I don’t mind a bit of hope. But that’s different to the complete rot that the CSIRO pumped out today:
The Australian National Outlook is a new initiative by CSIRO, which is intended to contribute to the evidence base and understanding required for Australia to navigate the complex and often intertwined challenges involved in achieving sustainable prosperity.
This first National Outlook seeks to provide a better understanding of Australia’s physical economy. It has a particular focus on understanding two aspects: The ‘water-energy-food nexus’ and the prospects for Australia’s materials-and energy-intensive industries, which account for one quarter of economic value and employment, but around three quarters of our use of energy, water and materials.
The National Outlook and science in general can contribute evidence and analysis to inform the national conversations. However it cannot determine the choices we have to make as a community. They will – and should – be shaped by our values and collective imagination.
While this outlook identifies national opportunities, achieving these benefits will require considerable further consideration and action. The investments and other changes required will not happen overnight. There is no overstating of the challenges for policymakers, industries and communities in navigating the transitions needed to secure our future prosperity.
Sounds good. Let’s see what it looks like.
Key messages and findings Australia’s choices will shape our prosperity.
Australia has the capacity to pursue economic growth, sustainable resource use and reduced environmental pressures simultaneously. Policies and institutions will be essential to realise Australia’s full potential and manage the associated trade-offs and risks. Australia can benefit from the positive outlook for our living standards and natural assets, while contributing to a secure and prosperous world.
Global demand for our exports is projected to treble through to 2050 as global per capita income also trebles. While we can be confident in some high level trends, such as long term growth of world energy and food demand, the risks and opportunities facing specific sectors of our economy are less certain. Demand for specific materials and energy exports will vary with international developments. Flexibility in the deployment of its natural and institutional resources will be needed for Australia to prosper across a diverse range of global scenarios.
Agricultural export prices are likely to trend upwards over coming decades reversing a long historical decline. Our analysis shows that Australia’s total output of food and fibre can increase – even in scenarios with significant shifts of land out of agriculture – if agricultural productivity growth is restored. However, we have not fully explored the complex distributional implications of these scenarios, and we do not yet fully understand the potential cascading impacts of future climate change and extreme events on farms, sectors, and regions. The scale and multiple complexities of these potential changes could raise unprecedented challenges for landowners and regional communities.
The future of our nation, industries and communities will depend on how we position for change, and adapt as the world around us evolves. In most cases, innovation and improving productivity are no regret moves that will help to create a better future.
Sustainability and economic growth can be partners not competitors.
Our research suggests that Australia can achieve economic growth and improved living standards while also protecting or even improving our natural assets. However this will not happen automatically. Australia’s economy is projected to treble by 2050, while national income per person increases by 12 to 15% above inflation per decade (assuming no major shocks) – with different choices about working hours accounting for two-thirds of the range of projected outcomes.
Energy and transport can remain affordable, with energy efficiency offsetting higher prices for electricity and fuel (including in low carbon scenarios), and better management of peak demand and improved electricity network operations and investment discipline could deliver further benefits. By 2050, electric vehicles and biofuels could reverse our mounting transport fuel imports, as well as reducing costs, improving air quality, and reducing greenhouse gas emissions.
Business, individuals, and government all need to be involved in lifting productivity and enhancing our shared social, economic and natural capital. Efficient and responsive institutional settings can turn challenges into opportunities, and have a vital role in managing tradeoffs and promoting longer term sustainability and prosperity.
Decisions we make as a society matter – and will shape Australia’s future more than decisions we make as businesses or individuals.
Policies and institutions are central to unlocking potential benefits and managing trade-offs and risks. Collective decisions account for 50-90% of the differences in resource use and natural assets across the scenarios in the National Outlook, resulting in synergies in some cases and trade-offs in others. Institutional settings are crucial to support the deployment of existing and new technologies that match our economic and environmental aspirations in energy, water, transport, agriculture and other industries.
Managing the water-energy-food nexus will produce challenges and opportunities for rural land use and communities. We can transform and enrich our economy and regional communities by meeting national and global food, fibre, energy, carbon sequestration, and conservation needs through new land sector markets, if we manage these transitions well.
While water use is projected to double by 2050, this growth can be met while enhancing urban water security and avoiding increased environmental pressures through increased water recycling, desalination and integrated catchment management. We find water demand and supply are shaped by complex interactions between food production, energy-intensive industries, energy and water efficiency, and new carbon plantings – all against a background of regional constraints on rain-fed water resources and a growing population and economy.
We can reduce our greenhouse gas emissions significantly through energy efficiency, carbon capture and storage, renewable energy, and land-sector sequestration. In the case of concerted global action on climate change, this could see Australia reduce its per capita emissions to below the global average by 2050, down from five times the average in 1990, while maintaining strong economic growth. Actual costs and benefits would be highly dependent on the details of domestic policies, and how these interact with international actions.
Australia’s ecosystems are unique and globally significant. At payments for carbon farming around A$40-60 per tonne of CO2e by 2030, carbon credits could be harnessed to reward landowners for restoring ecosystems, increasing native habitat by 17% and decreasing extinction risks by 10%, without large additional government outlays.
Here is the key assumption:
Global population is projected to rise by 14 to 56% by 2050, from 7 billion people today, in line with UN projections. However, the transformational shift will be the projected tripling (from one billion to three billion) of the number of people in nations with annual income comfortably above the World Bank’s 1.1 Projected global demand for our exports trebles to 2050 high income threshold of US$12,000 per capita (see Figure 5). As a result, the size of the global economy and its global demand for food, energy and energy-intensive materials is projected to more than double. Due to that demand, agriculture, energy commodities, aluminium and steel will remain important export earners for the Australian economy. Meanwhile, Australia’s population is projected to grow by 64% to reach 36 million in 2050 – a slightly slower rate than the four decades to 2010 (where population increased 76%), but still significantly higher than the global rate.
In short, Australia’s population skyrockets over thirty years along with global population growth. Sydney and Melbourne double populations to 8 million in thirty years. Although it took 220 years to accommodate 4 million, we’re going to do it again in 30 years as strain on the environment falls. Water supply is absolutely no worries as we double demand and rainfall craters with climate change.
Not only that, as coal exports collapse and we stuff in all of these new people, a relative shrinking income pie is miraculously divided into larger per capita slices. And while this income magic pudding manifests, we’re all going to work less as well! I’m also especially fond of the assumption of a high income economy in China, with its one trillion old folks earning $35k per annum each without doing any environmental damage at all.
Now let me tell you what this future is really going to look like. We know exactly what extreme levels of population growth do to the Australian economy because we’ve just run an sixteen year experiment in the same. Per capita GDP gets wiped out:
And without some 150 year mining boom in full roar, per capita income falls:
At least the f’wits that composed the report had the decency to draw a slower line of ascent for per capita income and GDP than the historical trend. But that is the best I can say for its attachment to reality.
The report is pure fantasy. If its assumptions about population growth locally and globally prove correct then Australia will be in a permanent state of class, borders, environmental and political crisis so extreme that it is difficult to see the nation holding together at all.
Sadly that does not fit the contemporary social justice mission statement.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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