Economists say a renewables-led economic recovery would create far more jobs than a fossil-fuel-led recovery.

Economic consultancy Ernst and Young (EY) has issued a report arguing that replacing fossil fuels with renewable electricity and hydrogen will be better for the economy as it attempts to shake off the severe impacts of COVID-19, summer bushfires and other major costs.

The report was commissioned by conservation group WWF Australia.

The report outlines measure that would cost the taxpayer very little and create an estimated 58,000 new construction jobs, such as fast-tracking renewable energy projects already in the pipeline.

It also spells out a further five measures, at a cost of about $2 billion over the forward estimates, which WWF says would generate nearly $10 billion in economic benefits and create a further 45,000 jobs.

Those measures include investment in manufacturing to reduce use of gas and build new clean-technology export industries, making Australia a leading global battery manufacturer, making all buses electric, subsidising solar for community organisations and accelerating the renewable hydrogen industry.

EY and WWF say these aims could be achieved by a mix of tax incentives, direct subsidies and regulations.

Energy and Emissions Reduction Minister Angus Taylor insists that gas is needed to back the country's growing renewable capacity.

“Australia is a world leader in renewables, however we must balance these intermittent energy sources with reliable baseload power,” he said in a statement.

“The Government believes reliable, affordable gas can play an important role in the post COVID-19 recovery in important industries such as manufacturing, which will create jobs and help strengthen the economy.”

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