The condition, trend and outlook for the Australian environment are subject to some major drivers of change. Understanding and quantifying these drivers is fundamental to understanding the past, present and future state of our environment.

The 2008 Victorian state of the environment report¹ framed the consideration of these drivers particularly well, and this national State of the Environment report builds on their approach in developing our outlook on Australia’s environment. This approach recognises three major drivers on the environment.

Climate change is a direct driver of change. Population growth (with associated growth in the built environment) and economic growth (with associated increases in consumption of resources and generation of waste) are indirect drivers. As a direct driver, climate change has direct and ongoing effects on the environment, as higher temperatures and changing rainfall regimes in some areas can be expected to have profound and pervasive control over a host of natural processes that underpin the condition and trend of ecosystems. The effects of indirect drivers are mediated by other processes, including the policies, culture and technology that we bring to bear on our use of our environment. For example, population growth is likely to continue to drive the need for expanded suburban development. The size of this impact will depend on how sensitive the planning has been towards local environmental assets and values, and on the effectiveness of policies to improve the energy efficiency of housing and transport.

Economic growth will probably include increased demand for energy and other resources, as well as increased waste generation, with all the accompanying environmental implications for resource development, emissions and waste disposal. Alternatively, economic growth may be largely decoupled from increased consumption of resources and increased waste. Improvements in the efficiency of resource use have led to a weakening of the link between economic growth and energy use over recent decades (Figure 2.1).²

However, in the short to medium term, continued growth can be expected to lead to further increases in demand for energy, with consequent flow-on effects for resource development and emissions. In the longer term, if emissions of greenhouse gases (GHGs) are to be stabilised and then reduced, economic growth will need to be largely decoupled from increased GHG emission, consumption and waste.

There is no question that human activity, through each of these major drivers, has the ongoing potential to degrade our environment. However, establishing clear and precise relationships between these drivers and environmental impacts is not easy, particularly when we are projecting outlooks. The task is made even more complex when we consider the strong and diverse interactions among climate change, economic growth and population growth.⁵ Climate change and economic growth—and, to a smaller extent, population growth—are subject to global processes largely outside the control of Australia. If the collective effect of the GHG emission reduction policies and actions of other nations largely determines the magnitude and rate of climate change, and if Australia’s population and economic growth is strongly subject to future unknown domestic policy as well as global conditions, how can we assess the potential impact of these drivers on our environment?

This report considers scenarios of future climate, population and economy (this chapter), and the implications for the environment from those projections (in each of the nine themed chapters). This report uses the best available scenarios for these drivers—as reflected in their scientific pedigree as well as their general recognition by the Australian Government—as the most robust projections applicable to national planning.

Understanding the trends and environmental implications of these drivers is fundamental to establishing what a sustainable Australia might look like.