By Phil Ruthven AM - Founder, IBISWorld & Ruthven Institute November 27, 2024
Australia is a remarkably innovative nation. Prior to European settlement in 1788, Indigenous Australians pioneered ecological sustainability and developed an extensive knowledge of native flora and fauna, both of which remain outstanding achievements in the 21st century. Since then, Australians have continued to demonstrate ingenuity in many areas, including science, medicine and manufacturing. The nation’s achievements to date, include 15 Nobel Prize-winning innovations shared among 16 Australian recipients since the Prize was first awarded in 1901 (coincidentally, Australia’s year of Federation). It’s a proud past – but what can Australia expect of the future? What challenges will we face in 2020 and beyond? To answer this question, we need to consider several factors with regard to being innovative in an increasingly competitive world: • the changing world order; • our changing mix of industries; • the productivity challenge; • the elements of innovation (the who, what and how); and • the growing importance of intellectual property (IP) for business and economic success. The changing world-order The graph below suggests that the world – containing some 230 nations and protectorates – continues to amalgamate into larger cohorts. Over time, as a society and an economy, we have aggregated families (households) into tribes (local government), then into territories (states) and nations. These nations are now federating into eight regions, as highlighted below; and perhaps, as we move into the 22nd century, these regions will be presided over by an empowered world government or council of sorts. Regionalisation and globalisation are slow and painful processes, and there have been setbacks to both – take Brexit, for example. But, importantly, Australia is now part of the world’s largest region, the Asia Pacific, in terms of population and economic output. Indeed, the larger Asian megaregion (being the Asia Pacific and Indian subcontinent), accounts for two-thirds of Australia’s inbound tourism and immigration and 80% of our goods and services trade, respectively. A tectonic shift is underway in the global economy. The East, which already houses four-fifths of the world’s citizens, has also overtaken the West in GDP terms. Meanwhile, the economic and population pecking order of nations is changing fast, as we see in the following two graphs. 
By Arthur Sinodinos November 27, 2024
Science matters to every aspect of our lives. And yet it is under attack like never before in our lifetime. Climate change is just the latest battleground. The great American science communicator Neil deGrasse Tyson once said, “Once you have an innovation culture, even those who are not scientists or engineers – poets, actors, journalists – they, as communities, embrace the meaning of what it is to be scientifically literate. They embrace the concept of an innovation culture. They vote in ways that promote it. They don’t fight science and they don’t fight technology.” It was recently reported that climate change will be taught as part of the high-school syllabus. Climate sceptics immediately jumped in to suggest that both sides of the argument be presented to students. On the face of it, that sounds fair, except that climate matters are a matter of science rather than a matter of opinion. The antagonism towards science goes further than climate science. Green groups cherry-pick the science, too. They are antagonistic towards genetically modified foods, which do not fit their organic worldview. Anti-vaccination groups prefer half-baked theories and pseudo-medicine to rigorous, evidence-based medicine. Beyond science, expertise, more broadly, is questioned. Some prefer to put their faith in the "wisdom of crowds." This aversion to science is being fuelled by the spread of fake news and preferred facts. Confirmation bias is rife. We look for facts and opinions to back up our point of view or favourite conspiracy theory. These conspiracies often turn on the role of people or institutions we do not like allegedly subverting the popular will. Mistrust of experts is facilitated by the rise of powerful search engines. Access to Google has made us all pseudo-researchers. We can scour the web for information and opinions to back up our preconceptions. How many people self-diagnose using Dr Google? Scientists cannot afford to leave it to others to fight their battles, whether in the halls of power or the public square. This is a hard ask for many scientists, who have traditionally been reluctant to engage in an adversarial way in the public arena. In other words, scientists prefer to let their work do the talking. Accordingly, we do not celebrate scientists in the same way or to the same extent that we do athletes and entertainers. Few scientists are household names, even though the fruits of science are all around us and make life possible on Earth. Appropriately, scientists are also very careful to avoid the kind of emphatic statements and ’soundbites’ so beloved of the media. The scientific method relies on constant querying, testing and retesting of hypotheses to disprove a proposition. Beautiful theories are slain by ugly facts. Some climate scientists argue that it is better not to engage in debate and simply ignore sceptics. Others argue, from a more rigorous point of view, that understanding why someone may be a climate sceptic is the key to potentially talking them around. I sought to engage climate sceptic Malcolm Roberts of Pauline Hanson’s One Nation in dialogue when I was science minister. I brought his researchers together with senior scientists at the CSIRO for what I hoped would be a rigorous, evidence-based process. There were multiple sessions, but agreement was not possible. In retrospect, I’m not surprised. Another approach is to appeal to other views held by these sceptics – for example, those who support the use of nuclear energy in the interests of national sovereignty and self-sufficiency. We cannot wring our hands, ignore the doubters, and/or go to war. This is unduly defeatist. Information and transparency are the best disinfectant. We should build on existing science advocacy efforts. We do have Science Meets Parliament Week and other networking events. We have a Chief Scientist who speaks at public fora, engages in science education and appears before parliamentary committees, but no one person can carry the sector. Recently, the ABC’s Q+A program featured an all-scientist panel, but this is a comparative rarity. A few years ago, medical researchers organised to fight an attempt by the Gillard Government to cut funding for medical research. The fightback was novel and effective, but no one is encouraging scientists to take to the streets in a continual crusade for science. Scientists have to adopt the mindset of advocates. Used to being objective and evidence-based, they would be understandably uncomfortable with pure "spin". But today the facts need help and contextualisation. They otherwise risk being crowded out by assertion, self-interest and wilful ignorance. Evidence-based advocacy is not spin. It is essential to construct a narrative of what science is doing and who benefits. This must be practical and focused on people’s needs, expressed in clear, layman’s terms. Stakeholders who share the interests of scientists and are invested in the outcomes of science should be mobilised in support. They can be marshalled in a coalition of the willing to support the scientific case in public and with politicians, business and other influential members of society. Scientists reaching out to business can be beneficial on both economic and advocacy grounds. Effective collaboration between knowledge creators and industry is vital to maximising the prospects of successful commercialisation of domestic inventions and applications. Collaborating businesses develop a tangible stake in a healthy scientific scene in Australia. The government has taken measures to incentivise such collaboration, including changes to research block grant funding arrangements. The innovation ecosystem is growing, but it takes time to effect the necessary cultural change in the scientific and business communities. The American experience is a useful benchmark. Scientists should engage with politicians on all sides to establish constructive, long-term relationships. While the government of the day is always relevant, the opposition and independent members and senators should not be neglected. The opposition will one day be in power and crossbenchers can exert the balance of power in either chamber on occasion. Networking with new politicians is a useful investment that can pay off when these people are promoted into positions of power and influence. Arthur Sinodinos AO is an Australian diplomat and former Liberal Party politician who was an Ambassador to the United States from February 2020 until March 2023.
By The Hon Anthony Albanese, Prime Minister of Australia November 7, 2024
Following the mining investment boom, the sector is now undergoing a productivity boom, though its true value is yet to be fully captured downstream.
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Frank Jotzo • November 11, 2024

