The Mirage of a Clean Energy Jobs Boon in Australia

October 21, 2021 Updated: October 21, 2021

Commentary

At two minutes to midnight, Australians are finally being offered something that at least resembles a debate about the social and economic consequences of a net-zero emissions target.

The Coalition government and advocates of a net-zero emissions by 2050 target know that the easiest way to win a debate is to simply not have one.

The government’s failure for refusing to release modelling of the employment impact of net-zero, despite having chastised Labor for the same sin in 2019, is an exemplar.

Since the Institute of Public Affairs (IPA) released modelling in February and then October this year, indicating that net-zero could put up to 653,600 jobs at risk, other organisations have started to follow suit.

However, recent modelling released by the advocates of net-zero shows the opposite of what it is that they intend.

Take, for example, Accenture’s Clean Energy Exports Jobs report published earlier this month and commissioned by the Australian Conservation Foundation, Australian Council of Trade Unions, Business Council of Australia, and WWF-Australia.

The report claims that under a net-zero emissions by 2050 scenario, Australia could have an additional 395,000 jobs and $89 billion (US$66.9 billion) of economic activity in the year 2040 if we capitalise on the opportunity to expand our clean energy exports.

Based on these figures, the report claims that clean energy exports are superior to fossil fuel exports because they “could create 19 percent greater revenue, 11 percent greater value add, and over 83,000 more direct jobs in 2040 than the current fossil fuel industry generated in 2020.”

Epoch Times Photo
Workers leave Hazelwood Power Station after their final shift in Hazelwood, Australia on March 31, 2017. Around 750 workers have been left jobless after the plant was closed. (Scott Barbour/Getty Images)

One thing the authors don’t bother to explain is, if it is the case that clean energy exports are so superior to fossil fuel exports, why the government must establish new subsidies or legal mandates to get new industries off the ground.

Regardless, it’s odd that the report compares export revenues, gross value added, and jobs in the year 2040 to the year 2020.

Comparing current dollars with future dollars is misleading. But it is an issue easily overcome through applying net present value (NPV), which “discounts” an amount of future money to make it directly comparable to money today. It doesn’t appear that Accenture has done this in their report.

If we assume a very small discount factor to account for an average annual inflation rate of 2 percent, it completely reverses the report’s findings. Thus, clean energy exports of $148 billion (US$111.2 billion) in 2040 is equal to only $102 billion (US$76.7 billion) today—18 percent below current fossil fuel export revenue claimed in the report, not 19 percent above it.

The gross value added (GVA) in 2040 would equal to $61 billion (US$45.8 billion) today, not $89 billion, making it 24 percent below the current GVA of fossil fuels rather than 11 percent above.

Further, the claimed $89 billion of GVA for clean energy is both direct and indirect. In comparison, the $80.5 billion GVA claimed for fossil fuels is only measured as direct value added, or simply revenue. Thus, one can only speculate as to why the indirect GVA of fossil fuel exports was not calculated or if it was why it was not included as well.

Like economic activity, comparing the current and future jobs is not accurate because the workforce grows over time. Between 1986 and 2019, the Australian workforce grew by about 2 percent per year. We can apply a similar methodology of discounting the number of future jobs to put them into context today using this growth rate; the result is 271,000 jobs, rather than the claimed 395,000.

But to go even further, the majority of the potential job creation in the report is indirect. Only 176,000 are direct job creations, equivalent to about 121,000 today.

So, there are about 121,000 direct jobs up for grabs from net-zero emissions, according to the Accenture report. This is barely one-sixth of the jobs which would be put at risk from net-zero emissions, as estimated by the IPA’s modelling.

This is why some, such as National Party Senator Bridget McKenzie, have described clean, green jobs as a “mirage.”

Epoch Times Photo
Photovoltaic panels and wind turbines. (Mike Mareen / Adobe Stock)

But this all gets to a much deeper point. The Australian way of life is based on mainstream Australians having access to well-paid and stable work, which underpins a decent middle-class life.

But policies such as net-zero are replacing full-time and high-paid jobs with part-time and low-paid jobs.

For example, mining is the highest paid sector in Australia, where 95 percent of jobs are full-time. Manufacturing pays above average wages, and 82 percent of jobs are full-time. However, across the entire workforce, less than 70 percent of jobs are full-time.

The 121,000 clean energy export jobs are likely to be lower paying than their counterparts in the fossil fuel and manufacturing industries.

The Accenture report gives away the ruse when it says that “clean exports include industries that employ more people per dollar of revenue than the current fossil fuel industry”—the translation for laypersons: clean export industries create less value than the fossil fuel industry per worker, and as such are likely to pay lower wages to their workers.

It also means the clean energy industry won’t pay as much tax to fund schools, hospitals, and roads nor contribute to the communities they operate in on the scale that mining and manufacturing do.

Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.

Cian Hussey
Contributor
Cian Hussey is a Fellow at The Centre for the Australian Way of Life at the Institute of Public Affairs, and the Managing Editor of Essays for Australia.