greenhouse opportunities for the victorian economy€¦ · greenhouse opportunities for the...
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Greenhouse Opportunities for theVictorian Economy
Griffith Hack PresentationMelbourne
Brett JanissenDirector, ACG
17 June 2009
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Project overview
Phase 1 - Identify prospective climate ‘winners’desktop study, informed by in-house expertiseidentify key market opportunitiesalign with strong & emerging Vic capabilitiesproduce ‘shortlist’ of contenders
Phase 2 - Case study discussions5 activities to be nominated by clientStakeholder workshops/ meetingsground-truth phase 1: investigate outlook, opportunities,impedimentsinform further industry policy development
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Phase1 report: released May 09
Market opportunitiesMitigation = activities stimulated byemission reduction effortsAdaptation = activities stimulated byclimate change (and human response)Support activities = activities needed tofacilitate the above
Vic industry capabilityestablished areas of strength (eg. worldclass performers, exporters)emerging areas of strengthpotential areas of strength & capacitybuilding
Available on DIIRD and ACG websites
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Approach — broad methodology
Identify expanding demand for goods & services (incl.technology) ….. outlook to 2030
stimulated by greenhouse mitigation and adaptation
focus within and beyond Victoria
track adjustment: pressure on status quo (incumbents), imperative tocontain costs, maintain or grow revenues, and service new demands(new activities, technologies)
Map onto Victoria’s capability set
graft onto existing comparative advantage, leadership
asset base (resources, industries, skills, knowledge)
Highlight lower risk & higher pay-off set
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Market outlook - mitigation
UNFCCC ests (2030)Energy supply: US$432b
Industry: US$36b
Buildings: US$51b
Transport: US$88b
Ag & forestry: US$19b + US$1-5b
RD&D: US$35-45b
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Market outlook - adaptation
Who shares our challenges?
Water shortages
Foodproductivity
… and storms,coastal inundation,
health
UNFCCC (2030 ests)Ag, forestry & fishing: US$14b
Water infrastructure: US$11b
Health: US$5b
Coastal protection: US$11b
Infrastructure ‘hardening’: US$8-14b
Greatest need in DCs
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Bonus points: state resilient activities
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A set of commercial heuristics …
Checking the ‘form guide’ Large potential market Likely product superiority, access to scarceresources and few competing suppliers Market proximity and familiarity Flexibility Demand stimulated by carbon prices Demand stimulated by expected climateimpacts High value to embodied emissions ratio
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… a filtering process ….
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Ranking the contenders
Assess potential mkt sizeglobal mktoutlook to 2030
Determine ‘prospectivity’Vic capability & global competitivenessconfidence in future demand
Adjust for timing and risk using NPV metric‘commercially’ oriented discount rates (up to 25% pa!!!)an indicative pay-off range identifiedAssume 5% potential
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Assessment outcomes (risk adjusted)
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Phase 2: Case studies
Confirmedemissions trading hub (concluded)water services and technologies (underway)construction materials, services, technology (underway)2 more to be agreed!
Policy aimsimportant catalyst to thinking/ critical mass/ networkdevelopmentidentify impediments, risk attitudes, outlookongoing communication & engagementcoordinated, informed response
Roll-outwater/ construction workshops 22/23 Juneworkshop draft report 6 weeks lateragree remaining studies shortly!
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Brett JanissenACG, Canberra
[email protected]. 02 6204 6505m. 0418 495 042
(ACG has offices in Melb, Syd, Canb & Perth)
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Need for greenhouse action — projections
Source: IPCC (2007), 4th Assessment Report (Nairobi presentation)
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Carbon prices 2100?
Source: IPCC 2008: AR4 WG3