Event: Jennifer Westacott interview with Chris Kenny, The Kenny Report
Speakers: Chris Kenny, host; Jennifer Westacott, chief executive Business Council of Australia
Date:4 November 2021
Topics: 2021 John Monash Oration, achieving net zero emissions, nuclear energy
Chris Kenny, host: Let me bring in Jennifer Westacott now, who's the CEO of the Business Council of Australia. Thanks for joining us, Jennifer. We haven't spoken for a long while.
Jennifer Westacott, Business Council chief executive: No.
Chris: I'm fascinated by your organisation's change on climate policy. I know you've been explaining it a bit lately, but back in 2018, you were saying a 45% reduction in emissions by 2030 would be economy wrecking, yet now you're saying that's what Australia should achieve. What has changed in that time other than the politics?
Jennifer: Look, a lot's changed. At the time we made that comment, our energy prices were going through the roof. We had a lot of problems with reliability, the major companies were telling us they couldn't meet that target. Now, of course, they've made huge strides in renewables. Our major trading partners, like the US, had pulled out of Paris. Now they're back in with much bigger commitments and we've always said, as the Business Council, that you've got to calibrate what you're doing with what our trading partners and our competitors are doing. The States hadn't committed, now they have. I think the most important thing, Chris, is that the big financial markets have moved. A lot of the financial institutions have moved where the money is going. They've got these sustainability bonds, they're putting sustainability requirements on lending. So a tremendous amount has changed since 2018 but we've always had a view that we need to act on climate change. Our view was to make sure that we act in a way that recognises the nature of Australia's economy and recognises it in a way that we create jobs. We spent two years doing the work on it too, Chris. I mean, we didn't just pluck it out of the air. We sat down with 70 companies, whether they were generators, miners, emitters, retailers, and we said, "What do we think is possible?" And then, most importantly, we've put not just a target there, but we've actually put the how, the how that would actually drive that technological change.
Chris: The thing is though, of course, energy security and the unreliability of renewables remains the case. Australia's looking at a really difficult period if we increase renewables in the coming future. Not much has changed in the international environment at all. I agree with you that in terms of capital markets and the pressure you're getting there, but America coming back into Paris, while America was out under Trump, America was actually reducing its emissions by switching from a lot of coal to gas. So it's just a matter of America's rhetoric has changed. China, Russia, India, still out of net zero by 2050. So we've kind of flipped sides on this.
Jennifer: Well, let me just unpack that a little bit. I think the key about the US is that they are still our biggest foreign direct investor. And so when they committed to a much higher target, we need to be cognizant of that because we want to be attractive to their investment. If I think about India, though, I think that is a sort of different case, because I think Prime Minister Modi's right to say, "Well, we can't do this by 2050 because we're trying to get hundreds of millions of people out of abject poverty." It's in our interests to make sure that they do this in the right time, because they'll be wanting to buy our clean, renewable products. They'll be wanting to buy our steel. They will be wanting to buy our agriculture. Now, we want that middle class to rise.
Chris: Yeah. Can I just jump in there, Jennifer? Because I agree with you wholeheartedly. I think India is a different case. That's why I didn't mention at the top of the program. China and Russia, though, these are the number one emitter and the number four emitter. These are both countries with massive armies, militaristic countries, both with space programs and yet they're not signing up.
Jennifer: Well, I mean, China's committed to net zero by 2060. But look, I agree with you, but I think that's not the reason that we should act. The reason we should act is because it's in our interest to act. There's two reasons for that, Chris. We’ve finally, finally got the early mover advantage on this. We've got all these rare earth, like lithium, these minerals, and some analysis we've seen by the Grattan Institute says that they're going to be worth two and a half times the revenue of coal. We're sitting on the stockpile, as I said in my speech yesterday, of the resources that are going to power up the world. We can be doing hydrogen. We can decarbonise or make more efficient our steel and our processing, and that's going to make it more competitive. So, the reason that Scott Morrison signed up to net zero was not because he was going to a meeting, it’s because he absolutely knows that it's in our interests. So that's on the positive side and we've got to capture those opportunities. And then on the risk side, if we don't do something, then we run the risk that our trading partners start looking for other products, our exports become less competitive and, of course, those financial markets don't invest in Australia. So I think the government has done the right thing doing this. I think it was right to go to Glasgow. The thing that always bugs me about these conferences is getting lectured by people, getting lectured about our achievements.
Chris: Tell me about it.
Jennifer: So I think the prime minister's right. We have to do this in a way that works for our country.
Chris: What about being lectured by Malcolm Turnbull, though? What about a former prime minister of Australia in Glasgow bagging his own country?
Jennifer: Well, I'll leave that to the political commentators. The prime minister's right, we have to do this in a way that works for our community, for our country, for our economy. We have to do this in a way that creates jobs. We believe we've put forward that work, because we've been doing this for two years and we've looked at the job stuff. We've looked at it bottom up, top down. And I think what happens now is what matters as opposed to obviously what's been happening over this conference. But I'm really proud of the fact the prime minister went, he stood up for Australia's interest, and he knows that us doing this is in our national interest.
Chris: Just one final question, then, about the future. In your speech yesterday, you tentatively looked at what we could do more when it came to our uranium resources. Of course, that's one of the great resource advantages we have. Of course, when you talk about hydrogen, having plentiful, reliable nuclear powered electricity would help with generating that liquid hydrogen as well. Do you believe it's time for this country to at least have a good national look at the potential for nuclear?
Chris: Domestic energy?
Jennifer: I think that the whole nuclear industry, it's time for us to do the work and do the thinking. The thing that I always get grumpy about is that we have this ideological kind of thing. We rule it out because, I don't know, we just don't like it. So there's two parts of this, just very quickly. The AUKUS deal, and that's the point I was making yesterday in my speech, is a huge opportunity for Australia. We need to get the regulation right, the infrastructure, the skills. We need to look at all the opportunities that are going to come from that, electronics, signalling, quantum, et cetera. Then while we are doing that, we should look at, well, what would it take to have a nuclear power industry? And let's do the work now, Chris. Let's do the work now on the regulation, the skills, the capability, the infrastructure, so that as that technology improves, and you've been making this point absolutely correctly that that technology is changing, that we're actually ready to go and that we're not starting from scratch and we're not having to wait 10 years to get that up and running. And that's what I think we should do. When you and I both worked in government, we used to do those things, green papers and white papers, where we'd look at an issue properly. I reckon we need to do a green paper and a white paper on a nuclear industry in Australia.
Chris: Makes a lot of sense, Jennifer. Thanks for joining us.
Jennifer: You're very welcome. Thank you.
Chris: Jennifer Westacott there, who's the CEO of the Business Council of Australia. Makes a lot of sense. Australia's got to look at what we could do with nuclear energy.