Post-Covid 19: Back to the past or the start of a greener future?

Executive Summary

The measures taken by the Australian Government to prevent the spread of COVID-19 resulted in a rapid reversal of 29 years of economic growth. I argue that the vast resources required to bring about a reboot of the economy provides an opportunity for policy makers to focus on supporting the already emerging opportunities  for addressing Australia’s growing climate crisis by implementing policies that will enable Australia to move away from its current carbon dependency.

This reform away from carbon will prove to be  as dramatic as the earlier reforms undertaken by the Hawke and Keating governments. A dramatic shift away from carbon will form the basis for Australia’s next decades of economic growth. It will also require the development of Australian technology and innovations that will be world-leading, and therefore provide new export opportunities for Australia.

Background

As is the case with most governments world-wide, the Australian government’s concern regarding the recovery from the economic impacts of the COVID-19 crisis has been how to reboot the domestic economy and international trade as rapidly as possible. Understandably this has focussed on short-term interventions so that once the worst dangers to the population’s health have passed, the country can quickly return to normal. Yet the vast resources required to bring about a reboot of the economy provides an opportunity for policy makers to focus on supporting the already emerging opportunities for addressing the growing climate crisis and diminish Australia’s current carbon dependency. 

This move away from carbon will require a new period of economic structural reform equivalent to the Hawke/Keating reforms during the 1980s and early 1990s1, but could lay the basis for further decades of economic growth. Whereas, simply reverting to pre-COVID-19 ‘business as usual’ could solve the immediate economic crisis, but would miss the opportunity for fundamental economic reform. 

"A recent IPSOS-Mori poll shows that support for a fundamental change in economic direction is gaining popularity in Australia, with 57% of Australians interviewed believing that the Australian government should focus on climate change mitigation in its post-COVID reboot of the economy, and only 34% disagreeing or strongly disagreeing." ‘Earth Day 2020’ Ipsos-Mori April 2020

Impacts of climate change/ global warming on Australia

The scientific evidence of the world-wide climate warming effects of man-made carbon emissions are clear. A recently completed National Aeronautics and Space Administration (NASA) study asserts that: 
‘The 10 warmest years in the 140-year record all have occurred since 2005, with the six warmest years being the six most recent years.’ 4 Australia’s Bureau of Metrology (BOM) tracked similar temperature patterns for Australia - based on their figures, ABC News reported that ‘Australia’s annual mean temperature was 1.52 degrees Celsius above the 1961-90 average of 21.8C - well above the previous hottest year (2013) at 1.33C … [while] the national area average rainfall [in 2019] was the lowest on record going all the way back to 1900.’5 This has resulted in consecutive droughts in many parts of the country over the past decade, and the worst bush fire season in living memory in 2019/20. The medium-term health impacts on people living for weeks in smoke enveloped cities such as Sydney, Melbourne and Canberra are yet to emerge. 

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The views expressed here are the author’s, and may not necessarily represent the views of the Institute for International Trade.