The Guardian - Gay Alcorn
Australia has been warned it risks ‘drifting into the future’ if it fails to respond to challenges in a fast-changing world
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| Australia is facing challenges from the rise of Asia, rapid
technological change, climate change and the environment, changing
demographics, declining trust in institutions and business, and strains
on social cohesion.
Photograph: johan63/Getty Images/iStockphoto |
Australia
is at a crossroads. Drift towards a future of slow decline economically
and socially or, if action is taken now to address our most important
challenges, create a future of greater prosperity for all, globally
competitive industries and a sustainable environment.
That is the conclusion
of a major report bringing together the thinking of more than 50 leaders in business, academia, NGOs and the community sector, working with the
CSIRO to model alternative futures for Australia. The report is described as a “clarion call” for the nation.
The
Australian National Outlook 2019,
two years in the making, aims to “help kickstart a national
conversation about where Australia is heading”, says its co-chair, Dr
Ken Henry, the chairman of the National Australia Bank and former
secretary of the Treasury department.
Participants met as a group with the nation’s leading science agency, the
CSIRO,
to identify the most critical long-term challenges facing Australia and
what needed to change. They included senior leaders from Shell
Australia, the Red Cross, McKinsey & Company, Australia Post, PwC,
the Cochlear company, the Australian Bureau of Agricultural and Resource
Economics and Sciences, the Grattan Institute, major universities, the
Wentworth Group of Concerned Scientists and UnitingCare Australia.
Individuals included the former New South Wales premier Nick Greiner,
former chairman of the Australian competition and consumer commission
Allan Fels and co-chair of the report, the CSIRO’s chairman, David
Thodey.
The report concludes that while Australia has enjoyed almost three
decades of economic growth, with enviable social cohesion and strong
institutions, it risks “drifting into the future” if it fails to respond
to challenges in a fast-changing world. Those identified are the rise
of Asia, rapid technological change, climate change and the environment,
changing demographics, declining trust in institutions and business and
strains on social cohesion.
To deal with them and reach its potential by 2060, Australia must
make “key shifts” in five areas: an industrial shift, an urban shift, an
energy shift, a land shift and a culture shift.
The director of CSIRO Futures, James Deverell, led the project and
said the sense of urgency came from the participants, who gathered for
eight workshops, beginning with around 100 priorities for Australia
before identifying the most crucial.
“There was this strong sense that we need to take action now,”
Deverell said. “The group sees this as a clarion call, a call to arms
for action.
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| Dr Ken Henry says the Australian National Outlook report aims to ‘help
kickstart a national conversation about where Australia is heading’.
Photograph: Lukas Coch/AAP
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“When you look at the shifts, there’s a couple of things in common.
One is the need to focus on the long term, that these shifts are going
to play out over a generation or more, but that doesn’t mean we can kick
the can down the road and ignore them. The other one is the need for
strong leadership, for bold action.”
The report references the 1980s, when strong productivity growth was
driven by a consensus on economic reform supported by both major
parties, big business and unions.
The report does not give specific policy recommendations but suggests
the “levers” the country needs to pull to get the best outcomes. One of
its strongest conclusions is that there is no tradeoff between strong
economic growth and transitioning to zero-emission renewable energy, an
argument that has crippled political debate in Australia for more than a
decade.
In both scenarios modelled by the CSIRO – slow decline or what the
report calls outlook vision – almost all electricity is generated by
renewables by 2060 due to drops in the cost of renewables and the
decline in the demand for fossil fuels. The global disruption in the
energy market is underway, so whether the Australian government
encourages new coal-fired power stations or not, renewables will be
cheaper and replace them.
In Australia, most of the transition will happen between 2020 and
2040 as ageing coal-fired power plants are retired and replaced with
renewables.
“We’ve seen costs come down so much in solar and wind they are now
the low-cost solution,” Deverell said. “Once you hit a certain level of
renewables on the grid you need to add storage to the cost, but that’s
factored into our modelling and we see the cost of storage coming down
over time.”
Deverell said even if Australia continued its policy uncertainty
around energy and environment policy, we would still get to almost 100%
renewable energy by 2060 purely because of the market. But the warning
to politicians and policy makers is that “the transition happens more
slowly and ultimately it makes electricity prices higher”.
Thodey argues in the report that if Australia pulls the right levers,
“it is possible to achieve higher GDP per capita (as much as 36%) while
ensuring growth is inclusive and environmentally sustainable”.
“In a global context, strong cooperation on climate change and trade
can deliver a better outcome for Australia without significantly
impacting our economic growth, where before it may have been thought
impossible.”
Domestically, the report says that whatever happens in the rest of
the world, Australia can make big strides to reduce our emissions
through improving energy productivity, which means using less energy for
the same outcome.
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| The report suggests
the biggest benefits will come to Australia if the world takes concerted
action on climate change to limit global warming to a maximum 2C by
2100. Photograph: Michael Masters/Getty Images |
Australia was weak compared with best practice internationally
because it was not using the best technology available. It had the
potential to become one of the most productive users of energy in the
world through energy efficiency and electrification. Electric vehicles,
for instance, are expected to be the cheapest form of transport after
2025 and would dominate sales by 2040.
Australia needs to prepare to adapt to global conditions whatever
they are, but the biggest benefits will come if the world takes
concerted action on climate change to limit global warming to a maximum
2C by 2100 rather than the catastrophic 4C rise if little action is
taken.
