Media Releases | 19th Jun, 2014

New research finds Victoria’s future economic strength lies in protecting natural assets

19 June 2014

Victoria could create 225,000 new jobs and boost economic activity in key sectors by 22 per cent over the coming 15 years through protecting the state’s natural assets, a research report released today has found.

Bringing Victoria’s Economy into the 21st Century was commissioned by The Future Economy Group, a new coalition of businesses and environmental leaders, and undertaken by the Nous Group.

According to Future Economy Group member Rowan Dowland from bankmecu, this is the first time that detailed research has examined the critical relationship between the resilience and performance of Victoria’s economy and the state of its natural environment.

“This cutting edge research shows that the Victorian economy and the health of our natural capital are inextricably linked. We do not need to choose between looking after nature or the economy, but rather decisions to restore our natural capital will lead to better outcomes for the Victorian economy,” Mr Dowland said.

The research report found that:

  • Victoria could create 225,000 jobs and increase the value added from 8 key industry sectors to the economy by 22 per cent (or $36 billion) by 2028 by restoring environmental assets.
  • Improving the quality of natural assets would see the economy outperform current trend projections and become more resilient to future economic shocks.
  • In contrast Victoria could lose up to half a million jobs and $78 billion dollars in industry value-add unless more is done to protect and restore Victoria’s natural capital.

The report recommends that the State Government immediately:

  • Undertake detailed modelling to determine industries most at risk from declining natural capital
  • Develop a clear plan for the future of the economy that drives employment and prosperity through reducing emissions and pollution, improves resource efficiency and prevents the loss of natural capital,
  • Require the Treasurer to disclose economic costs to and values of the environment through budget papers
  • Continue to measure natural capital through State of the Environment Report

The report urges Victoria’s political and business leaders to adopt six powerful ideas:
1. Taking a ‘cradle-to-cradle’ approach to the manufacture and consumption of goods
2. Ensuring business leaders and government account for the value our State’s natural capital by measuring and accounting for the contribution of the environment to production
3. Redirecting government payments from polluters to problem solvers
4. Introducing well-designed regulations to curb unsustainable corporate behaviour
5. Adopting broader measures of prosperity than GDP
6. Skilling up Victorians to understand the value of natural capital to our economy

“The message is clearer now than ever before.  Business, governments and the community can adopt these ‘powerful ideas’ to ensure Victoria is better placed to resist economic downturns and manage our natural capital in ways that will create more jobs and long term economic activity,” Mr Dowland said.

“Whether you are growing or producing food, providing financial services like banking, insurance, or superannuation, or in the production or distribution of goods and services our State’s natural assets, including water and land, air and energy, are essential to our prosperity.

“The research tells us that if we value and invest in the environment then we protect our economy and enhance the quality of our lives.

“In this year’s State election campaign all political parties have the opportunity to develop policies that recognise that a healthy natural environment is essential to achieving a strong 21st century economy,” said Mr Dowland.

About the Report

The research contained in the report, completed by The Nous Group focuses on:
1) Examining the relationships between Victoria’s economy and natural capital
2) Identifying the Victorian industry sectors most exposed to risks associated with diminishing natural capital
3) Modeling the consequences of four possible scenarios for the future economic and environmental performance of key Victorian industry sectors over the next 15 years
4) Drawing conclusions about the possible future economic risks and opportunities for Victoria associated with natural capital.

Scenarios and associated modeling were developed in workshops involving many business and government professionals from a range of Victoria’s industry sectors – from agriculture to clean technology. Scenarios were measured on two axes of economic and environmental performance.

The Nous Group is a leading Australian owned management consulting and leadership development firm.

About the Future Economy Group

The Future Economy Group comprises business and environmental leaders who have joined forces to research and advocate for innovation and the recognition of the importance of natural capital to Victoria’s economy.

Future Economy Group members include bankmecu, VicSuper, Sustainable Business Australia, Australian Ethical Investment, Whole Kids Organic Foods, Pacific Hydro, Intrepid Travel, Third Ecology and Environment Victoria.

For comments and more information contact Adrian Dodd on 0401 726 476.


Head here to read The Future Economy Group Report and view key findings