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The decarbonisation imperative is driving a seismic shift in the global and Australian economy. This transformation journey has just started and will accelerate over the next decade. Universities have a critical role to play in providing Australia with the capability, technology, and leadership to increase the pace, broaden the beneficiaries and reduce the costs of this new industrial revolution.
The global consensus is that emissions must peak by 2026 to avoid dangerous climate change. This is critical because unabated climate change would be disastrous for our communities, economies, and natural systems. Climate change is already disproportionately affecting those who have contributed least to the problem – the most socio-economically vulnerable, including our indigenous communities. Without rapid and deep decarbonisation this trend will continue.
Although the changing climate presents significant risks to Australia, global decarbonisation presents us with a tremendous economic opportunity. Our decades-long dependence on raw-material exports has gifted us with 28 years of uninterrupted growth but also means that Australia is missing out on opportunities to create further value by expanding our manufacturing efforts and evolving our production capabilities. While we rank 11th globally in GDP, we lag in terms of economic complexity (37th of 63) and this positioning makes us vulnerable to the economic change around the corner.
The recent Australian federal election has meant a more ambitious 2030 emissions reduction target, and the promise of further policy to incentivise the Australian community to decarbonise. This is representative of the growing consensus that we must increase the pace of our efforts and invest now to realise the potential to lock in decades of continuing economic prosperity. This will be no small task and will require the coordinated transformation of our industry, continual investment in technology, the upskilling of our workforce, and unprecedented collaboration between our communities, governments, and business.
Australian universities are key to ensuring that the economy has the right workers now and into the future. They connect Australia to the global economy, convene multidisciplinary and multigenerational conversations, and produce invaluable research, intellectual property, and innovation. Our universities are at the centre of this conversation and will play a central role in meeting the climate challenge in several important ways.
First, universities can support the development of the skills and knowledge required for our society to reduce emissions and manage the effects of a changed climate. In 2021, the National Skills Commission identified that one in five professional occupations were subject to skills shortages, including design, engineering, science, and transport. This reality presents a significant challenge to high emitting industries looking to action their net zero targets at pace, and better integrate understanding of science and climate change data into their daily decision making. Universities are uniquely positioned to act on this, and already more than half of all domestic students are enrolled in courses that map to these critical shortages.
In the Economic Reality Check Report Deloitte highlighted that without strategic investment in disaster resilience and adaptive capacity Australia will continue to suffer the significant economic and social consequences we have seen with ‘Black Summer’ bushfires and 2022 Floods. Beyond the technical skills required to execute on this, we rely on universities to integrate ESG concepts into all coursework to arm the graduates with the fluency required to understand and address this challenge. This includes investing in teaching the capabilities required to perform in the context of uncertainty and complexity, advanced data analytics skills and practical guidance on how to drive multi-stakeholder collaboration.
Second, universities are hubs of innovation and develop technologies that can be commercially scaled through private sector partnerships. This not only has tremendous potential value in the renewable energy field - it also has a strong economic multiplier effect. Deloitte research has found every $1 invested in higher education research and development adds $5 to our GDP. Investing in and amplifying the expertise of Australian researchers is critical to finding the solutions necessary to cost-effectively decarbonise and adapt our physical infrastructure to deal with changing weather.
There are several inspiring examples of universities rising to this challenge. For example, the Green Steel produced using polymer injection technology pioneered by researchers at UNSW enables a 14% reduction in coking coal inputs, and if widely adopted could generate tens of millions a year in environmental and business benefits, including supporting Australia to transition the export mix towards value added products. Or more recently, the new ANU “Earth System Simulator” which provides better historic information and richer predictions of weather patterns and events. We need many more of these innovations and must continue to build stronger connections between research communities and industry to accelerate the timeline to pilot and test commercialisation potential and industry applications.
Finally, universities are major users of energy and must take a leadership role in decarbonising their own operations and upgrading legacy infrastructure. This process is well underway and many of our Australian universities are proactively joining global programs such as the Sustainability Tracking, Assessment and Rating System (STARS) designed specifically for the higher education sector to demonstrate progress (the University of Tasmania having received a gold rating). In addition to bringing rigour to their internal operations, an important element of this leadership will be working with the financial services industry to integrate ESG considerations and ratings across their investment portfolio. This includes using their privileged position as owners of UniSuper (37 Australian universities), to influence the end-of-life management of fossil fuel investments and an equitable transition.
All this shows how important our universities are in Australia playing their part in the decarbonisation revolution while simultaneously increasing its economic resilience and maturity. Deloitte’s Global Turning Point Report found accelerating the transition to net-zero could add $US43 trillion to the global economy over 50 years while inaction could cost us $US178 trillion in the same timeframe. If Australia wants to capture that economic upside, the existing dialogue between our universities and the sectors they serve and collaborate with, whether it be high emitters or the financial services industry, must continue with a focus on realising the potential impact universities can have across skills, technology, and investment.
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.