What you'd spend to prevent climate change — and what you could get with your money

Updated

As the country burns and temperatures rise, climate change is once again at the forefront of our national consciousness.

It's a problem that seems intractable, and has dogged politics for decades.

More than 54,000 Australians took part in the nationally representative Australia Talks National Survey, and the number one thing they said was keeping them up at night was climate change.

When we asked how much more they'd be personally willing to spend to help prevent climate change, the numbers varied.

Some people wouldn't spend anything more (21 per cent) and some were happy to spend thousands (9 per cent) — but most of us sit somewhere in the middle. On average, we're willing to chip in at least $200 each year*.

To halt climate change we'd need to make some major changes to the way the world works, so would an extra couple of hundred dollars a year even make a difference?

It may not sound like much, but even if we take the bare minimum Australians told us they'd be willing to spend, it'd add up to just over $4 billion* a year.

For comparison, the Federal Government spends less than half that on cutting greenhouse emissions and almost 10 times that on defence.

Just one Attack-class submarine is expected to cost at least $6.6 billion.

So what could we get for our money?

With $4 billion, Chief Economist for the Australia Institute, Richard Denniss, said we could fit around a million houses with rooftop solar systems.

At that rate, all 10 million houses in Australia would have a solar system within a decade.

"Let's be clear, if we did that for the next few years, then most people would get near-free electricity for the next 20," Dr Denniss says.

Or, each year we could fit around half a million houses with home battery systems.

French energy company Neoen recently revealed that South Australia's giant Tesla battery cost $90 million. We could buy 44 a year at that price.

As well as helping to manage peak demand and reducing South Australia's reliance on gas generators, Neoen estimates its battery saved consumers around $50 million in its first year of operation.

Alternatively, we could fund the equivalent of a Snowy Hydro 2.0 scheme every couple of years with change to spare.

Snowy Hydro works like a giant battery, storing energy that can be "turned on" when the sun doesn't shine and the wind doesn't blow.

Snowy Hydro 2.0 will store enough energy at a given time to power 3 million homes for a week.

Or, we could allocate $4,000 per house to optimise the energy efficiency of one million houses each year, with things like insulation, smart meters and energy-saving appliances.

Starting with the lowest-income households, this would significantly reduce power bills as well as greenhouse gas emissions.

"$4 billion a year would go a very long way, a very long way to reducing emissions very rapidly," Dr Denniss says.

How to double your dollar

But if $4 billion doesn't sound like enough, Vice Chair of the Intergovernmental Panel on Climate Change (IPCC), Professor Mark Howden, says he would work to double it.

"I would set up an autonomous organisation to run this — independent of government, preferably with charity status — and then use this as a vehicle to engage with philanthropists, et cetera, to multiply it up. Let's say dollar for dollar.

"So the pot would be $8 billion per annum."

He'd put $1 billion toward research and development of things like battery technology, and on energy reduction in transport, agriculture, and other sectors, and on climate-change adaptation.

He'd use that $1 billion to leverage funding from universities, research agencies and organisations like the CSIRO, through co-investment.

With those organisations contributing their own funding and resources, the research pot could be much larger than the initial $1 billion.

"Usually, it is possible to at least triple the overall budget this way by astute co-investment."

He'd put $4 billion into a "green bank", similar to our existing Clean Energy Finance Corporation (CEFC).

Last financial year, the CEFC put more than $1.3 billion towards renewable and low-emissions projects.

Each dollar the CEFC committed was matched by more than $3 from the private sector — bringing $6.3 billion to projects like solar farms, or boosting the capacity of SA's giant Tesla battery.

The green bank would invest in projects that bring a financial return on investment — for example, the CEFC made a $320 million return last year, which can now be invested in more projects.

A small portion of the kitty would also go to funding community solutions to climate change — to empower Australians to put their ideas into action.

And he'd set aside $1 million for an award program to celebrate the achievements of Australians on climate action and encourage more ingenuity.

With the remaining $3 billion, he'd fund on-ground change, lobbying, and leveraging business and government so that climate is central to all policy decisions, rather than a sideline issue.

Multiplying our money

$8 billion still not enough?

Anna Skarbek, former banker and CEO of Climate Works Australia, says $4 billion could be leveraged to yield so much more.

