Australia and the US Sign the Clean Energy Pact

Australia and the US Sign the Clean Energy Pact

The United States and Australia recently signed the Climate, Critical Minerals, and Clean Energy Transformation Compact to combat climate change and boost clean energy efforts. This partnership aims to strengthen the bilateral relationship between the two countries and make climate and clean energy a central pillar of their alliance. By leveraging their strengths in renewable energy, critical minerals, and technological innovation, the United States and Australia intend to deliver sustainable and resilient solutions to the world.

Importance of Cooperation in Addressing Climate Change

The compact emphasizes the value of collaboration between the US and Australia in combating climate change. Both countries recognize climate change as a significant threat to global stability and prosperity, and they acknowledge the urgent need for collective action to mitigate its impacts. They emphasize the critical importance of accelerating the global clean energy transformation, promoting renewable energy adoption, and pursuing sustainable solutions to combat climate change.

United States Support for Australia’s Renewable Energy Aspirations

Australia’s ambitions to emerge as a global leader in renewable energy are supported by the United States. Recognizing Australia’s abundant renewable resources, including solar, wind, and geothermal energy, the United States encourages and facilitates investment, technological collaboration, and knowledge sharing to harness Australia’s clean energy potential. Australia, in turn, welcomes the United States proactive steps in transforming its energy and industrial base towards cleaner and more sustainable alternatives. Australia recognizes the United States as a key global player in clean energy innovation and commends its efforts to transition away from fossil fuels and embrace renewable energy sources.

Goals of the Compact

The compact’s objectives include strengthening collaboration under the Climate, Critical Minerals, and Clean Energy Transformation Compact and building a shared energy, clean energy, and industrial basis as a key tenet of the alliance. Delivering key minerals and renewable energy technologies that are secure, resilient, and sustainable is a joint goal of the United States and Australia. They will coordinate policies and investments to build clean energy supply chains, create markets for cutting-edge technology, and meet the Indo-Pacific region’s energy demands while advancing global prosperity.

Specific Actions for Achieving the Goals

To achieve these goals, specific actions will be taken. Working groups and a ministerial-level task force will focus on critical minerals, facilitating collaboration and knowledge sharing. An action plan will be developed to encourage industrial collaboration and progress toward climate goals, promoting the adoption of clean energy technologies and fostering sustainable practices across industries. Support will be provided to vulnerable communities impacted by climate change, and efforts will be made to effectively enhance the region’s capacity to address climate challenges.

Potential Benefits for Australia

The compact offers potential benefits for Australia, including eligibility for grants or incentives under the US Inflation Reduction Act. Australia may tap into tax credits, grants, or other financial support programs offered by the United States, which can accelerate clean energy projects and boost the presence of Australian companies in the global clean energy market.

Need for Improved Climate Strategies

However, independent analysis suggests that the United States and Australia need more to address climate change adequately. To align with the objectives of the Paris Agreement, both nations need to make significant improvements in their climate strategies. The evaluation highlights the urgency of taking more ambitious actions to mitigate greenhouse gas emissions, transition to renewable energy sources, and enhance overall climate resilience.

AUKUS Partnership and Defense Collaboration

In the AUKUS security partnership context, President Biden has designated Australia as a “domestic source” under the Defense Production Act. This designation streamlines collaboration and investment in critical minerals and technologies between the two countries, aiming to enhance the resilience and security of critical supply chains and foster closer ties in defense industries. The designation aligns with efforts to update export controls and improve technology sharing under the AUKUS partnership, strengthening collaboration in defense capabilities, emerging technologies, and regional security. This step demonstrates a commitment to deepening the partnership between the United States and Australia in defense, critical minerals, and advanced technologies to enhance national security and economic prosperity.


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