Australia once rode on the back of a sheep, then on a bulk carrier of coal and iron ore. But Australia’s future must ride on the backs of our innovators.

The past 200 years of technological breakthroughs have changed our lives, and these innovations will be central to viable emissions reduction opportunities. From removing and storing atmospheric CO2 to creating new crops and animals to deal with climate change.

However, sustaining Australia’s prosperity needs other types of innovation too.

New ways of doing, for a more complex environment: With significant climate change already loaded into the atmosphere we can’t solely rely on technological innovation to get us out of danger. In the US, it’s estimated new technological development has mitigated just 20% of economic damage from climate change since 1960. With the potential to mitigate only 13% by 2050¹. New market innovations like multi-peril crop insurance, water banking mechanisms, and soil carbon markets can build farm resilience by increasing soil water storage and deepening social innovations – like peer-to-peer farmer learning in a complex, changing operating environment.

Behaviour change makes transitions easier and cheaper: As we shift away from thermal energy sources, we need more generation and more storage capacity².  Utilising electric cars and houses with rooftop solar systems could reduce the investment required in national generation and grid-scale batteries.  Integrating these into the system requires technological innovation as well as changes in electricity governance and new market mechanisms. Other changes, like increasing energy demand flexibility, boosting energy efficiency, and adopting circular economy initiatives, will also ease Australia’s transition to net zero.

Shifting market opportunities: Global actions in addressing climate change will reconfigure supply chains.  By 2050 close to 50% of the world’s energy will be used in the Indo-Pacific.  With Australia’s potential for abundant renewables and bioresources we can change where we operate along supply chains. Pushing further down the iron and steel value chain or building a biofuels industry and reducing reliance on liquid fuel imports.

Bringing people along: While some technologies are simple drop-in replacements, others transform our systems and reshape the economy. Ignoring these changes can lead to social resistance and delay the adoption of new approaches, as seen with some renewable energy infrastructure. For example, in Cobargo³ after the Black Summer Bushfires, community-led innovation demonstrated the power of social innovation to create better solutions.

Australia’s future demands a mix of technological, market, and social innovations to navigate climate challenges and seize emerging opportunities.

– Dr Michael Battaglia, Towards Net Zero Mission Lead

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1. Jacob Moscona, Karthik A Sastry, Does Directed Innovation Mitigate Climate Damage? Evidence from U.S. Agriculture, The Quarterly Journal of Economics, Volume 138, Issue 2, May 2023, Pages 637-701 https://doi.org/10.1093/qje/qjac039
2. Climateworks Centre and Climate-KIC Australia 2023, ‘Pathways to industrial decarbonisation: Positioning Australian industry to prosper in a net zero global economy’, Australian Industry Energy Transitions Initiative, Phase 3, Climateworks Centre.
3. O’Connell, Deborah; Meharg, Seona; Flett, Dianne; Armstrong, Zena; Muller, Frank; Mitchell, John; Mortimer, Genevieve; Gorddard, Russell; Marinopoulos, John; Wise, Russ; Heinmiller, Peter; Pleiter, Dylan; Mesic, Nic. What it takes to create an enabling environment for resilience investment: A town like Cobargo . CSIRO, Australia. : CSIRO; 2023. csiro:EP2023-4521. https://doi.org/10.25919/gg9x-rr11