Just wanted to provide a link here to the second article I wrote for The Drum which went up on April 29, 2011. It’s a longer article than usual, and I hope into goes into a good level of depth on the issues of economics and climate change. Full text below.
It draws from a previous post I published here called, Australia’s dubious and enduring political mantra, ‘Go For Growth’.
Aim High on Climate Change Action
Carbon tax. Climate Change. These are terms that now trigger a collective mind-numbing effect on the electorate.
It is unsurprisingly psychologically beneficial and much easier to just switch off. Australians have been patiently waiting for action on climate change for four years, but over that time, public mood and support for action has significantly fallen (you only have to look at the latest ACNielsen Poll). It seems that more and more Australians are willing to be complacent when it comes to taking action on climate change. How did we get to this state? And what is the real unacknowledged reason behind public disillusionment?
To jog your memory, when Kevin Rudd won the federal election in 2007, there was an intoxicating vigour of optimism and consensus alive in the Australian electorate, especially among those Labor and left-leaning voters who had been waiting 11 long (Howard) years to be inspired by a progressive reformist agenda (and I only mean progressive in contrast to Liberal conservative). Rudd’s 2007 election platform was a loud and confident pledge to deliver “New Leadership” and “Fresh Ideas”.
Kevin Rudd’s 2007 election victory speech was a declaration that his government would deliver their reform agenda and that the collective will of the people, as indicated by the decisive election outcome, would be implemented in a continued atmosphere of national unity:
“Today the Australian people have decided that we as a nation will move forward. To plan for the future, to prepare for the future, to embrace the future and together as Australians, to unite and write a new page in our nation’s history.” (Kevin Rudd on election night 2007)
Since that hopeful time we’ve witnessed various failed attempts by the Rudd and Gillard Labor governments to price carbon through an Emissions Trading Scheme, a Carbon Pollution Reduction Scheme and now a carbon tax. Politicians, business leaders, organisations, regular citizens and lobby-groups have fought tooth and nail over the detail of each proposed scheme, not in the aim of achieving a greater reduction in carbon dioxide emissions but, essentially to further their own political and fiscal interests.
What makes this story a particularly sad one is that all of the political posturing which, frankly resembles an ostentatious fencing duel, has been played out in the public arena to no avail. We have (perhaps subconsciously) maintained Australia’s narrowly framed climate drama because at some level, we know that a carbon tax, an ETS or a CPRS just isn’t going to cut it, and if you accept that then you’re really setting yourself up for some tough decision-making. If the Government and the Opposition continue to deal with climate change in such a circumscribed way, our actions will end up as merely token gestures towards a vaguely-imagined carbon-less future.
Who wants to deal with the actual and potentially impossible climate reality we face? It’s certainly not surprising that people aren’t rushing forward with enthusiasm, because actually, looking forensically at the overall situation will mean having to question long-established economic structures and behavioural norms. So what is this deeply embedded and broader problem we haven’t yet faced up to? What is it that we have, perhaps, conveniently ignored?
Economist Tim Jackson says the problem is “the dilemma of growth” which he explores in a recorded lecture delivered at The 2010 Deakin Lecture series in Melbourne. Jackson demonstrates the inexorable link between “the dilemma of growth” and our open struggle to act on climate change in this lecture. He begins by asking the very poignant question: “How can our economy continually expand on a finite planet?” and if you come up trumps on that question then, “Does it (the growth-based model) not carry within it… the seeds of its own destruction?”
To explore these questions in real terms, Jackson constructs a thought exercise by engaging our present economic and environmental realities in a hypothetical scenario:
How hard would we need to try in order to have… a world in the middle of this century of 9 billion human beings, all aspiring to Western-levels of income, all expecting those incomes to grow at 2 per cent per annum (this is the growth-based model that we’re testing here) and yet still achieving stabilisation targets for carbon?
It’s a pretty simple thought exercise. We prize those things; global equity, the growth-based model, our ecological limits… How far and how fast would technology have to run to achieve these goals?
You have to get the carbon intensity of economic activity down from an average of 770 grams of carbon per dollar as it is at the moment, to less than 6 grams of carbon per dollar. [That’s] a 130-fold reduction. Have we ever achieved anything like it? The answer is no, not by an order of [that] magnitude.
And then, of course, if the economy is still growing, then by second half of the century you actually need an economy that is taking carbon out of the atmosphere. The CO2 per dollar goes negative [and] a negative number means what? It means instead of pumping carbon into the atmosphere relentlessly, we have a society that’s pulling carbon out of the atmosphere.
And… when you think about it, just for a moment, you realise we have no idea what this economy looks like. We don’t know what its resource base is. We don’t know what its technology is. We don’t know how its production is organised. We don’t know what its products and services are. We don’t know what life is like in such an economy and yet this is the logical conclusion for a scenario that says, yes we can grow indefinitely, we can achieve global equity and we can meet our carbon targets.
Now it seems to me that unless we want to find ourselves trapped in a form of magical thinking, this is a point at which we need to ask ourselves quite seriously, can this economy… can this society really deliver us that kind of goal? Or should we be thinking more profoundly about the underlying [economic] structures?”