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.

This potential could become the basis for large new energy industries that would serve to future-proof our economy, with investment volumes over coming decades potentially 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 genuine commitment to climate-change action – all moves in stark contrast with the present federal-policy of a "gas-led recovery". 


Fossil fuel demand trajectories 


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. 


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 ambitious 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. However, the lion’s share of investment in new energy production, both globally and in Australia, is now in renewables. 


In the last eight years, the average cost of solar photovoltaic 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 hydrogen-powered heavy vehicles. 


Renewables in industry and trade 


The demand for clean electricity will increase dramatically, particularly for industrial energy 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, fertiliser, "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 latitudes of Europe and East Asia would be importers. Global-energy trade patterns would then be largely determined by renewable-energy advantage, rather than fossil fuel endowment. 


Australia’s opportunity 


With abundant access to interior and coastal space and ports, as well as a record of successfully establishing large-scale resource processing industries, Australia is extremely well placed to become a large player in a global renewables-based export industry. Our stable political, regulatory and investment framework, in particular, sets us apart. 


These potential future industries could eclipse the value of current fossil fuel production, especially if Australia were to become a large producer of “green steel", processing iron ore mined in Western Australia using renewable energy. Renewables projects are also planned for the Northern Territory, with a combined commercial investment value in the tens of billions.


In the case of green steel, the electricity-supply capacity alone would require hundreds of billions of dollars invested, without accounting for the necessary industrial infrastructure – and this could be but a taste of what’s to come. In fact, investment volumes above the trillion-dollar mark are possible. 


