1 Australia's Ecological Credit Crisis – a Call for Leadership ...

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1 Australia's Ecological Credit Crisis – a Call for Leadership ...

• The level of carbon dioxide in the atmosphere is on the brink of the critical 400parts per million mark, a level not seen for about three million years. Atmosphericscientists warn we are near or beyond critical tipping points. We have seenimportant progress on tackling climate change. This Government, with thesupport of the independents and Greens, has put a price on pollution and startedinvestment in clean energy. We need to go forward with urgency, notbackwards.The Opposition is committed to scrap the carbon tax and threatening to abolishthe Clean Energy Finance Corporation, which supports the transition to a cleanenergy future. And every year we export more and more coal that will be burnedoverseas, accelerating climate change;• Finally, there is almost universal support among politicians to maximise the rateof economic growth, regardless of the social and environmental costs of pursuingthat approach.Faced with these realities, we urgently need long-term thinking and leadership, not juston environmental issues, but also on economic development and social cohesion.We need to pay attention to the advice of the World Bank, The International MonetaryFund, the International Energy Agency and other UN bodies. All those conservativeinternational agencies recognise that we need to phase out fossil fuel subsidies if wewant a clean energy future.This fundamental change won’t be easy. It will cause conflict because some vestedinterests are profiting from unsustainable activities. It will require courage. But we knowwe can do it. When people get together and our leaders act, huge changes can occurwith long-term benefits.4

People won out over short-term vested interests when governments around the worldacted to ban the chemicals that were depleting the ozone layer. John Howard stood upto the gun lobby after the Port Arthur tragedy and introduced the sorts of restrictions thatare politically impossible in the USA. We are all safer as a result.The Gillard government took on the might of the tobacco industry to enact plainpackaging for cigarettes. As a result, our children are less likely to join the lung cancerepidemic.These sorts of fundamental changes are possible when there is vision anddetermination: vision of a better way, determination to make it happen.A senior adviser to US President Obama said recently that the first wave ofenvironmentalism was about conservation, the second was about regulation, and thethird wave will be about investment.The Australian Conservation Foundation has actively participated in the first two waves.ACF is now broadening its activities. We will continue to campaign to protect ourprecious natural systems from short-sighted and inappropriate development: we stillneed conservation and regulation. But we are also working to mobilise public support forthe changes needed to enable a sustainable future.That means changing our style of economic development, changing the system of taxesand charges that influence the investment pattern, but most fundamentally ending themindless obsession with economic growth at all costs; economic growth at the expenseof our environment, economic growth at the expense of social cohesion, and economicgrowth even at the expense of our material wellbeing.We need a new approach. ACF suggests three fundamental changes:We should invest in smart, clean industries and infrastructure.We should tax pollution more and productivity less.We should measure and invest in community wellbeing.5

First, let me talk about investment in smart infrastructure. Ecological destabilisation isnow a more urgent threat to our security and prosperity than any military threat. That’swhat global business leaders said in the recent annual “Global Risk Report” issued bythe World Economic Forum. Issues such as climate change, food shortages and watercrises were rated both more likely and more severe in their impacts than risks liketerrorism and war.So our investment in ecological security should be a higher priority than militaryspending, for which the government target is two per cent of GDP. Imagine the changesif we were to spend $30 billion a year on a clean economy! That’s just governmentspending, which would leverage much greater amounts of private investment in newindustries.Let me give you three specific examples.The Australian Energy Market operator estimates it would cost $220-250 billion to shiftto 100 per cent renewable energy by 2030. That sounds like a lot, but the 2011Government energy white paper projected $200-240 billion is needed anyway, just tokeep up with business-as-usual demand. Maintaining and expanding the Clean EnergyFinance Corporation would catalyse private investment to support the governmentefforts. Why would we waste $240 billion propping up a highly polluting energy system,when a similar amount would build an entirely new and clean energy system? Thatwould be sound economic management.Investing in smart transport would improve our environment, as well as the lives of themillions of Australians caught up every day in gridlocked traffic or unreliable publictransport systems. SGS Economic and Planning estimates that investing $50 billion by2030 would halve the widening gap in access to public transport and jobs betweensuburban and inner-urban areas. A further $50 billion would put our freight and longdistancerail systems on an effective and sustainable footing. An initial smart grid forelectric vehicles could be set up in our major cities for as little as a billion dollars. $20billion would be enough to give every household an incentive to switch to an electricvehicle within a decade. That would be money better spent than the bottomless pit ofsubsidies for the failing petrol-car industry.6

