- New report from Deloitte Access Economics shows that using Australia’s natural advantages in solar, wind and critical minerals could add up to $435 billion to the national economy by 2050
- Requires coordination and alignment of both public and private markets and significant additional investment for Australia to take full advantage of global decarbonisation
Australia can reap a $435 billion economic dividend by capitalising on the global race to achieve net-zero emissions, according to a new report commissioned by NAB from Deloitte Access Economics (DAE).
‘All Systems Go: Powering Ahead’, examines how to lower the cost of transition for Australia and grow new export opportunities to replace emissions-intensive activity as the world decarbonises. It shows a failure to do this will hold Australia back from the growth opportunities presented by the transition and that under today’s net-zero policies Australia’s existing exports are projected to decline by $270 billion out to 2050.
The report, however, also identifies that renewable energy, green hydrogen, critical minerals, and enhanced metals manufacturing can be key drivers of Australia’s potential future economic growth, more than offsetting a slowing, or stopping, of global demand for high-emissions commodity exports.
Achieving the $435 billion dividend will require Australia to build new infrastructure on an unprecedented scale for our country. The infrastructure program will need to involve an estimated 10,000km of new transmission, 44 gigawatts of new renewables and 15 gigawatts of firming capacity this decade, according to industry experts.
The All Systems Go: Powering Ahead report shows investment is required to drive innovation in new technologies, development of skilled workforces and growth across the supply chains of green industrial sectors, to increase their output by $280 billion and create new export opportunities of $420 billion by 2050.
The findings build on the first DAE All Systems Go report in 2022, which said Australia’s economy needs to be structurally different and requires significant reallocation of capital investment to transition to net-zero.
NAB Chair Philip Chronican said: “Australia has two challenges: getting to net-zero and replacing our existing export industries as global demand falls away. The harsh reality is that if we only hit our targets without replacing exports, we will become a materially poorer nation.
“All Systems Go: Powering Ahead demonstrates how we can go further and secure our nation’s future economic prosperity by becoming a major exporter of what the world needs to decarbonise.
“Australia’s natural endowment of land, sunshine and wind puts us in a strong starting position.
“Significant coordination of public and private planning and investment is also required to transform and replace industries that have been at the centre of our historic economic growth and create a new green industrial base.”
Mr Chronican added: “The scale, complexity, and cost of these challenges is profound and the timeframe for achieving them is becoming increasingly pressurised.
“But we can and we need to. The cost of inaction or too little action is far too great.”
NAB Group CEO Ross McEwan said: “Australia has made significant progress in the last 12-months, however much more needs to be done.
“First and foremost, we need to build, build, build. 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.
“Australia can reap the benefits of innovation and productivity growth that will lift Australia’s supply-chain competitiveness and put the country on a strong footing as our traditional exports are replaced.”
Mr McEwan added: “As Australia’s biggest business bank, we are here to help fund the transition and support our customers with the capital they need to invest in new technology and ideas that future-proof their business and deliver new ways to grow.”
During the past 12 months, since the first All Systems Go report, Australia has made progress toward achieving net-zero including expanding the Safeguard Mechanism, legislating a 2030 emissions reductions target, federal and state government renewable energy investments and more businesses making decarbonisation commitments and progress.
- The full report is available to download on the right-hand side of this page.
- Previous DAE analysis for the Business Council of Australia found inaction on climate change would cost Australia’s economy $3.4trn in lost GDP over the next 50 years. Compared to this path of inaction, the economic dividend of reaching net zero was a gain of $890bn to Australia’s economy. Based on this, All Systems Go (2022) determined significant capital reallocation is required to get that $890bn dividend. Australia had to spend more and spend what it otherwise would very differently to be net zero.
- The 2022 ‘All Systems Go: Transforming Australia’s Economy to Grow’ report is available via NAB News.
- ‘Green industrial activity’ refers to the supply chains and industry capabilities of renewable energy, green hydrogen, critical minerals, and metals manufacturing
- The 82% renewables target was modelled by the Australian Energy Market Operator in the Step Change scenario of its 2022 Integrated System Plan.