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ANGE:

From Schwartz Media, I’m Ange McCormack. This is 7am.

When US President Joe Biden was looking at how to transform the American economy for an electrified world, he turned to an Australian…

Dr Saul Griffith had a seat at the table as the future of American industry was sketched out.

So how will America’s plan affect Australia? Are we adapting fast enough? And what’s the cost if we don’t?

Today, former advisor to the Biden administration on climate policy, and contributor to The Saturday Paper, Saul Griffith, on the potential of Australia’s green economic boom.

It’s Tuesday September 26.

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ANGE:

Saul, you've spent years looking into how we can avert climate disaster by advising governments around the world. And it comes down to how fast we can transition the power we use from fossil fuel sources to renewable ones. So to begin with, is that transition happening fast enough?

SAUL:

By one measure, no, and by one measure, yes. But fundamentally, the answer is no.

The way in which we may be actually on target is if you look at the rate of expansion of the solar industry, the rate of expansion of the battery industry, the rate of expansion of the wind industry, if we keep expanding those industries at their current rate, all of those industries are growing more than 20% a year. We actually will produce enough clean energy to power the whole world by about 2037 or 2038.

Where the progress is held up around most of the world now… it's the rate at which the public allows us to build transmission infrastructure and use solar projects, new wind projects. And so it's actually public protest in a lot of places and NIMBYism that is putting the brakes on it. And also the regulatory process for approvals for a lot of these things is just quite frankly, too long. It takes us too long to start new big projects.

ANGE:

And if we think of the climate crisis as an emergency, which we know it obviously is. What kind of emergency response should we expect from governments to address it?

SAUL:

The only real precedent is World War II.

All the governments of the world declared a wartime emergency. The wartime emergency gives governments special powers to speed up permitting process and to, in fact, compel industry to do what the government needs, as opposed to allow industry to purely search for maximum profits.

Audio excerpt – UK Broadcast:

“Tuesday, July 23rd. Today in Europe, Great Britain will get the largest budget in its history, and the British people will be about to get some 60% of their national income and the defence of their land and their attempt to overthrow totalitarianism.”

SAUL:

Basically, starting in 1939, Churchill lobbied Roosevelt and said, “We're not going to win the war unless America manufactures everything for the war.”

Audio excerpt – Franklin D. Roosevelt:

“We have the men, the skill, the wealth, and above all, the will. We must be the great arsenal of democracy.”

SAUL:

During World War II, in four years, America doubled the production of electricity so that they could produce enough aluminium and magnesium for all aeroplanes. They went from building a few aircraft every year to 40,000 aircraft a month.

Audio excerpt – UK Broadcast:

“America's vast resources are harnessed to the job of being the world arsenal for this and other democracies. Its present day production of armaments is but a mere fraction of the great job that lies ahead.”

SAUL:

And in World War II, you had to build aeroplanes, you had to build tanks, you had to build guns, you had to build ammunition, you had to build jeeps and radios. This time around, you have to build wind turbines, and solar cells, and batteries, and electric vehicles, and inverters and transmission lines.

ANGE:

And Saul, you worked on the Biden administration's policy on electrification, the IRA in America. What does that policy look like? What's the American approach?

SAUL:

I think American… Biden's climate policy as defined by their Infrastructure Investment Act, and the Inflation Reduction Act is the biggest climate policy in human history of any country.

Audio excerpt – Kamala Harris:

“On this vote. The Senate being equally divided. The vice president votes in the affirmative and the bill as amended is passed.”

SAUL:

So there's a production incentive, tax credit.

Audio excerpt – CNBC Reporter:

“And the CEOs agreed this money in the form of both direct subsidies and tax breaks to consumers and manufacturers will give small start-ups a big boost, not to mention the venture capital firms that have funded them so far.”

SAUL:

And so that's got everyone in the renewable industry racing to build more wind, and more solar, and even more nuclear. The other side of that coin…

Audio excerpt – Joe Biden:

“It's going to offer working families thousands of dollars in savings by providing them rebates to buy new and efficient appliances, weatherise their homes, get tax credit for purchasing heat pumps, and rooftop solar electric stoves, ovens, dryers.”

SAUL:

And that represents about $140 billion-ish of the $370 billion IRA. So it's all incentive based.

By the America's involvement and investment through the IRA in transforming the global marketplace as the world's largest economy, and largest energy economy, there's really not a lot of option but to play along similar lines to the IRA.

There is a little bit of a myth in certain circles in Australia that the Inflation Reduction Act is an existential threat to Australia. But the IRA is actually an enormous opportunity. Even the IRA by design was designed to permanently transform the global energy marketplace.

By getting over all of the industries that we need up to sufficient scale, that they will then be producing electric cars cheaper than you can buy an internal combustion engine.

Producing wind, and solar, and batteries so cheaply and at such scale that they are slam dunk cheaper than coal and gas for everything.

I think it's actually very good policy. It would really be in Australia's interest to do both of those things in roughly the same way.

And if you do, there's an enormous benefit.

