Aussie Renewable Turning Point or Imminent Economic Contraction?

Essay by Eric Worrall

Aussie greens are celebrating a reduction in Aussie emissions as a green energy turning point. But other numbers tell a different story.

Australia’s greenhouse gas emissions drop as renewable energy, batteries surge

By climate reporter Nathan Morris
Friday 5 June

Australia’s greenhouse gas emissions have dropped, showing signs of a turning point in the country’s most polluting sectors.

Emissions are at their lowest point since the COVID pandemic shut down the economy, dropping 2.1 per cent over the year to December 2025, according to the latest national greenhouse gas inventory update.

The significant drop is largely driven by clean energy replacing fossil fuels in electricity generation, but transport emissions also continued to fall, year-on-year, for the second quarter in a row since the pandemic.

…

Electricity on downward trend

Electricity remains the largest source of emissions, accounting for 31.8 per cent. But emissions from the sector peaked in 2009 and have continued to fall since, down 3.8 per cent to December 2025 and 25.8 per cent since 2005.

…

Despite the Clean Energy Council reporting that investment in large-scale renewable projects had fallen 46 per cent, the sector continues to displace coal and gas.

“The largest increase was in wind generation, which increased by a record 22.6 per cent over the year to December,” the report said,

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Read more: https://www.abc.net.au/news/2026-06-05/australias-emissions-drop-as-renewable-energy-batteries-surge/106751294

So what are those “other numbers” telling us?

For starters, agriculture is on track for a significant contraction this year, thanks to skyrocketing fossil fuel prices and fertiliser prices. A problem exacerbated by political hostility towards Australian domestic energy production, forcing all but a handful of refineries to close.

Productivity is collapsing, leading to a silent contraction in living standards.

Australia is showing how a rich country gets poorer

Idling productivity over the past decade is estimated to have cost each Australian about $11,000 per year in lost income.

Attila Brungs UNSW vice chancellor
May 7, 2026 – 5.00am

For the first time in Australian history, younger generations are forecast to have a lower standard of living than their parents. People across the country know about the cost-of-living crisis and the housing affordability crisis.

Less appreciated is that both are rooted in Australia’s stagnating productivity. But a sense of déjà vu pervades discussions about Australia’s productivity crisis. Paralysed by relentless polling cycles, political leaders have been unable to undertake serious productivity reform for more than two decades.

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Read more: https://www.afr.com/policy/economy/australia-is-showing-how-a-rich-country-gets-poorer-20260506-p5zua1

Economic growth is plunging.

Australia’s economic growth slowed sharply in the March quarter, ABS figures reveal

4 June 2026 | By Chris Johnson

The Federal Government is defending national accounts figures showing a decline in gross domestic product growth in the quarter to March, with productivity having its sharpest fall in two years.

The Australian Bureau of Statistics released the latest figures on Wednesday (3 June), showing that GDP rose 0.3 per cent in the March quarter this year, and 2.5 per cent compared to a year ago.

The 0.3 per cent growth in the March quarter is the weakest growth in the past year and below market expectations, and productivity is down 0.6 per cent over the quarter. GDP per capita declined 0.1 per cent over the quarter.

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“Rising interest rates and significantly higher fuel costs in March likely created an environment for more cautious consumer behaviour,” she said.

“This resulted in reduced spending across a range of household expenditure categories.”

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Read more: https://region.com.au/australias-economic-growth-slowed-sharply-in-the-march-quarter-abs-figures-reveal/971526/

My point is, emissions are not falling because green energy is a success. Emissions are falling because the Australian economy is slowly grinding to a halt, with millions of Australians tightening their belts, reducing vehicle use, rationing heating, skipping meals, not purchasing medicine, and doing all the other things people do when they are worried about money. Even investment in renewables is falling sharply.

Since renewables in Australia have first call on grid capacity, any reduction in demand, such as happened in 2024-2025, forces other energy suppliers to cut back, causing a rise in renewable energy mix – except when the renewables are not working, of course.

The following was published late November last year by the Australian Government.

Decrease in domestic energy use driven by households

Media Release
Released 20/11/2025

Source
Energy Account, Australia, 2023-24 financial year

Domestic energy use

Domestic energy use fell by 0.7 per cent to 5,691 petajoules (PJ) in the 2023-24 financial year, according to data released today by the Australian Bureau of Statistics. 

Luisa Ryan, ABS head of environment statistics, said, ‘Household use of energy fell by 3.4 per cent to 980 PJ in the 2023-24 financial year, driven by a 15.1 per cent fall in natural gas usage. Electricity usage remained flat, with most other energy products recording small decreases.’ 

Energy net use by industry fell by 0.1 per cent to 4,711 PJ. This reflected lower energy use in the manufacturing industry, which fell 6.1 per cent. This fall was offset by rises in the transport industry (up 10.6 per cent) and the commercial and services sector (up 3.2 per cent). 