The government’s imperative


Any major investments in Australia will be made by private investors, not governments; however, the creation of a new energy economy hinges on state and federal governments creating suitable regulatory frameworks to attract large-scale green-industry investments and international capital. Governments need to ensure that Australian communities come out on top, firstly by making arrangements for taxation and royalties that attract private investment while financially benefiting the community. 


The federal government also has an important role in supporting R&D and pilot projects through the Australian Renewable Energy Agency (ARENA) and the Clean Energy Finance Corporation (CEFC). Both agencies are expected to invest in a much wider range of activities this decade, but will need much greater funding to be truly effective catalysts of industrial change. 


Finally, Australia needs to signal that it is on board with global action on climate change. Australian governments will be tempted to try to walk both sides of the road – by getting into new green industries while supporting the continuation, or even the expansion, of the coal and gas industry -- which could become a major obstacle to progress. Instead, we must be committed to phasing out fossil fuels and unequivocally supporting the shift to a decarbonised world economy. That means devising a national strategy for slashing emissions to net-zero while establishing a clean-energy export industry, and supporting this strategy through policy and public spending. Anything less risks the country missing out on a starring role in one of this century’s big economic booms.


Frank Jotzo is a professor of environmental economics and climate change economics at the Australian National University's Crawford School of Public Policy where he leads the Centre for Climate and Energy Policy. His research focuses on policy for climate change and energy in the context of economic reform and development.


