I’d like to begin by acknowledging the traditional owners of the land and pay my respects to owners past, present and emerging.
Can I thank the Sydney Morning Herald for the opportunity to address this Sustainability Summit.
The “Herald” is an important institution in the history and daily life of our state. Its enduring contribution to public debate reflects the commitment of the people who work there and the continued importance of daily newspaper journalism.
In a constantly evolving media industry one thing remains clear to me: the importance of having a vibrant and fearless paper of record, challenging authority and telling the stories of our shared lives. One of those important stories is the sustainability of our lives in this place and how we can do better.
And that’s why we are all here today.
We live in extraordinary times. At the start of 2020 I don’t think anyone could have envisaged the disruption we have experienced this year.
The coronavirus global pandemic has upended so many aspects of our lives. Managing this global crisis has forced governments, businesses (and everyone else) into uncharted territory. We’ve never had to live like this before. Few decision makers are in their comfort zone. No leader or Government wants to lock down its cities or close its borders. These are difficult choices, alien to our idea of a shared, inclusive society.
To date, the primary focus of governments in responding to the pandemic has been to protect the public. As a result, large parts of our engine of economic creativity and prosperity have had to temporarily make way for safety and survival. This has up-ended financial markets, stalled investment, increased unemployment and driven some sectors of the economy close to the brink. It is the biggest economic shock in peace time since the 1930s.
The next, and even bigger, challenge will be how to rebound the economy from this deep recession; to get NSW and the country back to work.
The NSW government has already re-committed to our $100 billion infrastructure pipeline, established a $3 billion Infrastructure and Jobs Acceleration Fund and allocated almost $16 billion to stimulus measures to support the recovery. The NSW Treasurer Dominic Perrottet has reiterated throughout this pandemic that we will always put people before numbers: we think the most effective pathway out of recession is for government to support investment and job creation. A half-hearted approach to putting the economy back on its feet will only protract the suffering.
We are at a crossroads
The truth is that governments and the private sector are going to need to unleash an unprecedented wave of spending to get our economy moving again. \
To get NSW back to work.
This is going to see governments borrow huge sums, effectively passing some of this debt on to future generations. If we are going to impose this cost on them, we need to make sure that they will see the benefit. I don’t just want to see our children paying the interest on our debt, I want to see our children earning returns on our investments.
What we decide to spend our nation’s wealth on over the next twelve months is going to determine the type of jobs we and our kids are going to have, the living standards we are going to enjoy, and the environment we are going to endow to them.
In making these decisions, we are at a cross-roads: we can either reignite the ideological wars of the past or build a more sustainable future.
We could frame our vision through the rear view mirror, focussing on the past decade where fear, division and scaremongering drove our nation’s agenda.
Or, we could look forward: use our success in dealing with this crisis to lay a foundation for new era of transformation built on a belief that through good ideas and hard work we can build a better, more sustainable and more prosperous country.
If we really want to repay future generations with interest, then we should borrow to start rebuilding them a low carbon world today.
The economic case for clean recovery
We know that the rest of the world is moving on climate change. In fact, more than half the world’s GDP is created in jurisdictions that have signed up to deliver net zero emissions by 2050.
We are seeing some of the world’s leading companies like Volkswagen, Apple, and BHP commit to not only achieving net zero emissions in their own business activities but also commit to reduce the emissions of their suppliers and their
products as well.
And even big oil and gas companies who have profited from extracting fossil fuels for decades are planning for life beyond carbon, moving to decarbonise their businesses.
Decarbonising the economy is going to require a redesign of most sectors within it; energy supply and industrial processes, the cars, trucks and buses we move in and the houses and buildings we live and work in. It will change agriculture and land management; we will need to re-think how we manage risk in some increasingly bushfire prone regions – and so does the rest of the world. That is going to create huge opportunities.
We have already seen Tesla, a company that was nowhere a decade ago become the most valuable car company in America’s history.
There are also real risks. There are many ways we can get this wrong. If we don’t move at all, if we don’t move fast enough or head in the wrong direction then NSW and Australia could find itself on the wrong side of megatrends like rising carbon-based protectionism while other economies steal our march in new clean technologies and industries.
There is a real risk that we become a rust bucket state.
We should be using this recovery to build a low carbon economy. Not just because it’s good for the environment but because it’s good for the State, the country, and it’s the kind of economy our kids will prosper from.
This is not just wishful thinking. The International Monetary Fund and the International Energy Agency have recently joined forces in the post-COVID environment to develop a Sustainable Recovery Plan: in their words, it is a once-in-a-lifetime opportunity to reboot economies, create a wave of new jobs while accelerating the shift to a decarbonised future. Their plan focusses on how government spending over the next three years can maximise growth, create jobs and deliver sustainable development goals.
Today, I am proud to be releasing the NSW Chief Scientist’s report into the opportunities for NSW in a low carbon economy.
The Chief Scientist identified 65 economic opportunities across the key sectors of the state’s economy, including services, energy, industry, the built environment, land management and transport. There are many great ideas in this report: too many to mention each of them today, so I’ll flag a few now and invite you to read the report. I would like to briefly highlight three areas: green chemicals, agriculture and hydrogen.
The idea of carbon capture was originally adapted from technologies used in the oil and gas industries to push hydrocarbons out of underground reserves by pumping in carbon dioxide. The idea to store this was to do this without the resource extraction: to capture and store the greenhouse gas underground where it had no impact on the atmosphere.
