Australia trails in the carbon race Opinion Article

Mar 26, 2013 - 9:00am

This article first appeared in the Australian Financial Review on 26 March 2013. 

Ben Waters
Director of ecomagination, GE Australia & New Zealand

Australia’s image abroad is of an unspoilt nation remote from the economic concerns of Europe and America – and largely that’s true. It would be easy to attribute our comparative good fortune with the good luck of a "lucky country", and overlook the hard work, ingenuity and commitment we have invested to get here. The facts remain: we are being left in Asia’s productivity wake and have ground to make up if we are to secure sustainable future prosperity.

 
The Climate Institute’s Global Climate Leadership Review, released today, shows that Australia has recently been improving its overall carbon competitiveness, but that the net result is that our performance up to 2010 had not improved much since 1995. The review also shows that Australia is fast being overtaken by Asia and this should ring alarm bells for the way we approach our preparedness for a low-carbon future.

South Korea, China and Japan now make up three of the top five carbon-competitive economies in the G20. China has improved its ranking to third, having benefited from significant increases in its clean energy investment and high technology exports. China alone accounted for half of all public equity raised in clean energy in 2010 and exported $36 billion worth of solar panels in 2011.


Economic growth and increases in carbon productivity are not mutually exclusive; doing more with less is good for the economy, good for the environment and good for our nation’s future prosperity.


Australia is now ranked 17th on the index. Our poor ranking reflects the fact that we have not been well prepared to remain competitive in a world when greenhouse gas emissions will be constrained. We remain one of the highest per capita producers of greenhouse gases, some 24 tonnes for each citizen. Our per-capita CO2-equivalent emissions are nearly twice the OECD average and more than four times the world average.

The recent introduction of a price and limit on carbon in Australia promises to change our carbon productivity trajectory for the better. Future editions of this report will track our progress as we seek to close the gap in our carbon competitiveness.

This gulf between the progress of Australia and that of our key trading partners in Asia comes at a time when policymakers are still assessing the full impact on Australia of Asia’s rising economic success and rapid urbanisation. Australia is clearly in the right place at the right time to benefit from Asia’s continued growth and our productivity is critical to how we realise this opportunity.

Economic growth and increases in carbon productivity are not mutually exclusive; doing more with less is good for the economy, good for the environment and good for our nation’s future prosperity.

During his visit to Australia last week, GE Chairman and CEO, Jeff Immelt, spoke about how energy efficiency will become even more important for Australia. He highlighted the huge potential in Australia’s large resources, energy and transport sectors to reduce emissions across the board by leveraging the Industrial Internet. Australia can achieve productivity and efficiency gains in industries as diverse as oil and gas and aviation by connecting machines with advanced sensors, controls and software applications. The Industrial Internet is not the only solution, but it could play an important part in driving economic growth and productivity, as well as in cutting our CO2 emissions.

On the positive side, we have bi-partisan agreement on the need to move to a low carbon future in Australia. For example, the Government and Opposition both support at least a five per cent reduction in greenhouse emissions from 2000 levels by 2020, the Renewable Energy Target, the Carbon Farming Initiative and the Australian Renewable Energy Agency.

With support from the carbon price, a prime driver for renewable energy in Australia remains the Renewable Energy Target. The Climate Change Authority did an exhaustive review of the RET last year and recommended the current gigawatt-hour target be preserved. GE strongly agrees with that finding and urges all parties to recommit to the RET and to implement the Authority’s findings.  There’s no downside to having more renewables in our grid; wind has been identified by many as the cheapest form of generation going forward.

GE supports clear and consistent policy and regulation, which provides industry the confidence to make long-term, low-carbon investment decisions. Taking a pragmatic approach towards climate change, it’s about looking at how we can best mitigate the risks and how we can leverage the upside, as you would any type of market or business change. If we want Australia to be competitive in carbon-constrained future, we need to be better prepared.

The results of the Climate Institute’s Global Climate Leadership Review provide more irrefutable evidence that now is the time to take Asia’s lead.  We can leverage success in carbon competitiveness to our advantage to drive not just a low-carbon future, but a future that is focussed squarely on productivity, efficiency and growth.

NOTE: 

The Climate Institute/GE Low-Carbon Competitiveness Index used in the review is based on three factors: how the economy is structured towards less emissions-intensive activities, steps taken to move towards a low-carbon future and investments in education and infrastructure. The figures used in the 2013 index cover the period up to 2010, before Australia’s introduction of a price on carbon.


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