The green economy: Australia’s opportunity

The green transition is often approached from the angle of risk, focusing on the need to avoid climate change risk to our economy and avoid ecological catastrophe. What is often overlooked are the ways in which the green transition has been a driver of innovation, productivity and competitive advantage.

Over the past few years, new green technologies, expertise and energy sources have rapidly emerged and, driven by the updated target to reach net zero, are set to become the new normal.

What we see before us is the emergence of a multitude of green activities and green jobs focused on one single goal: to develop an economic model that creates a virtuous relationship between economic productivity and environmental wellbeing. Long anticipated, it’s an economy that meets ecological objectives while also fostering prosperity and social benefits.

The recently established National Net Zero Authority creates a timely opportunity for Australia to supercharge green economy discussions. These conversations have the potential to plot a pragmatic way forward for climate change adaptation, energy transition, emissions reduction and maintaining economic competitiveness, while providing clarity on Australia’s workforce and investment opportunities.

As a resource and biodiversity-rich economy, Australia stands to gain significantly from the greening of its current economic drivers. For example, the country has the potential to be seen as a model for green extraction and green agriculture; a global hub for renewable energy and hydrogen generation; and to foster a generational step change in the stewardship of our forests, marine habitats and biodiversity. The demand for these resources, expertise and technologies is set to boom globally.

In the energy sector, providers are making a holistic transition from coal and gas by repurposing power generation assets into clean energy opportunities and upskilling regional workforces, with the help of organisations such as Arup.

In the construction sector, we are seeing sustainable construction practices on the rise, with property owners and developers increasingly reaching out for our expertise on carbon management and material reuse.

However, leadership from industry is not enough. We will also need strong support from government and policy alignment to create scalable change. To this end, several jurisdictions are taking up the charge.

In Queensland, a mandated climate-positive Brisbane 2032 Olympic and Paralympic Games will help accelerate the state’s transition to a lower carbon economy and support industry transition.

In NSW, they’ll now be factoring carbon into business cases at a rate of $123 per tonne, which will put the role of embodied carbon in project development under the microscope. This is both a challenge and an opportunity to rethink the way NSW will deliver the $110 billion pipeline of projects, while creating green jobs and economic opportunities.

It is critical, however, that we have appropriate policies in place that encourage the private sector to move in the right direction, while also providing the safety net and transition mechanisms – such as retraining – needed for workers to move to other industries.

While the ideal of the green economy is clear, the way forward is less clear, and requires an alignment of government, the private sector, workers and communities to ensure the treatment is not worse than the cure.

This must also be backed by the right technical support from engineers, scientists, designers and other professionals to help facilitate discussions, define priorities and keep projects and programs accountable.

While the concept of a green economy isn’t new, the opportunity and path forward for countries, including Australia, is still not clearly defined.

In many cases, reporting and classification tools (also known as taxonomies) are designed for defining, monitoring and reporting purposes. They do not provide rigorous quantification of the jobs and economic impact at stake, missing the economic potential the green economy represents.

To help Australia and other countries across the globe, and in partnership with Oxford Economics, we created a framework specifically designed to assess and tailor economic policy. The framework can help any government determine which sections of the green economy offer the most potential to develop and foster prosperity, create jobs and strengthen global competitiveness. 

This framework is equally useful for countries that already have a green taxonomy, and those who do not. Our analysis provides over 500 green activities spanning nine sectors, to encompass the full green-economy potential.

For more information, please download the report: The Global Green Economy: capturing the opportunity - Arup