Carbon, capture and storage works. Its challenge is cost: it consumes a lot of energy and requires proximate geological storage. The Chief Scientist has taken this idea one step further, suggesting we look at using the captured carbon dioxide as an input to manufacture chemicals like ammonia, magnesium carbonate used in fertilisers and even carbon-neutral fuels, with the potential to tap into multi-billion-dollar global markets.
The report also identified enormous opportunities in regional NSW through increased sequestration of greenhouse gases from land management, development of lower emissions livestock and developing markets for a range of sustainably branded products. The National Farmers Federation is currently developing a farm biodiversity certification scheme, one of a number of evolving certification systems in the sector.
Carbon farming in NSW has the potential to earn from $11 to $24 billion by 2030 simply by adapting existing land uses to maximise the amount of carbon stored in vegetation and soils.
The report also identifies opportunities to use gene technologies and synthetic biology to create climate change resistant crops, resistance to disease, reduced pesticide use and increased yields. By developing feed supplements to reduce emissions from livestock, NSW could develop a competitive advantage in high value add consumer markets.
The clean-tech buzzword in 2020 is hydrogen. Hydrogen has been around for a century, used to refine steel and other metals. It was also used to power the Saturn V rockets that sent man to the moon while the first hydrogen fuel cells
provided electricity and fresh water to the astronauts.
The spectacular fall in cost of renewable generation has rapidly accelerated the potential for hydrogen to play a critical role in our decarbonised future.
Hydrogen can be produced by electrolysing water with electricity. If this process can get cheap enough, then abundant and cheap renewable energy can be used to make abundant and cheap hydrogen. This green hydrogen can then be stored and used as a fuel to firm renewables in electricity and combusted to provide zero-emissions high temperature heat for industrial processes like steel and cement making. It could power trucks, buses and cars, ships and trains.
Hydrogen is to climate change what a vaccine is to COVID-19. Put simply: a breakthrough that changes the world.
Energy is central to decarbonising
The key opportunities in low carbon are highly interdependent, and most link back to energy. Australia has some of the most abundant and lowest cost renewable electricity in the world, and so is well placed to convert this into low cost green hydrogen. That is why, during this crisis, I was so proud to announce nearly $110 million to develop the country’s first co-ordinated renewable energy zones in the Central West and New England. Renewable energy zones are modern day power stations which will provide the state with the clean, cheap electricity needed to make the most of these opportunities that the chief scientist has identified.
NSW also has a number of locations that could become hydrogen hubs to store and export the fuel. We shouldn’t kid ourselves, there is ferocious global research and investment into all parts of the hydrogen supply chain. It is essential that we are in the pack and ready to make the most of commercial opportunities if and when they arrive.
What does a successful sustainable recovery look like? The clues are in today’s report. Maybe borrowing to fast track new hydrogen projects, and new low emissions industrial precincts. To start removing the barriers to electrification of cars with a strategic roll out of EV chargers around the state. To work with our major industries to help them transition manufacturing to low emissions processes. To getting physical and system changes in regions to start generating multi-billion-dollar incomes from carbon farming. To building the renewable energy zones to power the economy of the future.
Of course, a low carbon recovery is not only good for our economy. It is also necessary to protect our way of life.
Last summer’s bushfires showed us an Australia, none of us want to see. An Australia where countless regional communities feared for their safety, the safety of their families and loved ones and for their homes. Over the summer we saw Sydney – the nation’s most famous city shrouded in smoke, where we couldn’t enjoy our harbour and beaches.
This is not the Australian way of life. This is not the way of life our parents enjoyed and this is not the way of life any of us want to leave for our children. The recent bushfires showed exactly what the scientists warned us would happen – hotter, drier summers, more extreme weather events leading to catastrophic bushfires.
In fact over the past 30 years the scientific consensus has consolidated. It is real, and it is happening right now. In the inquiry into the recent catastrophic bushfires in NSW, former Chief Scientist Mary O’Kane said that climate change clearly played a role” in creating the conditions that led up to the fires, and we should expect conditions like that, or worse, in the future.
To ignore the threat of climate change, or to continue to defer decisive action into the future is counter intuitive to what we can see has worked. To mitigate this risk we need to reach global net zero emissions by around 2050.
The coronavirus pandemic is the first major crisis our country has faced in the twenty first century. I think we’re up to the challenge. It is during difficult times that the cream rises to the top.
The way NSW has handled this pandemic is the envy of the world. Now, we have had some luck; but our track record is firmly based on Gladys’s focus on making decisions based on science and expert advice.
No leader anywhere in the world has handled this crisis better than Gladys Berejiklian. Gladys is famous for her work ethic, humility, attention to detail and intelligence.
Our success has also been based on the efforts of the Australian people. We have taken a typically Australian approach to this crisis: we have made practical decisions based on the facts in front us; we have worked hard to keep our businesses going and our children’s education continuing; and have made sacrifices to our personal freedoms to keep others from getting sick.
We now have an imperative for urgent economic repair, multi-billion dollar spending to rebuild the economy. That provides an opportunity to transform NSW and the country into a smarter, cleaner, more durable and more future focussed place, one that can make the most of its new competitive advantages in a rapidly changing world.
After the second world war our ancestors had to rebuild the nation following the great challenge of their generation. They didn’t try to recreate life as it was before the war, they imagined a world that was fairer, peaceful, and prosperous. They helped take us to the Moon, they cured disease and lifted millions out of poverty.
Theirs was a generation that rose to the challenge of the times.
Now is the time for our generation to do the same.