The challenge of energy transition is like post-war reconstruction, says NZEA’s Greg Combet

Australia’s journey to net zero carbon emissions by 2050 is as socially and financially challenging as rebuilding after a war, says Net Zero Economy Agency chief Greg Combet.

Transitioning Australia’s $2 trillion economy off its dependency on fossil fuels without causing economic and social harm is akin in difficulty to post-war reconstruction, the chair of Australia’s Net Zero Economy Agency says.

Australia has pledged to reshape its economy and wean itself from fossil fuels to become net zero by 2050, a target some have criticised as too difficult and economically inhibiting.

Greg Combet, the inaugural chair of Prime Minister Anthony Albanese’s Net Zero Economy Agency – the vehicle which will oversee the Net Zero Authority which in turn will help Australia get moving on its renewables transition – said the government understood the scale of the challenge and was committed to achieving it.

“If you think about it, this is like the post-war reconstruction in my mind,” Mr Combet said at a Carbon Institute event on Thursday.

“We are only in the early stages of a pretty long journey and more measures will be needed.

“We have to get started and not be overwhelmed by the challenge of it and the scale of it.”

Last year the federal government legislated emissions reductions targets of 43 per cent by the end of this decade and net-zero emissions by 2050. The bill was backed by business and unions.

Net Zero Economy Agency chair and former federal Labor climate change minister Greg Combet. Picture: Ian Currie

Mr Combet’s comments come as debate rages about the economic cost of net zero emissions.

There are rumblings from some Coalition backbenchers about the benefits of net zero, which has stoked anxiety about potential future swings in political support.

But Mr Combet said the transition was now set and businesses were committed to the change.

“Just over the last few days I have been meeting with a number of companies that are making very significant investments to decarbonise what have been quite emission-intensive businesses,” Mr Combet said.

The scale of the capital needed, however, was staggering. Research commissioned last year by National Australia Bank and Deloitte Access Economics highlighted the great capital reallocation that’s coming with $420bn in new public and private funds needed to help Australia hit its 2050 net zero targets.

The bulk of this will be directed at overhauling energy markets but will also be spent on transport, manufacturing and agriculture.

While global capital markets have tightened, denting the attractiveness of investments, Mr Combet said companies saw spending through a different prism.

“They are thinking not just about a particular return target on that capital expenditure to get board approval, but they are thinking about the longevity of their business and what they are going to need to do to market their product,” Mr Combet said.

Originally published as The challenge of energy transition is like post-war reconstruction, says NZEA’s Greg Combet