This dilemma of growth is pertinent to Australia and most, if not all, developed countries of the world. Australia may have addressed concerns over economic growth in passing, but I have never once seen a public throw down over the concept of growth, and it almost seems laughable to even suggest this because growth has always been left unquestioned. Have we consciously considered what economic growth means to Australia? Have we asked how much growth is sustainable? What are the positive and negative consequences of growth? In which sectors of the economy and regions of Australia should growth be encouraged? Is there a healthy or unhealthy tension between our economic goals and our environmental ones? What once was a description rightly used decades ago, “growth is good for the economy” has become an economic and political prescription, “we must have growth, it’s always best”.
In the second part of his argument, Jackson engages the field of ‘system dynamics’ to find the crux of the growth-based model; specifically, that part of the model that relentlessly chews through material resources. And that part is business’s constant investment in new products:
The production of novelty [is] incentivised by the pursuit by the firm of expanding markets and achieving profits. [And] this production of novelty by firms… has a perfect counterpart in us, …in consumers… [because] it turns out we have something of an appetite for novelty. We love new stuff.
Investment in the production and consumption of novelty is the second cyclical engine of the growth-based economy. It utilises a socially-driven economic logic that has proved impossible and undesirable to counteract, as:
[The last few decades have seen] a story of us being encouraged, persuaded perhaps, to spend money we don’t have, on things we don’t need, to create impressions that won’t last, on people we don’t care about, or worse still, who don’t care about us. Now what was that about? When all we wanted to do was to create a decent place for ourselves in the social world.
Jackson contends that our pursuit of novelty does not only come from a materialistic desire but also from an anxiety to “live a life without shame” and a need to reinforce our genuine hope for a better future. It is the exploitation of this narrow conception of humanity, (that we are dominated by “self-regarding behaviours”) that will lead to our, and the planet’s, ultimate undoing. Jackson concludes that, “what we’ve done is we’ve created economies [and] we’ve created systems, which systematically privilege [and] encourage one narrow quadrant of the human soul”. But being such a multifaceted species, an economic system that appeals to both our “self-regarding behaviours” and our “other-regarding behaviours” (demonstrating altruism, valuing community and conservation), is possible and Jackson explores this de-carbonised and ecologically sustainable economy in his lecture and book, Prosperity Without Growth.
So why don’t we consider a change in our priorities for investment or even just discuss the growth questions raised in this piece? It’s very simple to answer, frustratingly so. There is a compelling trap in the growth-based model which almost guarantees a politicians unwavering support for the necessity of investment in novelty (thus causing the abuse of finite resources) as a fail-safe for growth and low unemployment:
[By] continually pursuing labour productivity [in a growth economy]… [you are] doing more next year with fewer people and driving people out of work, unless what? Unless your economy is growing [and that growth, as we have seen, is strongly aided by the production and consumption of novelty]. Now here is something that politicians understand. That growth equals jobs, that jobs equals votes and any government that doesn’t respond appropriately will find itself out of office.
The “dilemma of growth”, if left unaddressed by this country, will undermine our ability to effectively deal with climate change, to preserve our finite resources, to prevent further biodiversity loss and to construct the future Australia that Julia Gillard so often refers to.
So what are our options?
We can keep enforcing the narrow parameters of Australia’s climate change discourse, which will allow us to merrily continue arguing over carbon tax details and appropriate compensation. And if you accept that deal, we can also happily remain in denial over the fact that there will be climate change collateral no matter what we do. That some jobs will be lost, that many companies will have to adapt and that the majority of citizens will have to make a regular monetary sacrifice. But what this option essentially means is leaving climate change and environmental sustainability issues for future generations to deal with. And choosing this option means betting on the development of currently unimaginable technological advancements.
Or the other option is that we can face up to the reality that modern humanity has left us. We can be empowered and challenged by new ideas and we can have faith in our ability to innovate and advance technologically. This country can, if it so chooses, be a leader in the creation and production of renewable energy technology. There is great potential for Australia to develop a unique energy system tailored to suit this vast continent. And to do so we must break free of Australia’s inferiority complex and prove that we produce (and hopefully retain) some of the smartest scientists, business people and policy thinkers in the world. It requires a more than substantial boost in government support to relevant research projects and for all Australians to place a higher value on knowledge capital. This option essentially calls for all citizens to re-examine their moral position and consciously decide what their responsibility for acting on climate change should be.
So how can Gillard obtain public and consequently, increased political support for this option? Well, there is a reason why many Australians still have particularly fond sentiments for Gough Whitlam, and that is because Gough Whitlam aimed high. Even if he perhaps, aimed unrealistically high at times and made a few economic mistakes along the way, there is no doubt that Whitlam’s reforms landed just below where he had aimed. That is what Kevin Rudd tried to do in 2007 and during his prime ministership, and that is what Julia Gillard and Labor must do now in order to regain public support and garner consensus in order to act on climate change. It’s time to aim higher and land with effective reforms rather than aim low and land with ineffective political folly.
Note: All direct quotes transcribed from Tim Jackson’s 2010 Deakin Lecture, Prosperity Without Growth.