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National Australia Bank chair Philip Chronican says the government should stick to its ambitious target to dramatically lift the role of renewable energy in the country’s electricity grid by 2030, as he warned the nation faced a $270 billion hit to its exports as the world moves away from fossil fuels.
While Australia has abundant natural resources, Chronican said on Thursday that demand for those emissions-intensive exports would decline after 2030.
NAB chair Philip Chronican said Australia could shed about 1 per cent of its GDP every year until 2050 without further action towards net zero.Credit: Elke Meitzel
“Unless we take a proactive approach to it, it’s likely that we’re going to suffer from a loss of economic output,” he said. “Other countries will be looking to improve their own emissions positions, and we’re not currently positioned to meet that demand.”
As NAB released a report it commissioned from Deloitte that highlighted the opportunity from decarbonisation, Chronican also underlined the cost of not doing enough.
Citing the report, he said fallout from insufficient action on Australia’s transition could wipe about 1 per cent off the country’s gross domestic product every year, which he said was “meaningful when you’re growing 2 to 3 per cent a year.” The report projects Australia’s existing exports will decline by $270 billion by 2050 under current net zero policies.
On the other hand, boosting the competitiveness of green industries in Australia could create a $435 billion economic opportunity, the Deloitte report said.
Realising this opportunity would require a rapid build-up of Australia’s renewable industry and supportive infrastructure to take advantage of the country’s sun, land, wind and water endowments, Chronican said.
The federal government has set a target for renewable energy to make up 82 per cent of the electricity grid by 2030. Despite the tight time frame for achieving the target, and expert concerns it will be tough to achieve, Chronican said the government should stay the course.
“The problem with deferring the target is that it puts off a lot of the rest of the transition we’re going to need to make,” he said. “At this stage, the best path is to focus on the barriers to us meeting that target, and a lot of those barriers come down to the lead times that it takes projects to get planned.”