Business groups insist on climate plan modelling, economists doubt jobs claim

Economists and business groups say the Morrison government’s refusal to release modelling underpinning its net-zero emissions plan makes it impossible to judge whether Australians will be better off.

ANU economist Warwick McKibbin.

Economists and business groups say the Morrison government’s refusal to release modelling underpinning its net-zero emissions by 2050 plan makes it impossible to judge whether Australians will be better off under the plan.

The government relied on “top-down” economic modelling by the Department of Industry, Science, Energy and Resources, alongside “bottom-up analysis” by consulting firm McKinsey to conclude that its plan would leave Australians $2000 better off on average than if no action were taken.

The modelling also estimated that “more than 100,000 new jobs could be created in industries including critical minerals, clean hydrogen, renewable energy, green steel and alumina, many in Australia’s regions”.

“Australia’s export-oriented sectors are projected to grow significantly in aggregate, with the value of Australian exports more than tripling between 2020 and 2050,” the report said. “Modelling shows that, with this technology-led plan, Australia will prosper as we decarbonise. Our plan will not cost Australian jobs.”

Pressed on why the government had not released that modelling, Scott Morrison said: “Today’s about the plan. We’ll be releasing modelling at another time.”

The country’s leading climate economist, ANU professor Warwick McKibbin, said “it may be possible” that Australians would be better off under the government’s plan, but a lack of detail made it impossible to tell.

“There are no new policies in that plan, and no way of knowing whether it would succeed,” Professor McKibbin said. “The question is: what are we doing to create that higher income?”

Professor McKibbin said the claim no jobs would be lost in the transition was “highly unlikely”.

“When the Newcastle steelworks shut down there were lots of jobs lost, and it took a while – maybe over a decade – but eventually they got retrained,” he said.

“I would love to see the modelling. All we have is a glossy presentation with a whole range of management consultant graphs.”

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said businesses and industry “must have access to the modelling behind the government’s plan to ensure the effective implementation of transitional measures”.

Independent economist Nicki Hutley said it was not controversial to quote modelling that showed transitioning towards net zero would leave the economy better off than if no action were taken – a recent survey by the Economics Society of Australia showed nine in 10 economists believed that to be true.

But Ms Hutley, a Climate Council councillor, said it was “absolutely” important for the government to release the modelling in full in order to assess the validity of what was being claimed. “What we do need to know is what are the assumptions underpinning the model,” Ms Hutley said.

Ms Hutley also said the Prime Minister’s claim that no jobs would be “at risk” under the government’s plan was not credible, and that the focus had to be on making sure more jobs were gained than destroyed.

“You can’t get to net zero without losing some jobs,” she said. “The key is to create the right policy and regulatory settings to attract that private sector investment to create jobs and growth.”

The plan states that renewables will provide about 85 per cent of electricity generation by 2050. But economists said a detailed breakdown of the forecast energy mix by the middle of the century was a crucial assumption that would reveal the estimated structural shifts in the national economy in a carbon-neutral future, and where the major investments – and therefore jobs – would be.