Betting big on future climates

As a nation, Australia has become too comfortable. Three decades of economic growth has blunted a once pioneering entrepreneurial spirit - that desire and drive to think and act bigger, to take on challenges, and to change the world. To turn this around we must start asking ourselves “what are we showing the world today?”

Click image to zoom Tap image to zoom

Pic: Hydrogen molecules

The Commonwealth Scientific and Industrial Research Organisation (CSIRO) and AlphaBeta have estimated the economic potential of Australia’s digital opportunity to be $A315 billion. If you add in health, energy or new materials, it’s in the trillions. We must begin to act now if we have any chance of capturing these opportunities. 

"We can choose to disrupt ourselves - which is painful - or we can wait for someone else to do it to us - which is fatal.”

Australia needs to look at the opportunities presented by the challenges and disruption being faced to create a future where the nation has prosperous and globally competitive industries, inclusive and enabling communities and sustainable natural resources.

Painful or fatal?

At this moment in time, we can choose to disrupt ourselves - which is painful - or we can wait for someone else to do it to us - which is fatal. If we wait for others to solve the challenges for us, we can kiss goodbye our high standard of living, high wages and future prosperity - we will live in a future dictated by others. And that’s just not the Aussie way.

You can see countries moving forward when they have a clear direction and unified action behind it.

China has a vision to move away from “made in China” to “designed in China”. Putin has said Russia will be the world’s biggest supplier of eco-friendly food. Sweden has passed legislation to reach net zero emissions by 2045.

They all have clear visions, driven by their ability to differentiate themselves in a highly competitive world, and to change the future in a way that most benefits them.

Making science real

In Australia, we are sitting around arguing with ourselves about whether in fact there is a problem. Or if there is, then who can we blame for it? And of course - if we can solve it, who will take the credit!?

At CSIRO, we realised - more than ever - we needed a real market vision to focus our science and innovation on solving real problems that matter to real people - in essence we had to make our science real.

We needed to be out in the field with customers. We needed to be on the ground looking at the issues and coming up with real world solutions. Not just ideas but products or at least prototypes that people could actually use.

We made a bold bet on hydrogen - very few people were talking about this when we created a National Hydrogen Roadmap creating a blueprint for developing a hydrogen industry for Australia. It offers Australia a way to transition to renewable energy profitably by creating an export market.

Leading the way

Australia has a golden opportunity to lead the way in hydrogen. We have an abundance of natural resources which can be turned into a uniquely Australian low-emissions energy product and shipped around the world - in some cases exporting Aussie sunshine when we use solar energy in the conversion process.

Clean hydrogen energy offers a way to zero emissions without losing our valuable export revenues. The energy debate has been driven so much by ideology, rather than focusing on the real challenge, the derailing of our economy. We need to ask how science can solve the seemingly impossible (again) to get us on the right path for growth.

A recent McKinsey report notes at scale hydrogen could meet 18 per cent of the world’s energy demand, create 30 million jobs, generate $A2.5 trillion in sales and abate 6 gigatons (Gt) of carbon dioxide annually.

At CSIRO, we saw a growing market outside Australia. Places like Japan and Korea who don’t have the land mass to build their own sustainable energy industries but have sustainable energy policies and targets. Japan even committed to using 20,000 carbon free buses for the 2020 Olympics.

Over the past four years we’ve focused on building the value chain to export hydrogen, working backwards from the market - from Japan and Korea, to Toyota and Hyundai, whose cars we refueled last year for the first time using the purest hydrogen. This was all enabled by a unique CSIRO invention, a membrane material that only allows hydrogen to pass through - so liquid ammonia goes in one side and the purest of pure hydrogen out the other, which is perfect to drive fuel cells.

Making a bet

The big breakthrough came when the Fortescue Metals Group stepped up to produce hydrogen domestically. As brilliant as the science and engineering are, they don’t amount to anything until a big Australian company is willing to make a bet.

When it comes to hydrogen, we are not just creating a new industry and jobs but also contributing to a different energy future that is secure, affordable and sustainable. Helping wean us off the $A180 billion of export revenues from coal, liquefied natural gas and iron ore by replacing them. Not with rhetoric but with resources - new green resources that grow our economy.

We are at the forefront of this energy revolution. With the right investment, we can accelerate our capability to capture these markets ahead of the curve.

CSIRO also created Australia’s first venture capital fund investing in science with the CSIRO Innovation Fund, managed by Main Sequence Ventures.

Between September 2017 and June 2019, the Fund has invested almost $A60 million in 19 companies representing all of the Fund’s priority areas: health; food and agriculture; software as a service; space; cybersecurity; energy and resources.

The Fund’s current portfolio includes satellite communication company Myriota, telehealth start-up Coviu and Baraja who are developing technology for driverless cars.

It was CSIRO’s office in the US that facilitated the relationship between Myriota and Main Sequence Ventures, which resulted in a $A15 million Series A funding round along with Boeing Horizon Ventures.

This is providing solutions for companies with sensing requirements in remote locations away from urban internet connections.

Stop waiting

With the world rapidly changing around us and the competitive landscape shifting very swiftly, Australia must look to invest in the industries of tomorrow - to be willing to invest in new ideas.

We must be brave enough to look at what’s coming and take action. To be the first one to change instead of looking around and waiting to see who makes the first move and then follow.

When we invest our science into them it can be game changing like hydrogen. Science can solve seemingly impossible problems and enables industry and the environment to be partners rather than competitors.

Australia must look now to invest in the industries of tomorrow to secure a future for us all. We have the science and the markets are waiting. It has never been more important - for our quality of life, for the economic health of our nation and for our contribution and position in a globally competitive world.

Dr Larry Marshall is Chief Executive at The Commonwealth Scientific and Industrial Research Organisation (CSIRO)

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

editor's picks

03 Oct 2019

Renewing investment in renewables

Cherelle Murphy | Senior Economist, ANZ

In a climate of climate action demands, renewable energy continues to make a mark on investment and prices.

24 Sep 2019

Climate change: shifting the economy

Richard Yetsenga | Chief Economist, ANZ

The impact of climate change on global economies is reaching boiling point.