ClimateWorks research shows that the potential exists to nearly double the energy productivity of Australia's economy by 2030 by investing in the modernisation of our energy system and taking advantage of recent technological developments. This would mean almost double the economic output (in terms of GDP) for every unit of energy consumed by 2030.
Improving energy productivity is an increasingly important approach to increase the overall productivity of an economy. In Australia, energy costs have grown by 67 per cent over the past decade, from around AUD$72 billion in 2001 to 2002. Energy costs are now equivalent to 8.2 per cent of total GDP, and approaching total labour costs for whole of Queensland (AUD$137 billion). Given the increase in energy costs, improving energy productivity can make a material contribution to increases in overall national productivity.
Improving energy productivity could also address issues related to energy supply chains, helping to reduce the risks and pollution associated with extraction of coal and gas, and the potential for supply interruptions for oil-based fuels. Finally, improving energy productivity could contribute to achieving emissions reductions, which will be particularly important as countries move towards post-2020 emissions reduction targets at the international climate change meeting in Paris November 2015.
While Australia has made some progress in energy productivity, we currently lag behind other G20 countries, both developed and developing. If nothing is done to accelerate improvement, this lag will increase. ClimateWorks' research shows that the potential exists to bridge this gap and ensure that Australia keeps pace with improvements being targeted in other countries.