ANGE:

Coming up after the break - what can Australia learn from America’s green revolution?

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ANGE:

So, Saul if Australia did sort of borrow from what the IRA has done in America or expand on it, what would that practically look like in Australia for consumers, but also for our government spending? Like, how much would this kind of transformation cost us?

SAUL:

I don't think it's the right language to talk about the cost of it. It's really an investment. And if the government makes those investments widely… wisely, sorry, the country, and maybe the government, will even profit from the project. Sorry. That's a coal train you can hear going past in my background. So the great irony of my life is that I live next to a coal railway line. So we know now, and we did this modelling a few years ago, but now the CSIRO, and the Energy Consumers Australia, and the Grattan Institute have all replicated the results and we all roughly agree that every Australian household could save three, four or five thousand dollars a year by about 2030 by being all electric household, with all electric vehicles, all electric appliances, and powered by renewable electricity, including the cheapest electricity delivered to you, which is your rooftop solar. That's a $40 billion saving to the Australian economy. And then, you know, on the exports industries, Australia absolutely can lead the world due to its natural advantages. Not only we're one of the only countries that can produce, not just enough electricity renewably for ourselves, but we can produce a huge excess that could drive our export industries making green steel, green aluminium, green lithium, green copper, you go through the whole list. Conservative versions of that could have us tripling or quadrupling the value of our exports. So we've got to stop having a conversation framed around what this cost. We've got to have that conversation about what this saves us, what this generates for us, and that this is an investment, not an expense.

ANGE:

And I suppose it's also about what it costs if we don't do it right. And you know, the energy transition you're talking about, it comes with all of these huge opportunities. But what are some of the risks if we get this wrong? Could Australia end up wasting the opportunity we have as the world electrifies?

SAUL:

Oh, absolutely. We could screw this up. In some respects, right now it's interesting globally the spoils of victory in this fight go to the countries that are the most ambitious. I worry that we will choose a very middling set of policies, and that will cost us.

I mean, we're already 20 years behind China, the whole world is 20 years behind China. China produces 90% of the world's solar cells. It produces 90% of the world's batteries. So everyone in the world is trying to play catch up. Now, Australia has benefited from China doing that, because we do provide them with a huge amount of raw materials. And there's a certain national security argument to this: if only China makes solar cells and only China makes batteries and only China makes wind turbines, then your country doesn't have energy independence and energy security. So there's an argument that we should have at least a small domestic solar industry as a reasonable domestic wind industry, even batteries, so that we can stand on our own two feet in case of emergency, whether that's war, pandemic, any of the things.

ANGE:

And Saul, you obviously speak to Australian politicians about this. Do you get the sense that they're willing to go far enough and treat the climate crisis that we're in like an emergency?

SAUL:

There's two answers to your question. It was going to be one answer, but then you said emergency at the last minute. So the first answer is we are engaged with all of the relevant ministers and officers within government. I see them grappling right now with the question of what is enough and what do we do? And there is a very earnest and a very honest attempt to think about going big. I'm impressed with the honesty of the government that's looking at what it has to do. Are we treating it yet like a national or global emergency? That's the second part of your question. Not quite yet. If we were serious and we were treating this like an emergency, we'd be trying to find who understands actually not how to finance industries, but how to build industries, who understands the whole supply chain, and get them engaged, helping the government with a full stack approach. So we're not quite there, but I am encouraged. A lot of people want to think that America does everything bigger and better. I don't think that's true. I see just as much motivation and intense interest in getting this right here as I ever saw in America.

ANGE:

So I guess it's just about making that happen.

SAUL:

I think, you know, you have to summarise the whole conversation. It's just, we got to do it.

When I talk to the engineers around Australia, every engineer I know between age 20 and age 60 knows we can do it, wants to do it.

They're excited and raring to go. It's just like, can you clear the decks and give me the chance? I'll build it. Just create the environment.

Certainly, I think we need broader public engagement and protest. I think we've got to build a new and very different kind of environmentalist movement. If you think about the environmentalist movement of the seventies, it grew up around shutting things down and stopping things. It was an environmentalism of “no”. We need a really new, different environmentalism of “yes”. Yes, I want those offshore wind turbines on my horizon. Yes, I want those solar plants in my region. Yes, I want electric vehicles in my driveway. And that's going to be a much broader coalition than the traditional environmentalist coalitions.

ANGE:

Saul, thanks so much for your time today.

SAUL:

Thank you.

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ANGE:

Also in the news today…

Home affairs secretary Mike Pezzullo has been forced to stand aside over allegations he sought to influence politics – including over ministerial appointments under the Coalition government of Scott Morrison.

As secretary of the mega-department of home affairs, Pezzullo oversaw Australia’s offshore detention and immigration systems for almost a decade.

And…

The latest polls on the Voice to Parliament show declining support.

Newspoll showed a two-point fall in the past three weeks, with just 36% of voters indicating they would support the body, with the ‘No’ vote rising to 56% – an increase of three points.

I’m Ange McCormack, this is 7am. We’ll be back again tomorrow.

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