Drivers of environmental change


Two drivers will continue to shape Australia’s environmental challenges in the coming decades: population growth, distribution and composition; and economic activity. Population and economic drivers lead to a range of specific pressures, which can be global, national, regional or local. Growth and change in our population and industries directly affect the Australian environment through the resources we use and the waste we produce.

The Australian environment is also affected by growth and change throughout the world. Australia is connected to the world through a constant exchange of economic transactions, materials, energy, financial resources, people, ideas, technology and innovations. This exchange affects and shapes our economy and culture, and allows us to influence activities and ideas throughout the world. Similarly, Australia’s environment is influenced by a range of factors beyond its borders, including:

  • the global climate system, and ocean currents and eddies
  • the actions of other countries in relation to climate, migratory species and the marine environment
  • the potential for invasive species to enter Australia
  • globalisation
  • the implementation of new environmental governance arrangements, technologies and management systems.

Population growth, distribution and composition drive environmental change

One of the drivers of environmental change is population growth and demographic change. Demographic change includes the movement of people within a country to new locations, and changes in the composition of the population (e.g. through changes in the relative numbers of different age groups).

Total population is determined by 3 factors: mortality, fertility and net overseas migration. Fertility and mortality rates are decreasing, but, during the past decade, net overseas migration has been the largest influence on the size of Australia’s population, representing about 60 per cent of growth.

In March 2016, Australia’s population was 24 million people—more than double the population in 1966. Assuming current trends, in the next 50 years, this number is projected to increase to between 36.8 and 48.3 million people (ABS 2016a).

Each person added to our population theoretically creates additional demand on natural resources to provide materials for shelter, energy and sustenance—although a direct one-to-one relationship between population growth and increased pressures on the environment cannot be assumed. The extent to which population increase leads to environmental change depends on a range of factors, such as:

  • how many of us there are
  • where and how we live
  • the amount we consume
  • the technologies we use to provide our energy, food, materials and transport
  • how we manage the waste we produce.

Australia’s population has one of the most geographically distinctive distributions of any country, with 90 per cent of people living in just 0.22 per cent of the country’s land area (NSC 2013). At June 2015, 15.9 million people—around two-thirds of Australia’s population—lived in a capital city, and these areas generally experienced faster population growth than the rest of the country. Many areas that experienced strong growth were on the fringes of capital cities, where more land tends to be available for subdivision and housing development (ABS 2016a).

Generally, the most prominent growth outside capital cities between 2011 and 2015 occurred along the coast of Australia, particularly in Queensland. The concentration of Australia’s population near the coast, mostly in urban areas, creates substantial pressure on coastal ecosystems and environments in the east, south-east and south-west of the country (ABS 2015).

Inland rural population growth rates are generally lower than in urban and coastal areas, and rural populations have declined in some locations.

In coming decades, Australia’s capital cities are expected to experience higher percentage growth than their respective state or territory populations, resulting in a further concentration of Australia’s population in metropolitan areas.

Urban growth is already driving land-use change in Australia, with expansion in peri-urban areas (on the outskirts of cities and large towns) having direct impacts on the environment and the availability of farm land. This trend is expected to continue.

Well-planned, higher-density residential areas can reduce the need to expand into greenfield sites, and provide opportunities for more efficient energy use (a result of smaller dwellings) and more efficient transport. Poorly planned and executed urban growth can exacerbate environmental pressures and have direct impacts on biodiversity—for example, through land-use change and by changing the ability of ecosystems to mitigate floods.

The implications of the size, nature and distribution of Australia’s population for the natural environment, our heritage, and the built environment of our cities and regions are considered throughout the SoE 2016 thematic reports.

Economic activity uses environmental resources

The production of goods and services requires energy and materials—metals, minerals, water, food and fibre—all of which come from, and return to, the environment.

From 2011 to the end of 2014, Australia’s gross domestic product (GDP) grew at an average rate of 3 per cent per year. The average annual growth of GDP is projected to be 2.8 per cent for the next 40 years (Australian Government 2015a).

It is not just the growth in the Australian economy that can generate pressures on the Australian environment. In an increasingly globalised economy, production of goods can be for both domestic consumption and export, and domestic consumption can include products that are imported.

