The future of manufacturing in Australia extends well beyond batteries for electric cars, according to American economist Adam Hersh.
Visiting from the Economic Policy Institute in Washington DC, he is the keynote speaker at a national manufacturing summit examining how clean energy can spark an industrial turnaround in Australia.
“What brings me here is the climate crisis and the imperative for renewable energy,” Dr. Hersh told AAP.
“It’s not all about the U.S sucking up the resources in manufacturing from the rest of the world.”
Dr. Hersh said the Biden administration was trying to create a “like-minded club” to supply what was needed to transition from fossil fuels.
In Australia alone, nine-fold increases in wind and solar electricity generation capacity are required by 2050 to meet net-zero demands.
Dr. Hersh said there was also a push to change the direction of the “moral compass” of the global economy so the goods being produced and traded were being made under conditions of dignity and respect for workers and the environment.
Australia has joined the push to bring manufacturing back from low-wage countries with dubious environmental safeguards but faces stiff competition from the US and Europe for capital, workers and ideas.
“The scale of these programs in the US is massive, in many cases unprecedented,” Dr. Hersh said.
The largest investment in passenger rail, public transit and bridges, since the US built the interstate highway system in the 1950s, is being rolled out.
“These are huge ... but if we don’t take these steps now, we’re going to be facing much more severe costs in the future,” he said.
“From widespread crop failures to property damage from increasingly severe storms, coastal and waterway flooding, from climate migration causing social and political destabilisation.”
Sustainable manufacturing, a battery supply chain, and how to train the thousands of workers needed to build the new economy are on the agenda on Thursday at the summit in Canberra.
“People are going to be able to find new livelihoods,” Dr. Hersh said.
A research report by the independent Centre for Work to be released at the summit rejects the claim that the federal government cannot afford to match the scale of the US subsidies and tax credits.
Adjusted for the scale of the Australian economy, up to $138 billion in fiscal support for renewable energy-related manufacturing is needed over the next decade, co-authors Jim Stanford and Charlie Joyce say.
Australia needs to shake off decades of acceptance of being the world’s quarry and use a rich endowment of wind and sunshine to process metals and minerals into green steel, new fuels and fertilisers, they argue.
It also has world-leading reserves of critical minerals and rare earths that are in demand for clean energy equipment, mobile phones, laptops, medical equipment and defence technology.
But at this point of the race for sustainable manufacturing, the report found Australia’s footprint is mostly limited to the very bottom of the value chain; extraction and shipping rocks and gas.
By Marion Rae
