life assets or networks that will shape and determine outcomes for the next 30 or 40 years, or sometimes more.
I’m particularly proud that some of the policy thinking in this space commenced during my time as Treasurer, Minister for Energy and Minister for Climate Change in the NSW Government.
As a state with a pioneering infrastructure pipeline valued at over $110 billion at the time, the scale of the opportunity was enormous.
Changing how NSW procured and built infrastructure helped drive down emissions.
So we looked at it from every angle – measurement, design, materials, transparency and procurement – to drive down embodied carbon.
It gave us a comprehensive plan to reduce emissions across all stages of a project – construction, operations and end-of-life waste disposal.
It sent clear signals to the market and supply chains.
And we’re already seeing what that looks like in practice. On projects like Sydney Metro, carbon targets are now built directly into procurement, helping to drive around a 20% reduction in construction emissions compared to business-as-usual, through things like low carbon concrete, recycled materials and smarter design.
And on WestConnex, more than 98% of construction waste was recycled with concrete mixes incorporating lower carbon alternatives and more than 30,000 tonnes of waste materials reused from other industries.
Now, the current NSW Government has updated its Decarbonising Infrastructure Roadmap.
That’s a good thing, as we can never adopt a set-and-forget mindset.
But what excites me is seeing the wave of activity that has since taken place across the nation to build a contemporary toolkit.
And so much of it is about driving systemic change because we need to go beyond viewing infrastructure as a collection of projects.
A rail line here.
A road over there.
A water treatment plant somewhere else.
That’s not how the system works.
Energy, transport, water, communications-they are all part of a broader system that shapes how our economy functions.
That’s not just a collection of assets – it’s the system-level blueprint.
And if we want to decarbonise effectively, we need to act at that system-wide level.
The good news is that the evidence base and policy pathways for decarbonising infrastructure are growing.
For example, as of 2024, Australia has an agreed and consistent method of measuring embodied carbon in infrastructure.
The Technical Guidance has been agreed to by all jurisdictions.
It means infrastructure delivery agencies, their advisors, delivery partners and investors are working from the same standards and assumptions.
It means everyone is working from the same assumptions – improving business cases, reporting, and policy.
But even the best blueprint isn’t fit for purpose if it doesn’t account for the conditions it’s built for.
Effective adaptation and resilience are as much of a litmus test for policymakers. In effect, we’re having to revisit the assumptions in that blueprint.
Every dollar invested in climate adaptation can save up to $11 in recovery costs.
And the effects of a changing climate through more intense bushfires, floods and rising sea levels, are already upon us.
The National Climate Risk Assessment tells us the impact will be felt on lives and livelihoods.
For example, it identified that telecommunications assets are at high risk from increasingly severe and extreme climate hazards – especially in coastal areas.
The increasing incidence of extreme heat events will result in temperatures outside safe operating levels for energy infrastructure, forcing operators to increase outages through load shedding.
We’ve already seen how quickly that plays out. During the 2024 heatwaves, extreme demand and system stress have left more than 100,000 homes and businesses without power.
And when the system reaches its limits, operators have no choice but to step in and switch off parts of the grid to prevent a broader collapse.
Infrastructure Victoria also offered compelling insights in its report “Weathering the Storm: Adapting Victoria’s infrastructure to climate change”.
It identified that climate change could cost the State nearly $1 trillion by 2100 if it doesn’t act to reduce emissions and adapt its infrastructure.
As the report said:
“The benefits of investing in resilient infrastructure can outweigh the costs of repairing and rebuilding it after extreme weather events.”
The report made the important point that the State should manage the financial risks of climate change by including climate adaptation and resilience in its long-term financial management objectives for infrastructure.
This will help make the financial costs of climate change explicit, drive action and reforms, and allocate resources where they are needed most.
The Climate Change Authority also considered the risks to the homes we live in in last year’s landmark report “Home Safe: National leadership in adapting to a changing climate.”
