The coal lobby may need a new reason for stalling on renewables, as its economic defence begins to fall apart.
Despite reluctance from the Coalition government to speed up and incentivise the transformation of the power grid, jobs in the fossil fuel industry don’t look any safer.
A new report form the Investor Group on Climate Change (IGCC) claims that two-thirds of fossil fuel jobs are currently at risk, as Australia faces the rising threat of stranded assets in regional and remote areas, “leaving these workers more exposed to decarbonisation disruption.”
Representing 2% of Australia’s total workforce, the IGCC estimates that the fallout will be three times larger than the withdrawal of Holden, Ford and Toyota from Australia, which saw 27,500 jobs disappear back in 2017.
It puts the Hunter Valley, two hours outside of Sydney, and the Bowen Surat Basin in central Queensland at the highest risk, representing 90% of all industry jobs and a number of marginal seats in the next federal election.
With jobs related to the thermal coal industry “the most exposed”, some of Australia’s largest coal mines, including the Mount Arthur and Peak Downs operations, look to be among the most vulnerable.
Beyond the mine fences, the broader local economies will also suffer the consequences, with 130,000 jobs in other sectors also put at risk.
Australia has a choice: order or disorder
The reports sets out two different transition paths.
Under an orderly transition, Australia will have exited fossil fuels by 2040, with two thirds of workers needing to find new jobs in different industries each decade. The final cost would be a national economy just 2% smaller by the year 2050, and 4% by 2050.
The alternative is to try and delay the inevitable and pay a far higher cost.
Under a separate ‘disorderly’ transition scenario in which action is delayed a further 10 years, three in four jobs would be lost, with workers pushed out of the industry at a far fast rate. The national economy would be a full 10% smaller by 2100 as a result.
“While employment associated with mining and exploration activities is exposed to transition risks, a delayed action – or inaction – to decarbonise the global economy would amplify the exposure of other sectors to physical risks [such as severe weather or climate change].”
The groups represents some of the world’s largest and most influential investors, super funds and fund managers, controlling a collective $2 trillion.
It urges governments, companies, insurers and other stakeholders to ensure a “just transition” by divesting from dirty industries and allocate funds to a green future, creating new jobs in the process.
Despite Australia feeling increasingly isolated on climate action, renewables satisfied a growing slice of the nation’s energy appetite in 2020, 27% of its total.
Representing 3% growth on the year prior, it translated to a 9% increase in jobs, with wind and solar leading the way.
Momentum is expected to only build from here, with jobs set to nearly double in the next five years to 44,000 by 2025, according to the Australian Energy Market Operator (AEMO).
New areas like green hydrogen will further augment that economic growth in future years by $11 billion a year, creating 11,000 regional jobs by 2050.
But in order to capitalise on these growth industries and “future proof” the economy, there’s no time to waste, the investor group says.
“The transition to net zero emissions by 2050 is happening. It presents huge opportunities to create new jobs and boost economic growth for countries that get ahead of the curve. But governments, companies, investors and all stakeholders must act [now].”