A renewables-led economic recovery will create almost three times as many jobs as a fossil-fuel-led recovery, according to a report by economic consultancy Ernst and Young (EY).
Key points:
- The EY report, commissioned by conservation group WWF, called for a mix of incentives, subsidies and regulations
- The Government has indicated a preference for gas production to lead the country's recovery
- Business groups say Australia needs to approach recovery as "an opportunity, not as a challenge"
The newly published report proposed six focus areas, which it said would simultaneously stimulate the economy and move Australia towards net-zero greenhouse gas emissions by 2050, in accordance with the 2015 Paris Agreement.
While the Federal Government has spoken of a "gas-fired" COVID-19 recovery, the EY report, commissioned by conservation group WWF Australia, argues replacing fossil fuels with renewable electricity and hydrogen will be better for the economy.
"We can rebuild our economy in a way that sets up Australia for prosperity in a world hungry for a low-carbon future," WWF Australia energy transition manager Nicky Ison said.
The report found some proposed measures — such as fast-tracking renewable projects already in the pipeline — would cost the taxpayer very little and create an estimated 58,000 new construction jobs.
A further five measures, costing about $2 billion over the forward estimates, would generate nearly $10 billion in economic benefits and create a further 45,000 jobs, according to a WWF analysis of the figures.
These measures are:
- Investment in manufacturing to reduce use of gas and build new clean-technology export industries. Cost: $520m Jobs: 22,000
- Make Australia a leading global battery manufacturer. Cost: $500m. Jobs: 7,800
- Make all buses electric. Cost: $240m Jobs: 10,000
- Subsidise solar for community organisations. Cost: $500m Jobs: 5,000
- Accelerate the renewable hydrogen industry. Cost: $225. Jobs: 1,200
"A clean stimulus package can address issues holding back renewables and get the ball rolling on more than 100,000 jobs," Ms Ison said.
According to EY and WWF, the aims could be achieved by a mix of tax incentives, direct subsidies and regulations. The Government has appointed the National COVID-19 Coordination Commission (NCCC) to advise on the country's economic path out of the pandemic.
A leaked NCCC manufacturing taskforce report outlined proposals for a "gas-led manufacturing recovery" with massive subsidies for gas companies, and relaxations of environmental protections.
The Government has also released a "technology roadmap" to address climate change, which includes a range of technologies such as gas, hydrogen, carbon capture and storage, and renewables.
Energy and Emissions Reduction Minister Angus Taylor said gas would be needed to back the country's growing renewable capacity.
"Australia is a world leader in renewables, however we must balance these intermittent energy sources with reliable baseload power," he said in a statement.
"The Government believes reliable, affordable gas can play an important role in the post COVID-19 recovery in important industries such as manufacturing, which will create jobs and help strengthen the economy."
Steel manufacturer supports renewable push
In Australia, a renewables-led recovery has had widespread support, with a coalition of 15 groups including the Business Council of Australia and the Australian Industry Group signing a letter calling for stimulus packages to help transition the country towards net-zero emissions.
"We need to look at this as an opportunity, not as a challenge and not as something that we should be afraid of," Australian Industry Group chief executive Innes Willox told the ABC.
The call has been backed by steel manufacturing business Molycop, which has been operating in Newcastle in NSW for more than 100 years and is among the biggest electricity and gas users in NSW.
Australasian president Michael Parker told the ABC that while an increased supply of gas had a role to play in the country's recovery, a renewables-led package was "fundamentally one of the right things to do".
Molycop Australia has already moved to purchase 50 per cent of their electricity from renewables and has invested in efficiency measures to reduce their gas use.
The company already gets almost all its steel from recycled metal and is looking at adding new technology to its furnace.
"That would enable us to replace carbon that's been derived from coal with rubber from old tyres," Mr Parker said.
"I think there's a broader opportunity around promoting the circular economy … reusing recovered materials that would otherwise end up in waste, and transforming those in manufacturing processes."
Global push for post COVID-19 renewables
Around the world, renewables-led economic recoveries have been urged by the UN and the EU."As we spend trillions to recover from COVID-19, we must deliver new jobs and businesses to a clean, green, and just transition," said Antonio Gueterres, the secretary-general of the United Nations at a recent conference.
The call was backed by German Chancellor Angela Merkel.
"It is important that recovery programs always keep an eye on the climate," she said at the same virtual meeting.
"We must not sideline climate, but invest in climate technologies."
Nicky Ison from WWF said this moment presented a critical choice.
"We need to make choices right now that are both good for jobs in the short term and position us for that larger export opportunity," she told the ABC.
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