‘Renewable energy production in Australia continued to grow in the 2023-24 financial year, with solar energy production rising by 15.9 per cent and now accounting for 51 per cent of renewable energy,’ Ms Ryan said.

There were small falls in the production of other renewables, including wind energy (down 1.8 per cent) and hydro energy (down 10 per cent).

Energy exports

Energy exports rose by 3.1 per cent to 17,927 PJ in 2023-24, driven by black coal exports.

Black coal remained Australia’s largest energy export, growing by 4.8 per cent to 9,906 PJ. 

Liquefied natural gas (LNG) remained our second biggest energy export despite falling for the second year after a decade of strong growth, down 0.8 per cent to 4,481 PJ.

Further information on national estimates of energy assets, physical supply and use of energy products, and the monetary use of energy products by industry can be found in Energy Account, Australia 2023-24. 

Media notes

• PJ = One petajoule is 10¹⁵ joules, or 278 gigawatt hours. A glossary is available for key terms within this release.
• When reporting ABS data you must attribute the Australian Bureau of Statistics (or the ABS) as the source.
• For media requests and interviews, contact the ABS Media Team via media@abs.gov.au (9am-5pm Mon-Fri).
• Subscribe to our media release notification service to get notified of ABS media releases or publications upon their release.
• Watch our data crash course, designed especially for journalists, to learn how to find, download and interpret our data.

Source: https://www.abs.gov.au/media-centre/media-releases/decrease-domestic-energy-use-driven-households

Putting a face to this energy poverty hardship;

Australians are skipping meals and medication to afford rising energy bills, research finds

April Glover
March 13, 2025 – 2.13pm

Everyday Australians are being forced to choose between putting food on the table and paying their power bills, new research has found.

Half of the 1011 people surveyed by the Australian Council of Social Service said they were skipping meals and going without medication to keep the air conditioning or heating on.

Some said they were selling their belongings or using buy now, pay later (BNPL) products to afford their skyrocketing energy bills.

Others said they were simply avoiding cooling or heating their home altogether to limit energy use.

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Read more: https://www.nine.com.au/australia-news/energy-bill-prices-australians-skipping-meals-to-afford-power-bills-research-finds-20250313-p5zbz0.html

Despite establishment attempts to project general tone of green optimism, the Australian government is at least a little worried about the economy – they recently commissioned a carbon leakage report, an attempt to identify which industries Australia was losing and would lose if the government tightens the screws on carbon taxes.

Final report from the Australian Carbon Leakage Review 

• 12 minute read
• 19 Feb 2026

The final report published by the Carbon Leakage Review offers an important insight into whether Australia may adopt an import-based border carbon tax. 

In brief 

The Department of Climate Change, Energy, the Environment and Water (DCCEEW) has completed its review into whether additional policies are needed to address carbon leakage in Australia. The review concludes that while current Safeguard Mechanism settings are effective in the short to medium term, additional targeted measures are likely to be required for specific commodities as leakage risks from imports evolve. In particular, the report identifies a border carbon adjustment (BCA) as the preferred instrument for a select set of high‑risk commodities to ensure a level playing field for Australian producers subject to domestic carbon constraints.  

The report concludes that any proposed BCA mechanism should mirror the Safeguard Mechanism’s scope (i.e. scope 1 emissions), avoid export rebates, remove Trade Exposed Baseline Adjustment (TEBA) provisions for covered commodities, and be staged, starting with cement and clinker, and later expanding to cover lime, steel, glass, and ammonia and derivatives.  

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Read more: https://www.pwc.com.au/tax/tax-alerts/final-report-from-the-australian-carbon-leakage-review.html

But I can understand why greens think inflicting hardship on ordinary people is a success story. They don’t seem to care about hardship for other people. The green ideal of a sustainable economy is Cuba – at least it was, until the problems became impossible to hide.

Can We Learn From Cuba’s Sustainable Revolution?

ByElias Ferrer,

Former Contributor. I write on the key issues for global energy, with a focus on LATAM.Aug 24, 2023, 11:37am EDTAug 30, 2023, 11:58am EDT

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In the last two decades, Cuba has made important achievements in building a more sustainable society, in part because, and in spite of, the many hurdles it faces. Such feats have been the result of efforts, innovation and entrepreneurship from all levels of Cuban society; from state-led campaigns to cooperatives, businesses, organised communities and individuals.

Cuba’s form of government is not the subject of this article, while it may be for many others who wish to discuss it. Instead, the point is to foster debate on the attainments, regarding sustainable development, in a poor country which has also been under heavy sanctions for more than 60 years.

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Read more: https://www.forbes.com/sites/eliasferrerbreda/2023/08/24/can-we-learn-from-cubas-sustainable-revolution/

Cuba Sets Solar Power Record, Surpassing 900 MW of Photovoltaic Generation

La revolucion energetica: Cuba’s energy revolution

Cuba: The Renewable Revolution Shaping the Caribbean

etc,

Now greens have started celebrating Australia in the same way they used to celebrate Cuba, lets just say this doesn’t fill me with confidence about the economic future of my country.