An increase of just $2 billion in biodiversity protection would enable us to createcontinental-scale protected areas. Investing in our biodiversity is not just an end in itself.It would help agriculture, tourism, education and our biomedical industry. It would alsobuild our resilience to climate change and natural disasters. It should be done in activepartnership with Indigenous Traditional Owners, who have protected our naturalsystems for thousands of years. It would be a great investment in our future to establisha proper integrated network of wildlife corridors stretching from one end of the continentto the other, across public and private land. That would bring lasting benefits to futuregenerations.This ambitious agenda only uses about four years’ worth of the two per cent of GDP Ipropose we spend on ecological security. We can afford to do it. In fact, we can’t affordnot to!These expenditures are not costs, they are genuine investments with measurablereturns, both financial and non-financial. In each case, the return on investment inmodern clean systems is far greater than we would get from polluting technologies,once you take into account environmental and social costs.Secondly, let me tackle the tax system. The Howard government introduced a Goodsand Services Tax. I believe we should have a Bads and Disservices Tax!We must encourage and support the productive activity of workers and companies thatgrow and distribute our food, that build and maintain our houses, that reuse and recycle,that educate our children and care for us when we are sick. It would be economicallymore efficient and fairer to reduce taxes on productive activity, and increase taxes onactivities that are harmful to society or the environment. Taxes on environmentallydamaging activities actually fell in the decade to 2011, from 7.9 per cent of tax revenueto 7.3 per cent. In terms of proportion of total government revenue, our environmentaltax levels are among the lowest in the entire OECD.7

Taxes on fuel use are relatively lower than ten years ago and we still give generous taxbreaks for investing in pollution-intensive activities. Even with our modest carbon price,we have a net carbon pollution subsidy of about $4 billion a year, or about $7 a tonne.And still the miners complain!Phasing out the subsidies for fossil fuel supply and use would increase the incentive forindustries to operate efficiently and use clean energy. It would also generate revenue tolower other taxes. As a realistic target, we should aim to increase environmental taxesto 12 per cent of total tax revenue, about the level in leading OECD countries.Taxing pollution and resource use properly would make it possible to reduce othercharges like personal income tax and company tax. Last year, plans to lower thecompany tax rate by one per cent were abandoned because peak business groupscould not agree on how to fund the reduction. An increase in effective tax rates onpollution, waste and natural resource use could fund a far more ambitious reduction.Modernising our economy will allow us to phase out activities that are morallyindefensible, like expanding our coal exports when we know the world needs to moveurgently to reduce coal-burning to slow climate change, and exporting uranium whichwe know makes the world a dirtier and more dangerous place. The Fukushima accident,fuelled by Australian uranium, should have been a wake-up call, reminding us thatnuclear power will always be a risk to local communities. In a tense and hostile world, itis criminally irresponsible to export fissile material that increases the global capacity fornuclear weapons.As the third big change, we need to move to more responsible measures of wellbeingthan the dangerous delusion that bigger is always better, which drives the obsessionwith having more dollars to spend, even if we don’t have time to make use of what wealready have. Quality of life is not just measured in money. It is measured by time withour family, affordable housing, fulfilling work, access to parks and natural areas withtime to enjoy them, clean air and secure neighbourhoods. We need to measure andvalue quality of life, rather than seeing wealth as the measure of well-being.8

To give just one example, ABS data show 21 per cent of Australian workers are officiallyover-employed. They would prefer to be working fewer hours, even taking into accountthe pay reduction. These are working Australians who don’t have enough time forthemselves, their families, their relationships and their community.In 1973, the Australian Treasury published a major paper entitled “Economic Growth: Isit worth having?” Treasury’s answer: “Obviously the pursuit of growth for its own sakemisses the point: the aim must be to improve the welfare of the community.” Ournational leaders, and most economists, have forgotten this basic insight. Economicgrowth is treated as something to be pursued for its own sake, regardless of whether itis actually leading to improvements in people’s lives or the well-being of the community.There are many better measures of progress than the single GDP figure called“economic growth”. The ABS has its broader “Measures of Australia’s Progress”, theOECD has a wonderful “Progress of Societies” project, the Australian NationalDevelopment Index is poised to release a community-based version, and so on. Yet ournational political leadership seems blind to these initiatives.And so I issue a challenge today to the leaders of our major political parties: tell usduring the election campaign how you intend to measure “progress” over the next termof government.For too long, most decision-makers have seen economic growth as the be-all and endall,the unchallengeable primary goal. Thoughtful economists are now questioning thisobsession with growth. Peter Victor, professor of economics at the University of York,Toronto, wrote Managing Without Growth. He had spent 30 years promoting economicgrowth in the belief that it would end poverty, reduce inequality and enable us to cleanup the environment. Facing the uncomfortable truth that growth by itself had notachieved any of those goals, he accepted the need to question his basic assumptions.It is irrational to continue doing what you have always done and expect a differentresult; if you want a different result, you have to do things differently. You would beappalled if the coach of your favourite football team kept repeating the strategies thatwere causing the team to lose every week.9

