A dramatic scaling up of renewables in the global energy mix by 2030 would increase Australia’s GDP by 1.7 per cent, improve social welfare and mitigate water shortages, according to new analysis by the International Renewable Energy Agency (IRENA).
Renewable Energy Benefits: Measuring the Economics, released 16 January at IRENA’s sixth assembly, finds that increasing renewable energy generation to 36 per cent worldwide would have a range of economic and social benefits in Australia and around the world. Globally, gross domestic product (GDP) would increase by up to 1.1 per cent, or roughly AU$1.9 trillion.
The new report provides the first global estimate of the macroeconomic impacts of renewable energy deployment. Specifically, it outlines the benefits that would be achieved under the scenario of doubling the global share of renewable energy by 2030 from 2010 levels.
Notably for Australia, the study addresses the question of how coal exporting nations would be affected by a dramatic increase in renewable investment, and concludes that Australia would experience positive impacts amounting to around 1.7 per cent of GDP compared to business as usual.
“Several countries are notable for having a large positive impact on GDP due to higher investment [in renewable energy], including Australia,” the report reads.
IRENA also found that Australia was among the countries that would enjoy the highest welfare improvements from greater investment in renewables, primarily due to the reduced health impact of air pollution.
The report says Australia’s water management issues would also be alleviated, because increasing renewables penetration significantly reduces water use in the power sector.
“On the back of a substantial scale-up of renewable energy deployment, especially solar PV and wind, water withdrawals in 2030 could decline by more than a quarter for Australia,” the report reads.
Adnan Z. Amin, IRENA Director-General, said: “The recent Paris Agreement sent a strong signal for countries to move from negotiation to action and rapidly decarbonise the energy sector. This analysis provides compelling evidence that achieving the needed energy transition would not only mitigate climate change, but also stimulate the economy, improve human welfare and boost employment worldwide.”
According to the report, the impact of renewable energy deployment on human welfare is estimated to be three to four times larger than its impact on GDP, with global welfare increasing by as much as 3.7 per cent.
Employment in the renewable energy sector would also increase from 9.2 million global jobs today, to more than 24 million by 2030.
“Mitigating climate change through the deployment of renewable energy and achieving other socio-economic targets is no longer an either or equation,” said Mr Amin. “Thanks to the growing business case for renewable energy, an investment in one is an investment in both. That is the definition of a win-win scenario.”
The full report can be found here.