Australia Must Reassess $20 Trillion in Future Economic Investment Towards Low Emissions
According to a new analysis from Deloitte Access Economics, Australia must spend $70 billion on structural improvements and $420 billion on new investments over the next 30 years to position its economy for growth in a low-emissions world.
This can be accomplished by recalibrating the projected $20 trillion in economic investment in the Australian economy in the years to 2050 such that it can thrive in a low-emissions society.
The 'All Systems Go' report, commissioned by NAB, found that $20 trillion will be invested in the economy over the next 28 years, regardless of whether or not we transition to net zero. However, NAB chair Philip Chronican stated that the transition to a low-emissions economy is inevitable and complex.
“If we get it right, the opportunities are immense,” he said, but he also warned that “the scale of action needed is far broader than the Industrial Revolution, and the timeline is roughly half”.
In releasing the report, NAB also revealed it has created the new role of Climate Change Officer, reflecting “increasing requirements of all parts of the economy, and all parts of the bank, to support its customers in making the transition to a low-emission future”.
Chronican referred to the transition to a future with low emissions as the "great reallocation" and claimed that we must change where we invest and what drives economic growth.
The research highlights four economic systems, namely energy, mobility, raw material production, and food and land usage, that collectively account for 90 per cent of Australia's emissions and must reduce this rate.
“The research also makes it clear that climate action is everyone’s job – the targets will not be achieved by one industry alone,” Chronican said.
“The adjustments required to realise the opportunities will impact every business and every household. We will all need to make changes.”
In addition to the $420 billion in extra new investment through 2050, $4 trillion of the $20 trillion in economic investment comprises net capital flows and investments across these four areas.
“$70 billion must move from emissions-intensive activity by 2030 into low emissions activity to make the structural changes necessary and avoid driving up the cost of the transition over the long run,” he said.
The research builds on studies conducted for the Business Council of Australia last year, which found that the economy stands to gain almost $890 billion over the next 50 years if concerted and prompt action is taken.
Ross McEwan, CEO of NAB, said there is a “clear commercial opportunity for Australian businesses.”
“Our role is to support our customers and communities through the transition and fund the investments needed to create a strong and sustainable future for Australia,” he said.
Source: Probono Australia
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