USA — In the context of the financial crisis, it is understandable that major economic transformation is giving the government, business and the public the heebie-jeebies.
It seems that many, including the government, no longer believe it is “realistic” to take the action necessary to prevent substantial shifts in the global climatic system. However, failing to take adequate action to mitigate climate change will impose substantial economic and societal costs, as well as locking Australia out of the benefits of the emerging green economy.
The speculation in the media this week is that the government will set an emission reduction target of 5 to 15 per cent based on a global greenhouse gas concentration stabilisation of 550 parts per million (ppm), substantially higher than what the world’s scientists recommend.
What does this target mean for Australia? Ina recent interview on the ABC’s Lateline, Professor Ross Garnaut, the government’s climate change advisor, acknowledged that on the balance of probabilities, allowing global emissions to reach 550 ppm would all but destroy the Great Barrier Reef, Kakadu, the Alpine region and do immense damage to the Murray-Darling Basin.
The risk to the economy from this scenario is substantial. Almost 500,000 people are employed in our tourism industry, while over 400,000 people are employed in agriculture, with the sectors contributing almost 7 per cent of GDP. The loss of Australia’s key natural assets would have devastating impacts on these industries and the communities that depend upon them. Further the insurance industry and the health care system can expect to feel growing pressure from increasing frequency and severity of storms, bushfires, heatwaves and the greater risks of epidemics.
According to the Intergovernmental Panel on Climate Change, a grouping of over 2,000 of the world’s best climate scientists, 550 ppm gives us an almost certain chance of warming the planet by 2 degrees. While 2 degrees doesn’t sound like much, it is widely agreed to be a dangerous threshold that should not be crossed. Two degrees may trigger “runaway climate change”, that is, where natural systems start releasing greenhouse gases in such quantities that temperatures rise 4, 5, 6, 7 or 8 degrees, leaving much of the planet uninhabitable.
These substantial risks put the current discussion of economic impacts into perspective. While an emission reduction target of 5 to 15 per cent may be politically “realistic” and economically convenient today, it will result in a significantly changed climate with substantial economic, environmental and societal consequences in the future. This certainly does not represent a prudent approach to managing risks to Australia’s key assets or future prosperity. We must accept the reality of the science and set emission reduction targets that are strong enough to protect Australia’s prosperity, now and into the future.
Recent research published by Dr James Hansen, a world renowned climate scientist and head of the NASA Goddard Institute for Space Studies, shows that to ensure a safe future greenhouse gases should not exceed 400 ppm. He states that this target is required if “humanity wishes to preserve a planet similar to that on which civilisation developed”. For Australia this means implementing targets of at least 40 per cent by 2020. While it will be substantially more costly now to set scientifically based targets, in the long term it is highly benefical as it gives us the best chance of sustaining Australia’s key natural, irreplaceable assets on which we depend.
The good news, as demonstrated by Sir Nicolas Stern, is that while addressing climate change does have costs, they pale in comparison to the costs of failing to take adequate action. The really good news is that addressing climate change can also result in substantial economic benefits, in particular job creation.
Sustaining our economy and society
Australia – the sunniest country in the world and one of the windiest, with abundant supplies of geothermal energy – is well placed to become a renewable energy powerhouse capitalising on the emerging green economy – predicted by the United Nations to be worth $4.2 trillion annually by 2020.
Developing and creating a sustainable economy and society, will create, according to the recent reportGreen Gold Rush, a million new Australian jobs in energy efficiency, renewable energy, and other green-collar and green-professional industries.
President-elect Barack Obama has been quick to recognise that supporting green industries and infrastructure, and creating green jobs can provide substantial and long term economic stimulus to the ailing US economy. Generating jobs while cutting pollution has been flagged as a major component of Obama’s economic recovery plan, with Senate Majority Leader Harry Reid suggesting that the green jobs component could be worth as much as $100 billion. Similarly China has tailored its economic stimulus package to develop projects that enhance the environment and society, including renewable energy and rail transport.
This reflects the experience in countries such as Germany where a regulatory regime favourable to reducing emissions and participating in the European emissions trading scheme, has enabled the green economy to boom. Cloudy Germany is now is a world leader in renewable energy exporting their technology to the world. Businesses have capitalised on the new regulatory environment with turnover in the renewable energy industry increasing nearly fourfold since 2000 and jobs doubling between 2004 and 2007. Jobs in renewable energy in Germany are expected to increase from 250,000 to 710,000 by 2030.
Australia would be wise to follow the example and vision of these countries and disregard the outdated dichotomy of “jobs vs environment”. Our economy, particularly in Australia, is fundamentally intertwined with the health and capacity of our environment. To fail to recognise this will see Australia suffer from substantial climate change impacts as well as fail to capitalise on the emerging green economy – leaving Australia to share the wins of a diminishing pool of traditional industries.
We stand at a crossroads. Both paths forward are uncertain, both have costs, both will transform Australia. We can either choose to take the action we know is necessary and affirm our commitment to Australia’s long term prosperity, or, we can fall short which will lead us to a changed climate. With the urgency of action increasing every day, we must act fast, and we must act smart, because to fail, to quote Professor Garnaut, “would lead to consequences that would haunt humanity until the end of time”.