In his post-election speech, newly-elected Prime Minister Anthony Albanese noted that Australia can "take advantage of the opportunity for Australia to be a renewable energy superpower".
A Labor government has committed to slashing carbon emissions by 43% by the year 2030, compared to 2005 levels.
But what impact is this set to have on financial markets? And what tickers are set to benefit? Let's take a look.
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Clean and renewable energy on the agenda
It appears for the first time in at least 70 years that around one-third of Australians voted neither for Laboror nor the Coalition.
The Greens received roughly 12% of the vote while the so-called teal independents have taken a swathe of formerly Liberal seats, campaigning on a platform of greater climate action.
This new representation in federal parliament is set to have far-reaching impacts on Australia's stance on climate change.
Bloomberg journalist Ben Westcott, speaking on Bloomberg Day Break Australia on Monday, concurs.
Commenting on the outlook for Australia's climate emission reductions, he said: "[Now Prime Minister Anthony] Albanese went to the election with a promise of about 40% climate commission cuts by 2030 but the Greens Party wants 70%, the Independents want 60%."
Westcott said it remains to be seen how this will play out in climate policy but it may be that the Labor government could "be forced to take tougher action to cut emissions".
The regime change has been welcomed by The Clean Energy Investor Group (CEIG), a not-for-profit advocacy organisation representing institutional investors.
The group's CEO Simon Corbell said any shift in policy towards renewables is "deeply consequential for clean energy investment opportunities in Australia". Corbell told The Australian:
The message from the incoming Prime Minister is clear.
He wants Australia to be a renewable energy superpower. And that will send an enormously positive signal, right across the sector, about the opportunity in the Australian market.
We now have a national government that will not simply grudgingly accept the energy transition, but which will enthusiastically embrace it.
And that's enormously positive for investor sentiment.
What ASX shares might benefit?
With the push towards renewable energy imminent, several names within the domain are now front and centre.
ASX shares such as Infratil Ltd (ASX: IFT) and Genesis Energy Ltd (ASX: GNE) come to mind. Each stock has finished 5% and less than 1% in the green over the past five days of trading respectively.
More 'traditional' energy companies with a renewable footprint are contenders too, such as Origin Energy Ltd (ASX: ORG) which has ownership of substantial solar power generation assets.
Secular names such as Hazer Group Ltd (ASX: HZR) also spring to mind given its focus on research into alternative power sources.
Except for Origin – with its 29% gain this year to date – each of these ASX shares has been beaten down in 2022, trading in the red during that time.
In wider market moves, the S&P/ASX 200 Index (ASX: XJO) is trading 0.04% higher early on Tuesday afternoon.