More Transformations Articles

By Phil Ruthven AM - Founder, IBISWorld & Ruthven Institute November 27, 2024
Australia is a remarkably innovative nation. Prior to European settlement in 1788, Indigenous Australians pioneered ecological sustainability and developed an extensive knowledge of native flora and fauna, both of which remain outstanding achievements in the 21st century. Since then, Australians have continued to demonstrate ingenuity in many areas, including science, medicine and manufacturing. The nation’s achievements to date, include 15 Nobel Prize-winning innovations shared among 16 Australian recipients since the Prize was first awarded in 1901 (coincidentally, Australia’s year of Federation). It’s a proud past – but what can Australia expect of the future? What challenges will we face in 2020 and beyond? To answer this question, we need to consider several factors with regard to being innovative in an increasingly competitive world: • the changing world order; • our changing mix of industries; • the productivity challenge; • the elements of innovation (the who, what and how); and • the growing importance of intellectual property (IP) for business and economic success. The changing world-order The graph below suggests that the world – containing some 230 nations and protectorates – continues to amalgamate into larger cohorts. Over time, as a society and an economy, we have aggregated families (households) into tribes (local government), then into territories (states) and nations. These nations are now federating into eight regions, as highlighted below; and perhaps, as we move into the 22nd century, these regions will be presided over by an empowered world government or council of sorts. Regionalisation and globalisation are slow and painful processes, and there have been setbacks to both – take Brexit, for example. But, importantly, Australia is now part of the world’s largest region, the Asia Pacific, in terms of population and economic output. Indeed, the larger Asian megaregion (being the Asia Pacific and Indian subcontinent), accounts for two-thirds of Australia’s inbound tourism and immigration and 80% of our goods and services trade, respectively. A tectonic shift is underway in the global economy. The East, which already houses four-fifths of the world’s citizens, has also overtaken the West in GDP terms. Meanwhile, the economic and population pecking order of nations is changing fast, as we see in the following two graphs. 
By Arthur Sinodinos November 27, 2024
Science matters to every aspect of our lives. And yet it is under attack like never before in our lifetime. Climate change is just the latest battleground. The great American science communicator Neil deGrasse Tyson once said, “Once you have an innovation culture, even those who are not scientists or engineers – poets, actors, journalists – they, as communities, embrace the meaning of what it is to be scientifically literate. They embrace the concept of an innovation culture. They vote in ways that promote it. They don’t fight science and they don’t fight technology.” It was recently reported that climate change will be taught as part of the high-school syllabus. Climate sceptics immediately jumped in to suggest that both sides of the argument be presented to students. On the face of it, that sounds fair, except that climate matters are a matter of science rather than a matter of opinion. The antagonism towards science goes further than climate science. Green groups cherry-pick the science, too. They are antagonistic towards genetically modified foods, which do not fit their organic worldview. Anti-vaccination groups prefer half-baked theories and pseudo-medicine to rigorous, evidence-based medicine. Beyond science, expertise, more broadly, is questioned. Some prefer to put their faith in the "wisdom of crowds." This aversion to science is being fuelled by the spread of fake news and preferred facts. Confirmation bias is rife. We look for facts and opinions to back up our point of view or favourite conspiracy theory. These conspiracies often turn on the role of people or institutions we do not like allegedly subverting the popular will. Mistrust of experts is facilitated by the rise of powerful search engines. Access to Google has made us all pseudo-researchers. We can scour the web for information and opinions to back up our preconceptions. How many people self-diagnose using Dr Google? Scientists cannot afford to leave it to others to fight their battles, whether in the halls of power or the public square. This is a hard ask for many scientists, who have traditionally been reluctant to engage in an adversarial way in the public arena. In other words, scientists prefer to let their work do the talking. Accordingly, we do not celebrate scientists in the same way or to the same extent that we do athletes and entertainers. Few scientists are household names, even though the fruits of science are all around us and make life possible on Earth. Appropriately, scientists are also very careful to avoid the kind of emphatic statements and ’soundbites’ so beloved of the media. The scientific method relies on constant querying, testing and retesting of hypotheses to disprove a proposition. Beautiful theories are slain by ugly facts. Some climate scientists argue that it is better not to engage in debate and simply ignore sceptics. Others argue, from a more rigorous point of view, that understanding why someone may be a climate sceptic is the key to potentially talking them around. I sought to engage climate sceptic Malcolm Roberts of Pauline Hanson’s One Nation in dialogue when I was science minister. I brought his researchers together with senior scientists at the CSIRO for what I hoped would be a rigorous, evidence-based process. There were multiple sessions, but agreement was not possible. In retrospect, I’m not surprised. Another approach is to appeal to other views held by these sceptics – for example, those who support the use of nuclear energy in the interests of national sovereignty and self-sufficiency. We cannot wring our hands, ignore the doubters, and/or go to war. This is unduly defeatist. Information and transparency are the best disinfectant. We should build on existing science advocacy efforts. We do have Science Meets Parliament Week and other networking events. We have a Chief Scientist who speaks at public fora, engages in science education and appears before parliamentary committees, but no one person can carry the sector. Recently, the ABC’s Q+A program featured an all-scientist panel, but this is a comparative rarity. A few years ago, medical researchers organised to fight an attempt by the Gillard Government to cut funding for medical research. The fightback was novel and effective, but no one is encouraging scientists to take to the streets in a continual crusade for science. Scientists have to adopt the mindset of advocates. Used to being objective and evidence-based, they would be understandably uncomfortable with pure "spin". But today the facts need help and contextualisation. They otherwise risk being crowded out by assertion, self-interest and wilful ignorance. Evidence-based advocacy is not spin. It is essential to construct a narrative of what science is doing and who benefits. This must be practical and focused on people’s needs, expressed in clear, layman’s terms. Stakeholders who share the interests of scientists and are invested in the outcomes of science should be mobilised in support. They can be marshalled in a coalition of the willing to support the scientific case in public and with politicians, business and other influential members of society. Scientists reaching out to business can be beneficial on both economic and advocacy grounds. Effective collaboration between knowledge creators and industry is vital to maximising the prospects of successful commercialisation of domestic inventions and applications. Collaborating businesses develop a tangible stake in a healthy scientific scene in Australia. The government has taken measures to incentivise such collaboration, including changes to research block grant funding arrangements. The innovation ecosystem is growing, but it takes time to effect the necessary cultural change in the scientific and business communities. The American experience is a useful benchmark. Scientists should engage with politicians on all sides to establish constructive, long-term relationships. While the government of the day is always relevant, the opposition and independent members and senators should not be neglected. The opposition will one day be in power and crossbenchers can exert the balance of power in either chamber on occasion. Networking with new politicians is a useful investment that can pay off when these people are promoted into positions of power and influence. Arthur Sinodinos AO is an Australian diplomat and former Liberal Party politician who was an Ambassador to the United States from February 2020 until March 2023.
By The Hon Anthony Albanese, Prime Minister of Australia November 7, 2024
Following the mining investment boom, the sector is now undergoing a productivity boom, though its true value is yet to be fully captured downstream.
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