Australia produces more energy, mineral and food resources and products for export than for domestic use (DIS 2015, ABS 2016b). Australia is a major net exporter of energy, with around 90 per cent of the country’s black coal production, all production of uranium oxide and around 60 per cent of natural gas production exported in 2015–16 (ABS 2016b, DIIS 2016). Minerals and energy exports were valued at $157 billion in 2015–16. Australia is also a net exporter of food, with exports in 2014–15 worth an estimated $39 billion (ABARES 2015a).

Export markets generate environmental pressures through production, distribution, transport (e.g. powerlines, transport and loading facilities) and waste generation, including greenhouse gas emissions. Australia’s official total contribution to greenhouse gas emissions includes emissions generated in Australia and those associated with the shipping of Australian resources overseas, but not use of these resources.

Trade policies and changes in the economic wellbeing of other countries can affect our environment by changing the demand for Australian goods and services. Globally, economic output is projected to triple between 2010 and 2050 (Ward 2011). Rapid global economic growth has brought many positive results, but, at the same time, increased global demand for food, materials, energy and tourism can increase pressures on the Australian environment.

Population growth and economic activity can be decoupled from environmental harm

Successive SoE reports have highlighted the challenge of reconciling the longer-term perspective of environmental policies with the relatively short-term focus of social and economic policies. Decision-makers have traditionally emphasised issues such as creating jobs and increasing overseas trade over actions to maintain or improve ecosystem resilience—even though these actions may ultimately deliver longer-term social and economic benefits. Furthermore, inadequate consideration of environmental factors in governance and business decisions can have significant social and economic costs in the long term.

So, is it possible to have population and economic growth without harmful environmental impact?

If managed well, drivers such as population change and economic activity can offer benefits for sustainable development, particularly through technological and institutional innovation, and changes in human behaviour.

The term ‘relative decoupling’ is used to describe the situation when the growth rate of an environmental parameter is lower than the growth rate of the economic indicator. The term ‘absolute decoupling’ is used to describe a decline in resource use, irrespective of the growth rate of the economic driver (UNEP 2011, ABS 2016b).

SoE 2011 considered the extent to which Australia’s growing population and economy increased demand on resources and produced more waste, and the associated implications for the environment. It found that, during recent decades, there was some evidence of relative decoupling of economic growth from energy and water use.

SoE 2016 confirms this finding in the energy sector. Relative decoupling is being achieved through improvements in the efficiency of resource use, an increase in the proportion of renewable energy generated from Australia’s abundant supply of solar energy, and the declining costs of producing renewable energy (IRENA 2015). A shift in the Australian economy towards less energy-intensive sectors—such as the services sector (e.g. health, education, finance, tourism)—and changes in human behaviour in terms of energy use have also contributed.

There is also evidence that some indicators of environmental pressure are increasing at a lower rate than the economic indicator of gross value added (GVA) (ABS 2016c; Figure OVW3). The Australian Environmental Economic Accounts show that Australia’s economic production rose by 73 per cent from 1996–97 to 2013–14, as measured by GVA in chain volume terms (chain volume provides timeseries of expenditure and production aggregates, which are free from the direct effects of price change). During the same period, indicators of environmental pressure related to energy consumption increased by 31 per cent, and greenhouse gas emissions increased by 20 per cent, which is lower than the rate of increase in GVA (this is relative decoupling). In contrast, indicators for waste production rose by 163 per cent, considerably more than the increase in GVA during the same period (ABS 2016c).

Continued growth in Australia’s population and economy is likely to increase pressures on the Australian environment. Although there are ongoing efforts to improve productivity at the same time as reducing the relative intensity of use of the environment, there is still considerable room for further decoupling of the Australian economy from the environment.

Jackson WJ, Argent RM, Bax NJ, Bui E, Clark GF, Coleman S, Cresswell ID, Emmerson KM, Evans K, Hibberd MF, Johnston EL, Keywood MD, Klekociuk A, Mackay R, Metcalfe D, Murphy H, Rankin A, Smith DC, Wienecke B (2016). Overview: Drivers of environmental change. In: Australia state of the environment 2016, Australian Government Department of the Environment and Energy, Canberra,, DOI 10.4226/94/58b65510c633b