Limited functionality available
Australia’s economy is decarbonising, and the science and economics of climate change mean that it is inevitable that this will continue. Our collective challenge now is to accelerate this, whilst reducing cost and disruption through coordination, innovation and clear market settings.
Taking early action will reduce climate damages. Deloitte Access Economics has estimated that on a path of inaction, the Australian economy will lose around $3.4 trillion by 2070: a cost that will be felt in the lifetime of generations today. From this new baseline, if Australia acts with the world to limit warming and reach net-zero by 2050 then the economy could gain $680 billion by 2070.
Decarbonisation is only part of our story – due to historic carbon emissions, the climate will continue changing for at least the next 100 years. With legal cases, social disruption and climate-induced damages increasing, we need to better understand how and where these risks will emerge and urgently drive climate adaptation.
Effective climate action requires significant changes to private and public sector strategy, governance, finance and disclosure regimes. Communities need to share responsibility for the net zero transition, and be supported to ensure equity and minimise disruption. This is not a challenge for the next generation or the next CEO – those that are not already acting are exposing their organisation to climate risks and risk missing out on the massive upsides from climate action.
Achieving this will require more than just the right decarbonisation technology. We need a holistic approach which considers governments, businesses, and our communities.
Australia in 2030
Australia has the technology now to reduce emissions by 60% by 2030, when compared to 2005 figures. This would keep us in charge of our own destiny, enable our businesses and communities to benefit from the massive investment opportunities and ensure a smoother glide-path into our 2050 net zero target.
This decarbonising Australia will look very different.
To deliver this vision for a decarbonising Australia, we must implement:
Understanding current and future decarbonisation technology is relatively straightforward. However, to deliver impact, value and accelerate adoption, this needs to be activated by developing optimal pathways considering the unique circumstances of each organisation – cost is only ever one component of the equation.
There are many factors that enable or block change from happening, including the fear from communities of losing jobs, the need for politics to have short-term outcome, the capacity of decision-makers to lead their organisations into this more uncertain future and the design-life of existing assets. To accelerate decarbonisation and climate risk reduction, we must consider context.
Taking this ‘systems’ approach will help ensure that technology solutions are deployed when they are ready, when they will deliver the most value and with the support of affected communities.
It will not be for a lack of options that we fail to decarbonise – the real challenge will be in driving collaboration within and across sectors and ensuring that communities see that there is something for them in the climate transition journey.
Building a less emissions-intensive system of production is going to be a challenge that requires change at all levels: our community, businesses and the government. To date, many commentators have focussed just on the technological solutions required to avoid the forecast environmental and consequent economic damages. However, deploying technology solutions at scale will require all our systems to evolve, not just substituting one old technology for a new one. If we do not take a broader approach, the inevitable and necessary transition of our economy will be disorderly and untimely – dragging on economic growth, efficiency, employment, and income in the meantime.
Deloitte has developed a template for action that brings together the community, business and government to deliver collaboratively on this shared responsibility. All parties will need to contribute and to support the role of others to achieve the best outcomes.
Central to this is a strong role for government. To provide the best outcome for all Australians, governments at all levels will need to set clear rules, help to de-risk innovation and investment, drive coordinated market transformation and ensure equity in transition for communities. They must facilitate communities to design their own shared visions and provide clear pathways for their realisation.
Businesses will be critical in creating collaborative, connected ecosystems which drive decarbonisation investment across Australia’s industries. They will continue to lead the charge in driving supply chain emissions reduction, the take up of renewables and spearheading technology as net zero becomes the norm around the world.
Finally, the community must be at the centre of a decarbonising Australia. Already, they are investing in their own renewable energy and pushing for change on climate policy. Their role in the future will be to continue this advocacy, to plan for the changing natural disaster risk, and to take up the opportunities for change especially where there are new livelihood opportunities for high emitting regions.
Australia’s Indigenous communities need to be foundational voices to guide and inform the design of Australia’s climate journey, drawing from their knowledge systems refined over thousands of years of caring for this land.
With a holistic approach that considers communities, businesses and governments and how each can facilitate benefits for the others, we have a chance to create a thriving future for our country. More than that, we could build the model of how a successful transition is delivered and establish Australia as a powerful voice in a decarbonised world.
To deliver on this promise requires a new way of collaborating across public, private and civil society. It also requires an acceptance that the exact pathway is unknown but that the end point is agreed.
Change is inevitable – so it’s our imperative to act. If we are proactive and collaborative we can ensure that our fragile continent is economically resilient and that our communities will thrive – both now and well past 2030.
 https://climate-laws.org/ - As at July 2021, the total number of climate change cases filed to date has reached over 1,800, up from about 1,650 as at November 2020
John O’Brien joined Deloitte Australia in 2018 as a Financial Advisory partner. With more than 20 years of experience in the Australian and Asian clean energy and clean technology sectors, he provides strategic guidance to government, private sector operators, and large energy consumers and investors on issues around decarbonization, energy transition, and environmental technologies. His key expertise includes technology assessment, project development, project financing, risk and opportunity assessment, commercial and financial analysis, policy advice, and strategic growth strategies. In 2007, O’Brien established Australian CleanTech, a corporate advisory firm focused on environmental technologies, which he ran until joining Deloitte in 2018. He has also published two books on the opportunities emerging from the transition to a low-carbon economy. O’Brien has engineering degrees from Oxford University and Trinity College, Dublin, and holds an MBA from Adelaide University.
Will is Deloitte’s Asia-Pacific Climate & Sustainability Leader and has over 20 years’ international experience supporting organisations to respond to climate change. He has worked extensively across all infrastructure classes, led national-level climate risk assessments, delivered innovative adaptation strategies, developed urban resilience strategies for cities across Asia and advised government agencies on how to align regulatory arrangements to drive more effective climate risk management. Will has also led sustainability and carbon management services for infrastructure projects with an aggregate capital value of over $15 billion, is an experienced facilitator and trainer and co-developed the Great Barrier Reef Foundation’s ‘Resilience Reefs’ initiative. For Will, the need for organisations to rapidly accelerate action to decarbonise their business models and actively address climate risks is clear. The opportunities associated with this transformation agenda are enormous, but to capture value organisations need to move quickly, consider all aspects of their business, build new partnerships across their value chains and transparently engage with their stakeholders. Leading a group of climate and sustainability practitioners across the region, Will’s role is to bring the best of Deloitte to help our clients solve their complex problems, manage uncertainty and respond to rapid change.
David is the Managing Partner of Financial Advisory at Deloitte Australia and a member of the National Executive. He leads a team of 1,000 people and serves as an advisor in the private and public sector for M&A, restructuring, forensic, infrastructure and capital projects, real estate and economics. Dave has spent his career advising companies, investors, financiers and government in transactions and financial restructurings. Dave previously led Deloitte Restructuring Services in Australia and Asia Pacific, and helped establish a Special Situations Advisory network between China, Singapore and Australia, along with a new Restructuring practice in India.