If there is cooperative global action on climate change, Australia
stands to be a big winner, the report finds. The CSIRO modelling
indicates that “lower emissions from energy and greater sequestration on
the land could enable Australia to achieve ‘net zero’ emissions by 2050
under the outlook vision”. Australia could capitalise on low-carbon
exports such as hydrogen produced by renewable energy, countering the
decline in global demand for our fossil fuels exports.
“Although other countries are also pursuing energy productivity and
renewables, modelling suggests that Australia’s vast natural resources
for renewable generation should lead to lower cost electricity in 2060,”
the report says.
With reliable, low-carbon electricity and investor confidence in
long-term policy, along with rising wages and improved energy
efficiency, “by 2060 Australians are spending between 58% and 64% less
on electricity as a proportion of income than they are today”.
Even if the world balks at strong action on climate change, Australia
does better economically if it if embraces energy efficiency to reduce
emissions.
The report’s proposed land shift would see a “stretch goal” of
increasing agricultural productivity to 3% per year, meaning
intensifying agriculture on the best land, using emerging technologies
and boosting research and development. For instance, increasing
productivity could result in revenue for crops such as winter cereals
doubling by 2060.
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| The report suggests increasing agricultural productivity could result in
revenue for crops such as winter cereals doubling by 2060. Photograph:
Michele Mossop/Getty Images
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Agriculture in Australia had not yet fully embraced the “digital revolution” and doing so would be a boon.
Strong global action on global warming would present
opportunities for land owners to sequester carbon through carbon and
environmental planting, a “significant land use shift” that would
protect prime agricultural land for food. As much as half of the least
productive agricultural land could be profitably switched to carbon
plantings, which would offset Australia’s own greenhouse gas emissions.
Additional emissions abatement could be sold as carbon credits to other
countries.
“Australia has one of world’s best and largest solar resources and we
can capture that and export low emissions energy to countries that
don’t have that resource, to places like Japan, Korea and potentially
even China,” Deverell said.
Overall, the report says that “Australia is not well prepared and
that action is required to avoid the slow decline scenario”. That
scenario is not a disaster, but is far less positive than it could be.
CSIRO modelling found GDP growth would be 2.1% annually, real wage
growth would be 40% higher in 2060 than it is now and there would be
only a modest increase in energy productivity. Major cities would
continue to sprawl, adding to stressful commutes and long distances to
education and services.
It is possible to achieve higher GDP per capita (as much as 36%) while ensuring growth is inclusive and environmentally sustainable.
David Thodey, CSIRO chairman
With bold action, the modelling found a far more prosperous and
dynamic Australia, with GDP growth of 2.76% to 2.8% annually, real wages
90% higher, average density of major cities increasing 60% to 88%, only
a 6% to 28% increase in total energy use, a more than doubling of
energy productivity, and net zero emissions by 2050 with global
cooperation.
“This decoupling of emissions from GDP demonstrate that stronger
action on environmental measures need not come at the expense of
economic outcomes.”
Deverell said the report wasn’t intended as a list of policy
recommendations or predictions for the future, but a chance to “get
together a group of senior leaders, public sector, private sector, NGOs,
(to) have an informed consensus on where we need to go”.
While trust and social cohesion were difficult to model, they were
crucial for Australia’s future, he said. Trust in governments and CEOs
was low, which meant Australians had little faith that decisions were
made in the long-term interest of all. Without that trust, bold
decisions were more difficult.
There was no “silver bullet” to restore trust, but efforts were
needed to address policy over-promising, the perceived unrepresentative
nature of politicians who came from narrow backgrounds and the
perception that politicians favour vested interests over the public
interest.
The
report also emphasised equity. “We didn’t just want this to come
through as a ‘here’s what we need to do to grow our economy’, but
‘here’s what we need to do to grow our economy and increase living
standards for all Australians’.”
In the industry shift, the report says productivity can be boosted
with increased adoption of technology, greater investment in education
and skills to ensure a globally competitive workforce, and reversing the
decline in education in key areas such as maths and science.
In both the slow decline and outlook vision scenarios, the report
accepts official estimates that Australia’s population will reach 41
million by 2060, with Sydney and Melbourne home to between 8 million and
9 million people, and Brisbane and Perth between 4 million and 5
million. The slow decline model shows millions more living in the outer
suburbs, making it harder to travel to jobs, education and services.
Housing affordability remains a major problem, and social cohesion is
strained.
The urban shift requires a big change in the way planning and policy
supports our cities, with a growth in medium and high density living,
and a focus on multiple “centres” of growth apart from the CBD, a policy
that Sydney and Melbourne are already embracing.
Well-designed apartments, semi-detached homes and townhouses make up
just over half of the housing stock, with a mix of reasonably priced
accommodation so that essential workers can afford homes. People live
closer to jobs, to education and to services and recreation.
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| Electric vehicles are expected to be the cheapest form of transport
after 2025 and would dominate sales by 2040. Photograph: Dan Peled/AAP
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Car use is down, mass transit is up and electric vehicles make up
over 80% of new vehicle sales in 2060. An alternative model outlined is
one in which satellites cities such as Geelong and Newcastle grow
quickly, and 5 million more people choose to live outside the capital
cities, easing the density in the capitals.
It
is the second Outlook report, following a 2015 release that focused
more narrowly on water, energy and food. The 2019 report is more
ambitious and brings in outside leaders to identify Australia’s key
challenges and opportunities.
Deverell said it was aimed first at senior decision makers in the
public and private sector, as well as NGOs and community groups. But it
was “a message to all Australians that we can take control of the kind
of future we want for the country”.
“By using those two scenarios we were trying to illustrate just how
different the future is depending on the path that we take. We’re saying
that Australians need to get together and these are the things we need
to be focusing on. This is what’s really important.”
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