The energy transition fuelled by net zero commitments – now made by two- thirds of the global economy – will be the largest global market shift we are likely to see in our lifetimes.
Reaching net zero will require a fundamental reimagining of everything we do. It will require a new energy system, new modes of transport, new fuels, new materials, new modes of financing investments, new ways for industry sectors to interact and new ways of living on a scale – and at a pace we have never come close to achieving before.
Solar PV, for example, is now delivering 6.5 per cent of Australian power generation, but it has taken nearly 70 years to go from an invention to a mature industry to deployment at scale.
We need a complete transformation in the next 30 – half that time – and not only in the energy system but across all sectors of our economy.
Australia is one of the first countries to have such high penetration of renewables, and that’s an opportunity, but Australia has both the most to gain and the most to lose.
Unlike innovation economies such as the United States, Australia has a high dependency on revenue from fossils, and when those industries are being hurt, our economy is hurt.
Our industries also rely heavily on foreign investment capital, as well as access to international markets that are increasingly demanding net zero products.
Many of our trading partners are introducing carbon border taxes, and our international resources markets are also moving, with China, Japan and South Korea setting their own net zero goals. This global market shift makes doubts about climate change irrelevant.
Our seemingly impossible challenge is to lower emissions across multiple sectors and expand our economy at the same time, but science loves to solve seemingly impossible challenges.
About 100 years ago, when CSIRO was formed, our act demanded it be “sustainable”. Back then it meant financially – today it means environmentally – but the reality is we need to be ambidextrous. Environmental sustainability will only be successful if it delivers profitability.
Facing that uncomfortable truth has led CSIRO to breakthroughs such as FutureFeed to reduce livestock emissions by more than 90 per cent, without hurting profitability.
In just the past five years, we’ve managed to turn CSIRO’s own rising emissions around, and our core operations are well on the way to net zero. We have committed our Newcastle Energy Centre to apply technology to reach net zero by 2025, and we have committed to net zero for all of CSIRO by 2030.
We have done all this while at the same time maintaining our own financial sustainability. As an enterprise, while our emissions were rising, our earnings were shrinking – but we’ve turned both around. I don’t say this to brag but to show other businesses that it is possible.
This is the challenge for Australia: not only to reimagine our industries and way of life on a colossal scale but to do so while remaining profitable and internationally competitive.
Rather than demonising our coal, iron ore and gas industries, let’s help them reinvent themselves so they can continue to provide the lion’s share of our national funding for healthcare, schools and social services.
Let’s reinvent them using our home-grown Aussie science and technology so that the problems we solve become global export opportunities, and the jobs and growth happen here.
Only by working together are we going to develop the critical technologies to underpin this transition and, even more importantly, bring those innovations to market at the pace and scale needed.
To help accelerate this, in the past financial year alone CSIRO invested nearly $80 million in collaborative low-emissions technologies research, excluding co-investment from government and industry.
We announced our national missions program to help Australian businesses, industry and regions with their greatest challenges, including to measure and mitigate climate risk, to transition to net zero using pathways most appropriate to them, and to transform our exports with an $11 billion hydrogen industry.
We are working with Australia’s largest companies to develop green metals, next generation solar and hydrogen-based energy systems, and to build new batteries and recycling solutions, all right here at home.
We are working with the biggest mining companies to deploy world-leading methane destruction technologies to target this most powerful of greenhouse gases. We also recently partnered with industry and the Northern Territory government to test the feasibility of a carbon capture utilisation and storage hub near Darwin to provide high abatement options for our critical heavy industries during their transition.
All these innovations do two things – they provide the tools for reducing and eliminating emissions while supporting Australian industry profitability and jobs through this global transition.
Decarbonisation cannot come at the expense of our jobs and economy because it just won’t work if it does. We need to be smart about it, and we need to work together.
Dr Larry Marshall, Chief Executive, CSIRO.
This article was originally published by the Australian Financial Review.