It is now beyond doubt that the economic megatrends of digitisation and decarbonisation have only picked up steam through the COVID-19 crisis.
Best-practice economic stimulus accelerates existing trends in order to bring forward jobs and de-risk private sector participation.
When you follow the money in this budget, the federal government has committed over $3.5b towards initiatives that will help accelerate our transition to a more economically and environmentally sustainable future.
Some of these include:
- $1.4b in funding for ARENA;
- $250m to accelerate critical transmission infrastructure that will unlock more renewables;
- $1.5b to modernise manufacturing which increasingly means the electrification of our industrial base;
- $67m for microgrids to replace diesel generation in remote communities;
- $52m to increase energy productivity in homes and businesses;
- $190m to reboot our recycling sector; and
- Over $370m towards developing Australia’s hydrogen capabilities.
On the other side of the ledger, $53m has been committed towards gas development.
The clean energy commitments are a promising endorsement of the benefits of a clean economic recovery.
This marks the federal government’s first steps to align their policies with the calls from almost all business, industry, community, health and environment peak bodies to invest in an economy powered by low-cost, reliable, renewable energy. From the Business Council of Australia, to the Australian Industry Group and the National Farmers Federation, we are seeing business and civil society unite in their sensible calls for a clean economic recovery.
When faced with our greatest economic crisis in a generation, our government appears to have made the call that supporting and accelerating the transition to a clean economy makes economic sense.
This is the right decision, as the opportunity for Australia is enormous. There are trillions of dollars of private capital looking for clean projects to back. A global race is underway to be the friendliest and lowest risk home for that capital to be invested safely.
Europe, China, South Korea, Canada and New Zealand are amongst the many regions that have made the call to push hard on the decarbonisation trend and invest in a clean economic recovery.
Australia’s developed economy, good governance, educated population, trading relationships and world-leading renewable resources mean that we can reap the benefits if we seize this moment.
No doubt there are plenty more opportunities that Australia can take to move things along faster to the benefit of all Australians.
A scaled-up energy-efficiency home-retrofit scheme would create hundreds of thousands of jobs, increase the value of our homes and reduce energy bills. The adoption of electric vehicles and transport would reduce Australia’s dependence on foreign oil, increasing our resilience while lowering our emissions. Renewable Energy Industrial Precincts can be set up around the country to future-proof our industrial base and position Australia as a leader on zero-emissions manufacturing.
Economist Chris Murphy’s analysis of the Beyond Zero Emissions Million Jobs Plan shows that federal support for these kinds of initiatives would boost private investment by $25 billion annually, or nearly 2% of GDP and increase real wages by 2% out to 2035 – all without a significant increase in public expenditure.
It seems the Federal Government has recognised, both through the Technology Roadmap and through the support for a low carbon economy in the Budget, that now is the time to catalyse the industries that will modernise Australia’s manufacturing, construction and resources sectors. We have a chance to be an economic giant in hydrogen exports, in green steel and in rare earths production.
We welcome these initial steps down the road to Australia taking its place as a new energy superpower. Let’s get on with it.
Eytan Lenko is the Executive Chair of Beyond Zero Emissions, an internationally recognised climate and energy solutions think-tank.