The coaching staff of our economic team has been pursuing the strategy of “growth atall costs”, but we are losing every week: we are losing biodiversity, widening inequality,and not even achieving the basic economic objective of making the average Australianbetter off. Using his Treasury’s models, Professor Victor showed Canadians would havea better future if growth was steadily reduced to zero over a few decades.Ross Gittins, economics editor of the Sydney Morning Herald, argued in The HappyEconomist that the goal of the economy should be to improve human happiness - justwhat Treasury said in 1973! By that standard, we are failing miserably by concentratingon one indicator: the overall size of the economy. Bad events increase the GrossDomestic Product: natural disasters, disease outbreaks, chronic illness, violence andcrime. It increases the GDP if it takes you longer to drive to work, if you have moreaccidents or need more medical attention, if your clothes or domestic appliances wearout faster and need to be replaced more often at greater expense. Anything that makesthe Gross Domestic Product more gross appears good by that mindless calculus.But the GDP is not improved if you are happier, if you are healthier, if you are wiser, ifyou spend more time at home with your family, if you enjoy the sunset or the birdsongfrom your veranda. We need to think about what we value and how we get back toimproving our quality of life. The important question is not whether our economy isgrowing, but whether it is developing in the way that will help us achieve our goals inlife, individually and as a community.Most people understand the idea of optimum size. If we put on weight, we are less fitand less able to meet the physical demands of our life. If we lose weight, we knowsomething is wrong.The idea of optimum size also applies to corporations. As they grow, they become morecumbersome and harder to manage. We see the problems of huge firms like Ford andGeneral Motors, trying to respond to the changing world with all the agility of the Titanic.We want our economy to develop and mature, improve qualitatively, become better ableto meet our needs, but its overall size must be limited by the physical and humanresources it can sustainably use.10

If it grows beyond that point and consumes more resources than can sustainably besupplied, or demands more of the workforce than we can supply while having time forenjoying our lives, it is threatening our future.If we can’t live sustainably in Australia, the prospects for the rest of the world are trulybleak. We need to be wise and responsible global citizens, recognising that we share acommon future with all the other members of the human family. The old conception ofourselves as homo sapiens should give way to the goal of being globo sapiens, wisecitizens of the world, taking responsibility for ourselves, our community, all other peopleand the whole complex pattern of life on this planet.After all, this Earth is the only home we have. It is the only home we will ever have.There is no Planet B, no realistic prospect of mass migration to another part of thecosmos or rescue by friendly aliens.We have to behave as if we intend to be permanent residents of Planet Earth. So weneed to recognise the limits of natural systems and live within them, rather thanengaging in a futile endeavour to dominate nature.We must develop social systems that allow us to work together to solve difficultproblems and take the hard decisions now to enable a sustainable future. And thatmeans we have to move beyond seeing consumption as an end in itself, to recognisethat material consumption is, at best, only a means to the end of human satisfaction.We are incredibly lucky to live in this country at this time. We live at a level of materialcomfort that our grandparents could only dream of. But we have to take decisive actionnow or it will be a level of comfort that our grand-children will only be able to dream of.The future is not somewhere we are going. It is something we are creating. It is ourresponsibility, as this most privileged generation in this most privileged country, to re-setour moral and economic compass.11

I said at the start that we have seen real progress on climate action and environmentprotection in recent years, but continue to go backwards on the big measures ofenvironment health.In this election year, I urge the leaders of our political parties to take this challengeseriously.We can’t afford to go backwards, and we can’t afford to continue to deepen ourecological debt.I believe it is realistic and responsible to reform our economy and set these three goals:Invest in smart, clean industries and infrastructure.Tax pollution more and productivity less.Measure and invest in community well-being.The Australian Conservation Foundation is now working for these changes.We see them as our moral responsibility to the other species that we share this countrywith, and the future generations who will inherit it from us.I look forward to seeing many of you with us on this journey.***The Australian Conservation Foundation (ACF) stands for ecological sustainability. Weget to the heart of environmental problems by tackling the underlying social andeconomic causes. We work across society to influence urgent, transformative action todeliver lasting change on the scale required to secure a sustainable environment. Webring people together to champion the true value of our environment and its critical rolein sustaining all other systems and in achieving human wellbeing.12

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