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Australian businesses must find the cheapest, most-effective pathway to decarbonise in the absence of a national target or policy to reach net zero emissions, a recent CEDA livestream heard.
“Businesses need to take a strategic view [of net zero emission targets] and think about the pivot and the transformation that’s required,” Deloitte Access Economics Head and Partner, Dr Pradeep Philip told a CEDA audience.
“Our modelling suggests the cost of inaction would, by 2070, be a loss of GDP of around six per cent – that’s about $3.4 trillion in today’s dollars and about 880,000 jobs lost.
“In contrast, taking action on climate change would result, by 2070, in GDP growth of around 2.6 per cent and around 250,000 jobs a year.”
Dr Philip, who also sits on CEDA’s Board of Directors, warned that climate change was the new economic baseline rather than just a scenario.
Dr Philip was joined by author, economist and Sunshot Energy Co-Founder, Professor Ross Garnaut AC and Star of the South Chief Executive Officer, Casper Frost Thorhague for a livestream discussion on the economic opportunities in shifting to net zero carbon emissions.
“We need market mechanisms where people who are doing the action on emissions are rewarded by the market value of reducing carbon,” Professor Garnaut said.
“We can do a fair bit in the current framework, mainly because our advantages are so large, but we’d go very much faster if we joined the rest of the world in a firm commitment to zero emissions by 2050.”
Professor Garnaut said Australia had huge economic advantages in a zero-emissions world economy.
“We’ve got by far the richest combination of solar and wind resources in the developed world, even stronger on a per capita basis,” he said.
“We’re the natural place to process Australian minerals in a zero-emission world, using zero emission hydrogen and electricity.”
He noted that Australia was the main exporter of numerous minerals with high energy needs for processing, and that the economically rational place to process them in a zero-emissions world would be here.
Mr Frost Thorhague, who leads Australia’s first proposed offshore wind project, said there was a strong investment appetite for projects tackling climate change, particularly in the renewable energy space.
“When we raise capital for renewable energy projects, it’s clearly where people want to invest money,” he said.
Mr Frost Thorhague said people were investing in renewable energy technologies and generation because it was seen as the “safe future”.
Summing up the discussion, Dr Philip said action on climate change was consistent with economic growth and jobs.
“To tackle this debate, we need to get the economics right and bring the financials and climate science together,” he said.
“The price we are paying is that the window for transition is narrowing quickly and the opportunities we should be setting ourselves up for are diminishing.
“There are costs and there will be some losers, but we’re all losers if we fail to act.”