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Better late than never: How can Australia’s new aid strategy address climate and security in the Indo-Pacific?

The Australian Senate at the Australian Parliament, Canberra

Australia’s new aid strategy, currently under development, should be at the vanguard of this effort. The inclusion of climate change as a central pillar of the new policy has been made doubly important given the failure of COP27 to agree on further emissions cuts, which means we are now tracking towards a far more dangerous 2°C world.

The Australian Strategic Policy Institute’s 2022 report studiously mapped out the effects of climate change in the Indo-Pacific region. These include food insecurity due to lower crop yields and reef die-off that will put fisheries in jeopardy, expanding Malaria zones and new zoonotic diseases à la Covid. Sea-level rise, shifting rainfall and increased natural disasters will mean less arable land and increased internal displacement. In some tropical regions, temperatures will reach levels at which humans will no longer be able to live.

At a guess there will be a drive amongst some officials and the NGO community to focus on food security, health, infrastructure adaptation and humanitarian assistance for natural disasters. There will probably be some increased effort around emissions mitigationall a useful, but predictable path for the Department of Foreign Affairs to tread.

Claiming leadership on climate and security

This predictability is a consequence of Australia’s coming late to the climate change party. Yet there is still a chance for Australia to carve out a niche. And that niche is as a leading actor and voice on climate and security in the Indo-Pacific. Here are three things Ministers Wong and Conroy could prioritise to realise this opportunity.

1. Help ignite the green energy transition.

Indo-Pacific countries have been slow to decarbonise energy production. At the same time, the IEA estimates that the region is expected to account for 60% of global increase in energy demand between now and 2040. Indonesia is already the world’s fifth largest emissions producer, with energy expected to outstrip deforestation as its primary source of emissions by 2030. Cheaper oil and gas may also incentivise developing countries to rely on such fuels for longer. In this context, there are important environmental reasons why supporting the energy transition makes sense. But the energy transition also promises greater energy security.

With Russia’s strategy of energy coercion currently at the forefront of European minds, the West expects energy independence to be a key benefit of the transition to renewables. This however, might not necessarily be the case for other regions. In an increasingly interconnected world, renewable energy offers the same coercive power. Some countries in the Indo-Pacific are increasingly concerned about growing influence over both energy production and transition infrastructure, for example in relation to China’s Global Energy Interconnection. This poses further challenges where production has the potential to disrupt shared resources upon which people’s livelihoods depend, such as in the case of water courses for hydropower productionthe Mekong being the most obvious example. Proliferation risks and geo-political dependencies could also be generated if states turn to nuclear power, currently on offer from both Russia and, as part of its pivot from funding coal-fired power stations, China.

A credible, flagship energy partnership could mark Australia out as a genuine partner on energy in the regionafter all, Australia will be going through its own transformation. A Pacific Energy Partnership, locally owned and led, creating economies of scale, could be a useful pilot for such an ambition. Australia could also serve as a rallying point for donor efforts in the region that are currently fragmented between the EU, US, UK and Japan, driving more transformative change through collaboration.

But Australia’s engagement should be more than just providing pathways for energy independence to countries in the region. Indeed, poverty reduction rather than geo-politics must remain the core driver of its aid programme. And in this vein, Australia’s aid programme can play an important role in making sure that the energy transition is an equitable one. This is critical as energy production is often the captive of elites in countries in the region, while those living in poverty are often the least able to tap into new technologies. This sort of work will help ensure that inequalities are not further entrenched. This work should be paired with efforts to improve the environment for private sector investment in renewables, as, in reality, it is private finance that will likely fund the vast majority of the $9.2 trillion needed per year to 2050 for the transition to happen globally.

2. Invest in conflict prevention, peacebuilding and better resource management.

Conflict and instability are likely to increase as climate change compounds existing fault-lines within communities and creates new ones over increasingly scarce resources. Nothing reverses development gains more than conflict. Countries like Vietnam, Cambodia and Myanmar already experience conflict over land. Diminishing water resources and dwindling fisheries can add to the potential for conflict. A combination of sea rise, a reduction in arable land, disasters and a rise in temperatures beyond those the human body can handle will also precipitate migration, primarily from rural to urban areas, thus increasing pressure on cities already under stress. Conflict prevention and peacebuilding as a response to such challenges, integrated with a focus on fairer more effective resource management, represents an important low cost, high-reward investment for Australia. This could take the shape of more effective water sharing agreements between municipalities, better community forest management or supporting dispute resolution mechanisms to ensure the equitable use of agricultural land between farmers and graziers.

As an extension of this work, Australia should also place an emphasis on maladaptation. The development of renewables infrastructure, given its use of land and other resources, can exacerbate existing conflicts, or generate new ones. Hydropower, in places like Myanmar, has played into pre-existing conflicts bringing increased instability to an already conflict-affected region. Another growing source of maladaptation is related to the extraction of ‘green minerals’, used in everything from wind turbines to EV batteries and necessary to drive the clean energy transition. This affects countries such as Myanmar, where mining operations have already led to violence, corruption and instability. For Pacific states, where resource competition has led over the years to both instability (Solomon Islands) and the resource course (Nauru), any windfall from deep seabed mining of green minerals or rainforest carbon credit deals, such as those in PNG, needs to be managed carefully to avoid inter-community tensions. Australia can also play an important role as a shareholder within the Asian Development Bank and Asian Infrastructure Investment Bank to ensure that renewables investments are alert to such considerations.

At a relatively low cost, peacebuilding interventions that promote conflict sensitive renewable energy infrastructure development and extractive operations will be crucial and should be a prerequisite for any Australian-funded investments.

3. Support Track-2 diplomacy.

There is a rapidly growing risk of interstate competition over fisheries and cross-border water resources, particularly in South Asia, the Mekong and South China Sea. While playing a formal intermediary role is probably unrealistic in a region that prizes its national sovereignty, there are contributions that Australia can make. Australia’s aid programme should focus on supporting Track-2 diplomacy, for example by strengthening existing dispute mechanisms such as the Mekong River Commission, while building out multilateral capabilities on resource disputes. It should also support research and analysis (environmental scientific as well as development-related) that could help find solutions in challenging contexts and equalise the balance where smaller states find themselves in negotiation processes with more powerful actorswhether that’s for finance, cross-border management of resources, or infrastructure development.

Often the relationship between Australian aid, trade and security interests can seem forced, and in some cases, counterproductivebut climate change stands out as a true exception. At the end of the day though, it is not this intersection that should be the driver of investment in climate and security issues, but the reality that a failure to do so will undermine all other aid investments, at a scale and in ways we have never experienced before. The aid review is the moment for Australia to seize this opportunity.


Julian Egan worked for the Australian Government Aid Programme and subsequently Department of Foreign Affairs and Trade for around a decade in a variety of roles with an emphasis on fragility and conflict. From 2014 to 2021 he was Director of Policy and Advocacy at global peacebuilding organisation International Alert. Julian is currently part of the National Security Master’s programme at King’s College London where he is cultivating a focus on climate and security related research and analysis.