Australia's future population — facing up to difficult choices

In the absence of a national population policy, Australia is moving towards a more or less stable population of around 23 to 25 million people in one or two human generations' time.

A new report by the CSIRO Resource Futures team looks at the future impact of three population/immigration scenarios on infrastructure, resources and the environment to the year 2050.

Our report focuses on the environmental aspects of population impact, with particular emphasis on the quality and quantity of water, soils, biodiversity, atmosphere and natural amenity.

The first scenario considers what would happen with a zero net immigration rate. The second concerns an immigration rate of 70,000 a year (the current policy setting) and in the third (high population) scenario the rate is set at 0.67 per cent of the current population per year.

Under the low scenario, Australia's population would be 20 million by 2050, the medium scenario gives a population of 25 million and the high scenario results in a population of 32 million by 2050. By 2100 the scenarios give between 17, 25 and 50 million people.

Significant progress toward a sustainable physical economy in Australia requires more than just managing our future levels of population. It will also require the simultaneous management of infrastructure, lifestyle, energy, international trade, inbound tourism and the technology incorporated in key machines and processes.

The scenarios show continued growth in a range of key sectors of the physical economy at least until 2020. Even under the low population scenario, declining household size, internal migration patterns and requirements for tourism accommodation will stimulate activity for the building industry. In terms of the physical economy, this growth gives us cause to be optimistic in the short term.

The reasons for optimism are that 20 years of assured activity gives the nation time to implement substantial innovation and that stocks of buildings, motor cars, passenger transport and freight systems that incorporate the cleanest, most advanced technology will have time to penetrate the national system.

And, as long as these trends eventuate, growth could underpin new export industries that are rich in services and information, which can substantially replace the current export mix.

Under our high-population scenario, the population is proportionally younger. The proportion of dependent people - important for health and welfare issues - is greater than for the low and medium scenarios.

The changing demographic structure envisaged in our scenarios raises important issues. First, regional Australia tends to age more than the cities, due to internal migration. The impact of regional aging is compounded by increasing age-related medical problems in the regions, compared to younger cities. Also, the demand for services such as education will fluctuate, because of slow-moving changes in demographic structures.

The report argues it is feasible to prepare the workforce and its infrastructure well ahead of time, to better accommodate these issues.

Our scenarios suggest that aggressive adoption of technology to address environmental problems shows much promise. Smart designs are already in existence for houses and motor vehicles which can significantly reduce energy use and greenhouse gas emissions. But counteracting this are consumer demands for larger buildings, higher-quality goods, luxury, more powerful vehicles and more frequent air travel.

An efficient consumer-led economy generally embraces growing volumes of cheaper goods and services, which in turn consume increasing levels of energy and material.

Unfortunately, our study suggests that better cars and houses will have little moderating effect on total energy use and subsequent greenhouse emissions. If vehicle and housing policy is to affect future energy use, then each year's complement of new houses and cars must meet the highest, rather than the average, technical standards.

While pricing policies can moderate the use of resources such as energy and water, they are seldom applied to stabilise resource use in a physical sense.

The direct and indirect requirements for energy, water and land are directly related to per-capita expenditure. As per-capita expenditure grows, so too does the resource quotient required to produce the sum total of goods and services included in total personal consumption.

Finally, there is the 'rebound effect' where efficiencies gained in one sector give savings (in resources or money) that inevitably migrate to stimulate resource use in another sector.

Our study found that direct population effects (the more people the greater the impact) are important in three areas of resource consumption and environmental quality: stocks of marine fish, stocks of oil and air quality.

The study highlights a growing gap between domestic oil production and domestic requirements past 2010. The higher the rate of population growth, the larger the gap. While imports may fill the gap in the medium term, meeting demands in the longer term will require multiple responses including the discovery of new petroleum provinces, the widespread use of energy efficient vehicles and the development of other fuel sources such as natural gas, oil shale and biomass.

Surprisingly, our study finds that water availability is not likely to be a constraining factor under any of the population scenarios, provided that big changes occur over the next 50 years.

According to the report, without a focus on the variables that change slowly, such as population size, policy design for the physical economy is running blind. We should be focusing on, for example, population aging with a 50-year timeframe.

The study found that a lower population size (20 million people by 2050 driven by an assumption of zero net immigration) resulted in the stabilisation of a range of environmental quality issues (such as emissions in the airsheds of capital cities) and resource use issues (eg household water use). Total greenhouse gas emissions were lower and the physical trade balance was higher.

The key challenges under the low-population scenario related to a rapidly declining population after the year 2100, a larger proportion of aged citizens and the possibility that health-care and pension systems will not be able to cope. It suggests that without substantial structural change, maintaining economic growth in a declining population could be difficult.

Under a scenario representing the status quo - 70,000 net immigration per year, resulting in 25 million people by 2050 - the population stabilises after 2050. Even so, resource use and pressures on the environment keep growing due to assumptions about growth in personal affluence, growth in exports and inbound tourism and a failure to implement cutting-edge technology across all sectors.

The key challenge of this scenario is to move from relative inactivity into aggressive and positive action on several major fronts. How does the nation enable major investment to proceed while addressing failing marine fisheries, declining biodiversity and land and water degradation? How do capital cities restrict edge growth while re-inventing urban transport and energy systems to provide low-carbon transport and energy services with reasonable equity?

The third - high population - scenario (32 million people by 2050) has continuing growth as its key element with an eventual population of 50 million by 2100. While resource use and environmental quality issues are more challenging than in the other scenarios, some ageing issues are proportionally less important. Under this scenario, Melbourne and Sydney become megacities of 10 million people by 2100.

The CSIRO report was comissioned by the Department of Immigration, and Multicultural and Indigenous Affairs. The report can be downloaded here (pdf, 343Kb).