A successful low-carbon transition requires a thorough understanding of the options, opportunities and challenges. It also needs long-term policy signals to encourage the investment decisions needed for a decarbonised economy. Australia would not be alone in such an effort; a global effort is a fundamental prerequisite to enable decarbonisation with prosperity. That’s why it’s important for Australia to define it’s commitment by supporting global initiatives such as the New York conference. For senior ministers to undermine such efforts by proffering “Action Plans” that are clearly inadequate simply tells the rest of the world, particularly our major trading partners, that Australia is not serious.
Work by Climate Works Australia finds that Australia can achieve net zero emissions by 2050 and live within its recommended carbon budget, using technologies that exist today, while maintaining economic prosperity. Major technological transitions are needed in some industries and many activities, but no fundamental change to Australia’s economy is required. Economic activity and Australian incomes keep rising. The economy grows by 150% to 2050, while net emissions fall to zero and energy sector emissions are reduced by more than four fifths.
In the illustrative pathway, ambitious energy efficiency in all sectors leads to a halving of the final energy intensity of the economy between now and 2050. Low carbon electricity is supplied by renewable energy, or a mix of renewable energy and either CCS or nuclear power. Electricity prices increase at moderate rates and then stabilise, and are more than offset by the savings in electricity from energy efficiency, so average household electricity bills decline over e (not taking into account switching cars and heating to electricity).
The technologies required for decarbonisation are currently available or under development. Ongoing commercialization, enhancement and integration will improve their cost competitiveness and performance. Experience with technological change, such as the rapid fall in costs of solar cells seen in recent years, suggests that there will be positive surprises along the way. The analysis shows that deep decarbonisation requires neither substantial lifestyle changes nor large changes in Australia’s economic structure. Australia retains its international advantage in primary industries including mining and agriculture. While some technologies and activities decline, others expand and contribute to continued economic growth. The largest changes occur in the energy and land sectors. Australia’s rich renewable energy resources could make it an energy superpower in a world where clean energy dominates. Together with substantial potential for geological sequestration and vast land available for carbon forestry, this creates economic opportunities for Australia in a decarbonised world.
Deep decarbonisation is possible for Australia, requiring transitions in how energy is produced and used, and also how land is managed to sequester remaining emissions. Shifts of this nature have been made in the past, Australia’s economy has demonstrated that it is flexible, adaptable and resilient, and has a long history of benefiting from new trends in the global economy. In the past, Australia’s prosperity has been built on gold mining and wool production, today the main export drivers include tourism, education, coal production and minerals extraction. The transitions were made without damage to Australia’s overall economic fortune. In fact, adapting to new circumstances historically has benefited Australia. Many factors will drive change in Australia’s economy over the next decades. Likely global growth areas that Australia can benefit from are agribusiness, gas, tourism, international education and wealth management. Decarbonisation would be just one of many influences.
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