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So Australia wants to become innovative. The Lucky Country wants to become the Smart Country. It wants to embrace disruptive innovation, face the future boldly and feed the teeming masses of Asia with our clean and green food. Yet, when the choice was there for Australia’s leaders to either choose to grab the opportunity with both hands or to pretend ‘she’ll be right, mate’, they chose the latter. In fact, they chose the latter with such alacrity that at least three Prime Ministers have fallen over the issue. Yet, now our leaders are telling us that we have to become more ‘risk-taking’, ‘entrepreneurial’ and willing to tolerate failure. All good sentiments, but our leaders have been found wanting on the greatest economic challenge of our time: climate change.
I have travelled to Asia many times. I have experienced the traditional elegance of Japan, the ferocious hordes of China, eaten yum cha in Hong Kong, seen the defiance of the Vietnamese, tubed on the Mekong, experienced the wonders of Angkor Wat, got lost in Bangkok, marvelled at the efficiency of Singapore and got food poisoning in Malaysia. But one thing I haven’t done, until now, was swim in the beaches of Asia.
I remembered in the good old days when it was a breeze getting around Melbourne, assuming you were driven (by my parents, not a chauffeur). Now, that I often travel by car for meetings, I notice how some of my favourite short cuts are no longer the fail-safe ways of cutting travel time. Even driving in the middle of the day could test the patience of a saint. We are lead to believe that more roads will reduce congestion. But the facts will tell you otherwise.
A couple of weeks ago, after I posted “Was it Worth It? The Benefit-Cost of Air Pollution in China“, I was asked by Ecoscore to think about the benefit-cost of Australia procrastinating on a carbon price.
— Ecoscore (@ecoscore) March 19, 2015
So, using my understanding of Australia’s carbon policy and economics what do I think? Has it been good for Australia? What can the rest of the world learn from Australia?
My brother sent me a link for Under the Dome and asked me what I thought of it. Under the Dome is a brave documentary on how China’s policy of develop at any cost is costing the people it is meant to benefit. It is made by Chai Jing, a former investigative journalist of CCTV (the State-owned TV network), and was originally hosted on the People Daily’s (another State-owned media organ) website until the Chinese Government ordered its removal. What I find most interesting about the documentary is how personal it is: this documentary rams home the point that the cost of environmental pollution is deeply personal, not an ideological preoccupation of the rich, Western global elite.
Environmental impacts have been depicted as a rich world obsession. But we can see in China that the people most affected are ordinary people, not the elite of the business and political cadres. Ultimately, people will suffer the costs of pollution. The costs to people are the result of environmental degradation and should be weighed against the economic benefits of development in public policy analysis. This blog post will ask the question, was all the air pollution worth it?
In this post, we wrap up our interview with Wayne Lording. Previously, we looked at what Wayne did to reduce his energy bills and water and fertiliser use. See here for an introduction to the series. The key points from the wrap up are:
- Wayne’s investment helped reduced his costs through lower use of LPG, electricity, fertiliser and water,
- Other farmers can also reduce their costs by investing in renewables and water reuse,
- Very easy to install,
- Can benefit very soon from reduced utility bills, and
- Can also benefit from freeing up cash to invest in the farm.
Thanks for watching, I hope you enjoyed the series!
Late last year Lindsey Beck and I interviewed Wayne Lording on his farm. I was interested to see why and how Wayne implemented sustainability technologies on his farm. Essentially, he gains a financial benefit from using renewable energy and water reuse. Interestingly, he is one of the few farmers using geothermal energy on his farm. The two videos here are an introduction this series. In the following weeks we will have videos on:
- Renewable energy, specifically solar and geothermal,
- Water reuse, and
- Wrap up,
In all the videos, I provide a brief economic analysis of Wayne’s investments. I hope you enjoy this series.
One of the extraordinary things to witness at the G20 meeting in Brisbane during the weekend of 15-16 November, was Australia’s rearguard action to keep climate change of the agenda. The G20 host’s justification was that climate change would distract from the economic policy focus. Besides, according to Australia’s Treasurer (i.e. Finance Minister), climate change is no impediment to economic growth. This is despite the wealth of economic research that has been produced that has modelled the economic impacts of climate change. A potential economic impact that has been gaining some traction is the ‘carbon bubble‘. The carbon bubble is where assets that derive most of their value from carbon reserves (i.e. coal, oil and gas) become ‘stranded assets’ as their value falls in response to international climate change action. For a country like Australia that is heavily dependent on fossil fuels for its prosperity, you would think a carbon bubble would have a serious economic impact. I went along to listen to a talk about what a carbon bubble meant for Australia. The panel was made up of Prof. Ross Garnaut, Jemma Green, Dr John Hewson and Tony Wood. Each of them an expert in economics, finance and energy in their own right. This is what I took from the discussion.
A key part of the Australian Government’s Direct Action Plan to presumably reduce emissions is to encourage the sequestration of carbon in soil. Given that the government has ‘axed the tax’ and plans to scale back or abolish the Renewable Energy Target, soil carbon sequestration is a key part of Australia’s carbon abatement policy. Soil carbon sequestration offers the alluring possibility of reducing Australia’s emissions without ‘clobbering the economy’. Instead of penalising businesses for emitting carbon, the Australian Government, through the Emissions Reduction Fund, will provide direct incentives for businesses to be rewarded for reducing carbon. Farmers will be a key beneficiary by producing carbon credits that polluters can use to offset emissions. This will allow Australian industry and consumers to operating as we always have without the associated economic restructuring caused by de-carbonising our energy sector. (more…)