For example: right now we could buy 80,000 electric vehicles outright for $4 billion…

But we know that people are going to be buying cars anyway, so instead we can subsidise purchases that are already going to happen.

Let's say we subsidise electric cars by $10,000, making them cheaper than the petrol alternative. It would then make economic sense for businesses and individuals to buy the cheaper electric car.

In that way, $4 billion would facilitate the purchase of $20 billion worth of electric vehicles — keeping 400,000 petrol-powered cars off the road.

"$4 billion in fact could stretch a very long way, if it was used in a blended finance way to unlock much larger shares of private capital."

An injection of funding from our kitty could remove risk for investors in new clean technologies, which is often all it takes to kickstart a profitable industry.

One industry we could jump-start is clean hydrogen, which has been touted as a key future export for Australia.

It could replace fossil fuels in steel and aluminium production and potentially diesel engines in international shipping.

Having local zero-emissions industries like steel and aluminium would also make those products attractive to international markets looking to reduce their carbon footprints.

"$4 billion is a really, really valuable contribution," says Ms Skarbek.

Looking to the regions

When deciding how to spend our kitty, it's important to consider climate inequality, says Kate Mackenzie from the Centre for Policy Development.

Given $4 billion a year to play with, she'd invest $1 billion on regions and communities with fossil fuel-dependent economies.

Starting now would give those communities time to transition their economies to clean-energy alternatives, such as hydrogen, instead of having their hands forced when the world shifts away from fossil fuels.

Ms Mackenzie would also dedicate $1 billion to adaptation measures for the most vulnerable communities and systems, with a portion earmarked for overhauling planning laws and building codes to account for changing climate.

'We can make any decision we want'

While there might not be a climate fund that we can each chip in $200 to each year, the experts say there's something close.

Most of us put a portion of our annual income into superannuation, and just like with our kitty, that adds up quickly.

The amount of money tied up in super is big — $2.9 trillion big. The average Australian puts around $9,000 into their super each year — 45 times what we said we'd chuck into our climate kitty.

"Anyone interested in directing more resources to renewable energy can switch their super fund to 100 per cent fossil-fuel-free funds," Dr Denniss says.

Already, the CEFC's industry partner, Ironstone Capital, says there's been a huge increase in demand for renewable energy investment opportunities from superannuation and managed wealth funds.

Rather than seeing the transition to clean energy as a financial burden for Australia, Ms Skarbek says it's about seeing the opportunities we can seize.

"It's an investment in the longevity of the employers in those sectors. It's about industrial development and it's a national prosperity issue."

Tackling climate change starts with dispelling the myth that it's too expensive, and that we can't make a difference, Dr Denniss says.

"What we've told ourselves is that it's really expensive and we can't do it. It's a democracy, we can make any decision we want, but to suggest Australia can't afford these things is simply absurd."

Australians ranked climate change as the number one problem for them personally in the Australia Talks National Survey. To see how your views compare, use our interactive tool — available in English, simplified Chinese, Arabic and Vietnamese.

Then, join Annabel Crabb as she takes you through some of the most surprising and exciting insights with Waleed Aly on the Australia Talks TV special on iView.

*The average amount Australians said they would personally be willing to spend each year was calculated using the proportions who chose each of 6 brackets: nothing at all (21 per cent); less than $100 (18 per cent); $100-500 (28 per cent); $500-1000 (10 per cent); $1000-2000 (5 per cent) and more than $2000 (4 per cent). (A further 13 per cent said they "didn't know"). This calculation was done using the lower end of each bracket, to provide a conservative estimate.

The total amount Australians were willing to spend to prevent climate change was calculated using the number of Australian adults at the 2016 census (19.4 million), multiplied by the proportion who chose each bracket, multiplied by the lower end of the bracket.

This data came from the Australia Talks National Survey, conducted by the ABC and Vox Pop Labs, which was fielded to 54,000 Australians in July 2019. The survey data was weighted using sex, age, education level, language of use, State, geographical region and voting choice in the 2019 Federal election, to offer a representative sample of the Australian population.

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Credits:

Reporter: Nick Kilvert

Producers: Tim Leslie and Annika Blau

Developers: Colin Gourlay and Simon Elvery

Editors: Cristen Tilley and Jonathan Webb

Topics: climate-change, energy, alternative-energy, australia

First posted