Innovatia

The global long-term goal, as defined by the Paris Agreement, is beginning to find expression in national commitments to achieving net-zero emissions, and the momentum behind ambi- tious climate targets suggests fossil fuel use will be largely phased out over coming decades. Zero-emissions technologies Were it not for game-changing advances within zero-emissions technologies, achieving such a fundamental turnaround in the world’s energy system would require an intensive, sustained global policy effort. The lion’s share of invest-

ment in new energy production, both globally and in Australia, is now in renewables. In the last eight years, the average cost of solar pho- tovoltaic power has fallen by a factor of five, and wind power by a factor of two, making both sources cheaper than any conventional energy supply – and that’s not all. Advances in battery technology and energy-storage have produced electricity grids that run on 100 per cent renewable energy, while rapid progress in the development of electric vehicles has led to plans for a largely electric global fleet and hy- drogen-powered heavy vehicles. Renewables in industry and trade The demand for clean electricity will increase dramatically, particularly for industrial ener- gy use. At the right price, it may replace both coal and gas as a source of heat. It can also be used in the production of “green” fuels, fertil- iser, “green steel” and various other industrial goods. Trade will be intrinsic to the creation of a low-carbon world economy, particularly in the interest of minimising production costs. Rather than producing their own energy, regions with low clean-energy potential such as the high lati- tudes of Europe and East Asia would be import- ers. Global-energy trade patterns would then be largely determined by renewable-energy advan- tage, rather than fossil fuel endowment. Australia’s opportunity With abundant access to interior and coast- al space and ports, as well as a record of suc- cessfully establishing large-scale resource pro- cessing industries, Australia is extremely well placed to become a large player in a global re-

RENEWABLE ENERGY EXPORTS: AN INDUSTRIAL GROWTH OPPORTUNITY As the world’s largest exporter of coal and gas, Australia has benefited significantly from fossil fuel production – but, as the use of fossil fuels declines, so will our coal and gas exports. Fortunately, the country is endowed not only with abundant fossil fuels but also with practically unlimited potential for cheap, renewable energy production. By Frank Jotzo T his potential could become the basis for large new energy industries that would serve to future-proof our economy, with

investment volumes over coming decades po- tentially north of the trillion-dollar mark. To make it happen, Australian governments will need to invest in R&D, encourage and support private investment, and demonstrate a genu- ine commitment to climate-change action – all moves in stark contrast with the present feder- Given the long-term global trajectory away from fossil fuels, the question is not whether the decarbonisation of global-energy supply will occur, but rather how quickly and by what means. The fundamental driver is the quest to address climate change by switching to a more sustainable energy source. al-policy of a “gas-led recovery”. Fossil fuel demand trajectories

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