Prior to the onset of the coronavirus pandemic, both the UK and Australia had been grappling with the devastating effects of another crisis: climate change. As both our governments seek to reboot our economies, both nature restoration and the development of clean technologies provide great opportunities to reduce emissions while also generating jobs and growth.
In the early part of this year, the UK was submerged by winter floods, culminating in the wettest February on record. Meanwhile, we watched in horror as bushfires tore through Australia, destroying more than a fifth of the forest area and seriously imperilling over 100 species. For many, these images offered a stark reminder of the urgent need for more ambitious climate action to mitigate the threat from extreme weather events, which will become more devastating without serious climate action.
As prudent stewards of our nations' finances, it should be axiomatic for conservatives that investing in climate action now makes economic sense, rather than bequeathing a much larger bill to future generations who would suffer the consequences of our inaction. As such, while I was environment adviser to former UK Prime Minister Theresa May, we became the first major economy to legislate for net zero emissions by 2050 - honouring our commitment, as a signatory to the historic Paris Agreement, to pursue efforts to limit global warming to 1.5 degrees.
Under the terms agreed in Paris, both the UK and Australia are required to submit updated emissions reduction plans - known as nationally determined contributions (NDCs) - to the UN this year, and the UK has already committed to delivering an enhanced NDC before it hosts the UN climate change summit in 2021.
Having the courage to set ambitious targets provides clarity for business and creates new opportunities for investment, innovation and job creation. As our Foreign Secretary Dominic Raab told the Petersberg Climate Dialogue last month, successive Conservative governments in the UK have demonstrated that cutting emissions is not at odds with economic growth. Since 1990, the UK has reduced emissions faster than any other G7 nation, while also topping the G7 for per capita growth in national income over the same period.
Emissions have fallen by almost 30 per cent in the last decade alone, thanks in part to our burgeoning renewable energy sector, which now accounts for 37 per cent of British electricity generation. The UK, historically a maritime nation, now has the largest installed offshore wind capacity in the world, generating over 10 per cent of our electricity and employing 11,000 people directly, with an equivalent number of jobs supported in the supply chain. This investment has revitalised many coastal and deindustrialised regions, especially along the east coast of Britain.
Scaling up investment in offshore wind has been achieved through a market mechanism known as "contracts for difference", whereby developers compete at auction for contracts which guarantee a fixed price for the electricity that they produce over a 15-year period - providing the necessary stability to mobilise private capital with low financing costs and to drive competition and innovation. A further expansion of offshore wind capacity, and the establishment of new auctions for less-established technologies such as floating offshore wind, could help power a clean recovery from COVID-19 in the UK.
Indeed, when it comes to fiscal stimulus measures, economic analysis suggests that green investments could provide the greatest returns. This has not gone unnoticed among political and business leaders, many of whom are calling for a clean and resilient recovery. The Australian Industry Group, representing more than 60,000 businesses, has urged the federal government to ensure that Australia's recovery from COVID-19 also aids with the transition to net zero emissions, and believes that doing so would boost growth.
Australia has much to gain from embracing a low-carbon recovery, possessing all the attributes necessary to become a world leader in renewable energy and clean technologies. The Federal government has shown encouraging ambition in its hydrogen strategy which, if focused on hydrogen produced from renewable energy, could reduce energy costs and replace natural gas as a major export - especially if production can be achieved at the target of less than $2 a kilogram.
Additionally, tapping into Australia's vast renewable energy potential could spark a job boom, generating three times as many jobs as the equivalent investment in fossil fuels. And as the cost of solar and wind power continues to decline steeply, Australia can gain a competitive advantage in energy-intensive industries.
It has been encouraging to see that Australia's three Liberal state governments, in South Australia, NSW and Tasmania, are already leading the way in renewable energy. The federal government should establish its own clean energy trajectory, which will unlock vast quantities of private capital for the many large-scale wind and solar projects which are shovel-ready.
In tackling climate change and reinvigorating our economies, we must also recognise our obligation to safeguard nature for future generations. Protecting and restoring carbon-rich natural ecosystems, such as forests, can make a significant contribution to climate mitigation while providing vital habitats for endangered wildlife. The UK has recently established a Nature for Climate Fund, to invest in reforestation and other nature-based solutions to climate change. There is huge potential for natural carbon capture in Australia too, from which species threatened by habitat loss, like the iconic koala, could also benefit.
Both the UK and Australia have experienced first-hand the consequences of a more hostile climate. As governments around the world prepare to unleash further unprecedented sums of money to repair the damage wrought by COVID-19, the choices we make now will reverberate for generations to come. Green investments offer a route to a more sustainable, productive, and resilient future. I hope both our countries seize this opportunity.
- Lord John Randall of Uxbridge is a Conservative Party peer in the British House of Lords and former environment adviser to Theresa May.