Australia’s economy could stand to lose hundreds of billions of dollars if it does not successfully navigate a transition to clean energy in the coming decades.
New research from NAB and Deloitte Access Economics has revealed what Australia stands to gain or lose as the world hurtles toward decarbonisation and lower emissions.
If Australia capitalises on the global race for net-zero emissions, it can reap a $435 billion economic reward by 2050 according to Deloitte.
“From 2030, Australia can take advantage of this transformation and surging global demand created by the need to rapidly replace emissions-intensive assets...Green industrial exports are what drive a net increase in Australia’s total exports – they not only replace lost economic output from emissions intensive activity but create new growth,” the report reads.
However, this will require Australia needing to build new infrastructure “on an unprecedented scale for our country”.
This includes an estimated 10,000km of new transmission, 44 gigawatts of new renewables and 15 gigawatts of firming capacity this decade.
Though the transition costs will be “significant”, the report argues that without them, Australia will not only fail to reap the rewards of the energy revolution, but will see its exports decline by $270 billion by 2050 under today‘s net zero policies.
The report highlighted export opportunities in renewable energy, green hydrogen, key minerals, and enhanced metals manufacturing to “drive” Australia’ future.
“This expanded economic capacity in green industries supports an increase to Australia’s exports of about $420 billion by 2050,” the report reads.
The country needs to make the most of its natural endowments as we make the energy switch according to NAB Chair Philip Chronican.
“Australia has two challenges: getting to net-zero and replacing our existing export industries as global demand falls away,“ he said
“The harsh reality is that if we only hit our targets without replacing exports, we will become a materially poorer nation.”
Despite the high cost, Australia needs to “build, build, build” to secure the economic benefits from the clean energy boom according to NAB Group CEO Ross McEwan.
“To do this, we need investment and labour to drive the projects, shorter lead-times, as well as improved consultation and a consistent national framework that delivers major green infrastructure projects that have widespread community support,” he said.