Opinion

Kevin Rudd
After the virus: A green recovery

Covid-19 is the biggest economic and social crisis we have faced since the Great Depression and World War II. Australia’s failure then to understand and grapple with the direction of the international economy meant our recovery was much slower and much more painful than it was for almost all our major trading partners.

These were lessons my government imbibed deeply during our response to the global financial crisis a decade ago, spurring demand and preparing our nation for the future.

I’m less confident these lessons have been properly understood this time. At the heart of this is Australia’s failure to take action on a single issue: climate change.

It is easy to forget that this year began with the Great Australian Inferno. As experts told the royal commission into those fires, they were a clear demonstration of climate change. And the inquiry has acknowledged we will face “cascading, concurrent and compounding” natural disasters without action.

When statisticians look back though, they will see that the fires also compounded already faltering growth.

Those bushfires, which choked our cities and shifted the psychology of the nation, brought home two stark realities. First, how vulnerable we are to climate change. And second, just how far behind the rest of the world Australia is in addressing this threat. We saw how dangerous it was to be what I have called “the complacent country”.

Besides the United States under Donald Trump, and Brazil under Jair Bolsonaro, Australia is the only major economy that does not take the need for action on climate change seriously – and does not recognise the economic opportunities that come with taking action. This is not the sort of international company we should be keeping: we should be ashamed of it.

This is not a question of ideology. Boris Johnson’s Conservative government in Britain is one of the shining lights for climate action around the world. In the midst of this crisis, the most coal-dependent economies and right-wing governments in Europe have backed the European Green Deal as a massive pillar of their continent’s recovery. Even China has now announced it will achieve carbon neutrality by 2060, which we ignore at our peril.

Instead of using last summer’s fires and Covid-19 as an opportunity to accelerate the necessary shift to zero emissions, Australia has chosen to delay climate action even further – all the while getting in tongue twists about our refusal to back a long-term target to reach net zero emissions by 2050. This is despite the fact this goal is embraced by industry, business and unions alike, as well as every state and territory government in the nation.

This failure puts both our people and our economy at great risk. And I fear that seeking to untangle our carbon-intensive economy much later than the rest of the world – long after the global economy, including China, has started moving away from fossil fuels – could be what triggers the next recession in Australia.

Australia cannot afford to simply meander through to the other side of this Covid-19 crisis. Our response provides a nation-building opportunity if ever there was one, including the embracing of a genuinely green recovery from Covid-19.

This does not mean I think the government will have a “road to Damascus” moment overnight. It needs to be held to account for refusing to paint an economic picture for our recovery with climate action at its heart. But if the government had the capacity to see this moment for what it is, it would find a vast majority of the country, across the political spectrum, supportive of real progress towards a green economy.

For my part, I believe a genuinely green recovery requires a number of key elements.

First, we need an investment package for the renewable energy industry, including funding to position Australia as a clean energy superpower. This should include investments to accelerate the development of large-scale energy infrastructure projects, such as the green hydrogen projects being explored in the Pilbara. It should also include research and development for other emerging clean energy technologies.

Instead, the government has become obsessed with the possibility of a “gas-led” recovery, including the idea of building pipelines from east to west. This is the modern-day equivalent of dusting off a defence plan that calls for the purchase of more horses and bayonets. It ignores the fact gas should be a transition fuel to renewables. Investing in gas without also backing renewables is only a recipe for even higher emissions over time. It also means we can kiss goodbye to any hope of Australia meeting the targets we set for ourselves under the Paris Agreement.

Second, a green recovery will require Australia to fundamentally rewire our national electricity system, as Anthony Albanese outlined in his recent budget reply. He was right when he said our national electricity system was designed for a different century. Today, one in four households already has solar panels and some states have huge renewable energy infrastructure. Not only would modernising the grid inject $40 billion into our economy, it would also create new jobs, especially in regional Australia. And it would make our entire electricity system – and therefore economy – more stable.

Third, we do need to recognise that electricity prices are too high in Australia and now, more than ever, this needs to change as a wave of inequality and unemployment sweeps our country. That is why, as we did a decade ago in the global financial crisis, we need to heed Ken Henry’s advice and “go hard and go households” in order to accelerate this green shift, especially for those who will benefit from it the most.

Solar panels should become a mandatory part of the national building code for all new structures – which will also spread the economic benefit from the government’s own mooted construction boom. Incentives should be provided for the retrofitting of the remaining national housing stock. And the government should consider subsidising the cost of these installations for social housing to immediately put more money in the pockets of our country’s most vulnerable people by wiping out huge parts of their electricity bills.

We have the benefit of knowing that these kinds of measures work in Australia.

My government’s 2009 Energy Efficient Homes Package saw insulation installed in 1.2 million homes, 20 per cent of our national housing stock. This measure alone has been estimated to have saved approximately 20,000 gigawatt hours of electricity, or about 19.5 million tonnes of carbon dioxide through to today – and a 10 per cent drop in our emissions in real terms.

Fourth, we must overhaul our regulatory framework to keep pace with this economic shift.

Every financial crisis, including the global financial crisis, has resulted in major and lasting changes to the national regulatory environment. The opportunity in the wake of this pandemic is to finally bring corporate and prudential regulation in line with the risks posed by climate change, as the Climate and Recovery Initiative has recommended and as the insurance industry has already begun to factor in.

It’s important that many of the statutory institutions my government established, including the Climate Change Authority, are also revived to bring back dispassionate advice to governments on our level of climate action and to identify opportunities for how this can continue to be scaled up.

The biggest barrier to all this is obviously political leadership.

But we need to remember that climate action is, at its heart, a massive jobs and wealth creation plan that is also entirely in keeping with the government’s priorities to deliver affordable and reliable energy.

Indeed, as groups such as Beyond Zero Emissions have shown, a large-scale renewables plan for Australia would create, in the next two years alone, more than 100,000 jobs that wouldn’t otherwise exist – more than 70 per cent of which would be in regional Australia. And within three years, such a plan would increase real wages by 1 per cent nationally at a time when real wages are currently lower than they were a decade ago.

This vision would make Australia safer, stronger, fairer and more prosperous. No longer do we need to be the international pariah holding back global agreements on the world stage, or staring down the barrel of carbon tariffs from the European Union or a future Democratic administration in Washington.

Australia has a choice in this crisis. We are either courageous enough to see a greater vision for our country, or we allow our government to cower in the face of the Murdoch media’s demands and ignore what remains the greatest moral challenge of our generation. This is part of the reason I have launched a national petition for a royal commission to ensure strength and diversity of media in this country.

The choice should not be hard. It is time for a genuinely green recovery to be at the heart of a national and economic vision for this country, one that matches the moment and inspires a nation.

This is an edited version of a speech delivered as the Sir Roland Wilson Foundation’s 2020 Dialogue.

This is the fifth in a series of essays examining how Covid-19 will reshape key issues facing our nation. To read the others, click here.

This article was first published in the print edition of The Saturday Paper on Oct 31, 2020 as "After the virus: A green recovery".

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Kevin Rudd is a former prime minister of Australia.