A leading voice for Australia’s business sector has called on governments to include climate action in its response to Covid-19, saying that addressing the two economic crises together will help accelerate Australia’s recovery.
In a speech to be delivered to the Stimulus Summit online conference on Wednesday, co-hosted by the Smart Energy Council and Reneweconomy, and also delivered at a rival clean energy event on Tuesday, Australian Industry Group chief executive Innes Willox said that while governments are dealing with the immediate responses to Covid-19, it must capture the lessons needed to prepare Australia for future crises.
Such a looming future crisis is climate change, and according to Willox, incorporating measures that both help to stimulate the economy and improve Australia’s position in a transition towards a decarbonised economy will help accelerate economic recovery.
“Governments will need a suite of options across regulation, taxation and spending that they can deploy as necessary to limit damage and support recovery. And those options will need to improve the long-term Budget picture, by supporting growth or averting ongoing costs, so that we can rebuild the fiscal capacity to respond again whenever the next acute crisis hits,” Willox said.
“One source of future crises is climate change, as previewed this past summer. Our national interest lies in global action to avoid as much climate change as possible. We will have to deal with what we can’t avoid.”
“A successful energy transition requires gaining competitiveness and leaving no-one behind. That task extends well beyond electricity generation, to heavy industry, transport, agriculture, the built environment and more. There is immense scope for reform and investment to support that transition. And getting started during the crisis will contribute to faster recovery.”
The AI Group chief, who will be addressing the Stimulus Summit on Wednesday morning, acknowledged that Australia’s business sector would take a hit and that while recent measures to stop the spread of Covid-19 had hurt many businesses, the industry recognised that the measures were necessary.
On Monday, the Australian Bureau of Statistics reported that 72 per cent of Australian businesses expected reduced cash flows over the next two months. Forty-one per cent of businesses reported that they would experience increased difficulties in covering basic operating expenses.
Willox said that there were a range of opportunities that could be seized upon to improve both the Covid-19 economic recovery, while also supporting a long-term transition towards more sustainable industries.
In the energy sector, these opportunities include better energy management, making investments in energy efficiency and productivity, improving the performance of electricity networks and investing in energy storage.
“There are many already-planned electricity generation projects. But generation may be more the consequence of recovery investments than their direct focus. Stronger networks, more flex and new demand from electrolysis can pull supply through. Any direct support for generation projects should avoid dissuading investment through higher uncertainty.”
“Energy storage increases the value of cheap but variable renewables and could help recovery, with caution and care. Big batteries are quick to build and getting cheaper, but longer supply gaps are better plugged with pumped hydro – albeit with longer construction times. Household batteries need to be installed and operated to provide grid-wide value.”
Willox added that it was important that governments did not overlook the future potential of electric vehicles, particularly when it comes to city planning.
“Transport deserves attention. This is an excellent time to prepare our cities and major corridors for mass takeup of electric vehicles by installing or provisioning for charging points at servos, public and local government parking lots and apartment blocks. Hydrogen infrastructure can also help, particularly for trucking,” Willox said.
The Australian Industry Group represents some of Australia’s largest businesses and has often sought to balance a recognised need for Australia to reduce its greenhouse gas emissions, while also avoiding disproportionate cost burdens being placed on businesses.
“There’s much more agreement over climate change than we often think – as our business, farmer, union, and civil society colleagues in the Australian Climate Roundtable can attest. But it has been a focus of political division,” Willox said.
“I think we’ve all been heartened by our governments resetting and working together across party lines to respond to the pandemic. They are now seeking consensus around long-term reforms that can strengthen Australia but were too challenging in good times.”
RenewEconomy and the Smart Energy Council will be co-hosting the “virtual Stimulus Summit conference” on May 6, focusing on a renewables-led economic recovery, featuring industry leaders, analysts and advocates, including the Queensland premier and four state energy ministers. More information and registration here.
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