Summary
Australia needs a 21st Century industry policy so we can become an industrial success story as the world moves to net-zero carbon emissions.
The policy should embrace heavy manufacturing but push down emissions from existing facilities, encourage low- or zero-emissions refurbishments and new facilities, and support export-led industries that can flourish in a net-zero world.
Unless governments manage the coming industrial revolution well, Australia’s social fabric could tear, especially in the regions of NSW and Queensland where tens of thousands of coal-mining jobs will disappear between now and 2050.
Coal and gas will inevitably decline, which is frightening for people who rely on those industries for a living and challenging for governments that rely heavily on those sectors for economic growth.
But if government and industry can forge a new strategic partnership, Australia will be able to create jobs and boost prosperity in a net-zero world by building export-oriented industries based on our vast renewable energy and mineral resources.
To seize this once-in-a-century opportunity, the federal government should:
- phase out programs and policies that encourage greater extraction and use of fossil fuels
- reduce emissions baselines for existing facilities and set stringent benchmarks for new facilities
- establish an industrial transformation future fund to share the risk of major capital replacements using low- or zero-emissions technology
- provide funding and other support to export-oriented industries that can flourish in a net-zero global economy, such as green steel for transmission lines, green aluminium for solar panels, and lithium and nickel for electric vehicles and batteries.
To help people and communities hit hardest by the decline of coal, state governments should:
- direct all or most coal royalties to coal regions for as long as coal mining continues
- set up regional transition authorities in the coal regions of central Queensland and the Hunter Valley in NSW to help develop alternative economic activities to take over from coal mining
- create sovereign wealth funds so that the benefits of the coming ‘critical minerals’ mining boom can be shared with future generations
- enforce strict environmental protection regulations on industrial and mining projects, so citizens aren’t left with a degraded environment and Australia enhances its reputation as a clean supplier.
Australia must embrace the challenges and grasp the opportunities of the global net-zero revolution, because the consequences of failure are too ugly to contemplate and the benefits of success are too great to ignore.