Bushfires, cyclones and floods are already costing Australian homeowners more than $4 billion a year in cleanup and recovery costs.
There are already over 650,000 properties around Australia considered at high risk from one or more climate hazards.
That renders insurance either unaffordable or unavailable for many.
And over 3 million homes are projected to be exposed to some level of riverine flooding in the next 5 years.
In response, the report makes the case for fit-for-purpose standards, laws and regulations to prepare Australia for current and emerging risks.
The National Construction Code already sets minimum construction standards for new buildings and certain work on existing buildings, such as alterations or extensions.
But the Authority suggested that aligning its requirements with projected climate impacts could help make homes more resilient.
A simple case in point.
In recent years, both Cyclone Alfred and Cyclone Seroja threatened stretches of the Queensland and Western Australian coasts.
Their trajectory went well beyond the “cyclonic regions” defined in the Code, beyond where it currently requires buildings to withstand cyclone-strength winds.
So we need to consider how to adapt the Code to ensure more homes are built to withstand cyclones where they may hit in the future.
We should also empower Australians to make informed choices about reducing climate risks by giving them more information and resources.
It’ll help them decide where to buy or build a new home, whether to rebuild or relocate after a climate-related disaster, and what steps to take to reduce the physical risks of their home.
Now, for all the progress we’ve made in recent years, it’s by no means mission accomplished.
One of the observations the Authority made in our most recent Annual Progress Report was that governments need to get better at what they don’t always do well, and that’s coordinate on implementation.
Because even the best blueprint fails if the builders aren’t working to the same plan.
There is currently a commitment to develop a clear action agenda by the end of 2026 to embed adaptation across government and implement the priorities set out in the Government’s National Adaptation Plan.
The National Adaptation Plan expresses that nationally agreed principles for incorporating hazard and climate risk considerations in land use decisions at all levels is a key priority.
Successful implementation is going to require federal, state, territory and local governments to work in concert.
To focus efforts, the Authority has recommended legislating for the National Climate Risk Assessment to be undertaken every 5 years, and the National Adaptation Plan refreshed on the same cycle, at a minimum.
Climate risk information and data needs to be better coordinated and more consistent across jurisdictions.
Given the bulk of planning and land use decisions fall at the feet of state, territory and local governments, they need to be armed with the right information.
It builds on a theme we identified back in the 2024 Sector Pathways Review, which highlighted that slow and complex approval processes are a barrier to investment in major transition projects.
Delays in approvals and transmission delivery can increase project risk and raise the cost of capital.
Which is why the Authority has also placed a spotlight on the need for better coordination and financial support to de-risk investment for common user infrastructure.
There’s the chicken and egg dilemma.
Investors in electricity transmission, pipelines, ports and other assets need sufficient certainty that customer demand exists.
But customers want to know the infrastructure will be there, costs will not be prohibitive and that other barriers will be eliminated.
There’s no single solution, as the right financial instrument will depend on the risk and return profiles of both investors and taxpayers.
As Australia works towards $122 billion in investment by 2050 to fulfil the Government’s net zero ambitions, we will need to keep identifying and refining the models that appeal to institutional capital.
Co-funding vehicles through the Future Made in Australia policy, ARENA, the Clean Energy Finance Corporation and the Capacity Investment Scheme offer a clear path forward.
It reinforces how far and fast infrastructure has come as a sector in driving decarbonisation, both at a project and economy-wide level.
Policy practices that simply didn’t exist 5 years ago have become entrenched.
Governments and industry are working together to learn from what is working and what needs to be done next.
So if infrastructure is the blueprint for our future, the task ahead is clear:
- We need to design it deliberately.
- We need to build in a way that cuts emissions and strengthens resilience at the same time.
- And we need to make sure governments, industry and investors are working to the same plan.
Because the question isn’t whether we live with the consequences of today’s decisions.
It’s whether we’ve designed the right blueprint in the first place.
And I’m confident this sector can deliver it.
