"Business as usual" will cost us dearly if we don't tackle the problem of global warming. Tim Lubcke looks at the intergenerational economic consequences of Joe Hockey's first Budget.
LET'S BE HONEST. We all know the "budget crisis" is little more than spin. We have a minuscule debt, enviable among the OECD countries.
That's not to say that the budget doesn't have its problems.
The truth is that Labor successfully navigated us through the global financial crisis and the Coalition has successfully got the nation talking about a spending habit no longer suitable beyond that period.
If either party could get over the continual negative rhetoric and many commentators could reply without partisan influence, they would admit as much in a single statement.
While Labor did their part, we need to ensure the current trajectory does not continue, lest our children face a major debt they never earned. We don't want to “pass on the buck” to those who never asked for it.
For that, the Coalition needs to be praised, whether or not their budget proposal is the right solution.
What strikes me as odd is that this fails to translate into actions aimed to mitigate and adapt to climate change.
Is 'Business as Usual' costing us?
Yes, it will if we don’t address global warming, especially the intergenerational economic consequences. Is that a groan I hear rising at the mention of climate change? I'm not sure if the groaner heard of the $8 trillion dollars the global community may have wasted on just the last two years of laziness regarding climate change.
This isn't trivial money and pretty windmills on green rolling landscapes, but serious cash that could have been banked. Instead, it has been eroded from our future GDP in much the same way that the current Australian economic trajectory would do, should we allow the current structure to persist.
Recently, the third U.S. National Climate Assessment report found that climate change is already having a negative impact on prosperity across the States.
Locally, the third State of the Climate report (2014), produced by the Bureau of Meteorology and CSIRO, highlighted that climate change over the past century has also had a noticeable impact on rainfall and extreme fire events.
Rainfall has decreased in the fertile landscapes of the south-east as well as some of the wheat basket of the south-west. Extreme fire events and the length of the fire season have both increased. All of which eat into our potential prosperity.
A study published this month in Nature, found that tropical cyclones are slowly moving southward with increasing climate change. More Aussies will be in the path of fierce tropical storm surges, with the expenses that comes along with it.
This is but a small part of the story. We have serious economic justification for continuing research into climate adaptation and mitigation strategies that can buffer us against further erosion on our future GDP.
What we won't see will hurt our pockets
Surprisingly, our current government has taken risky measures that may leave the Australian population blind and exposed to potential future, otherwise avoidable, costs.
The first thing this government did when coming into office was to close the Climate Commission.
With the announcement of Hockey's budget this month, CSIRO learnt that they would lose more than $100 million over the next four years, with climate research having to compete in a much larger pool for funding.
More widely known is the government's commitment to scrapping the carbon price.
Through charging the top polluters for their carbon emissions and passing this revenue on to Australians though tax cuts, in essence, it removed the financial advantage for fossil fuels. Even in the short term, the Climate Institute found that the carbon price has already led to a positive shift towards renewable energy use.
The alternative, Direct Action, lacks direct funding and is likely to be difficult to administer. For instance, The Australia Institute suggests as must as 150, 000 projects proposals might be submitted for approval. This would require a team of highly trained public servants to assess these proposals, offsetting proposed cuts to the public sector within the budget.
Moreover, Direct Action funds the biggest polluters to reduce their emissions wherever possible (somewhat limited for a coal power station, for example). There is no market-based incentive for the average Aussie to change their behaviour or select goods and services to buffer against future climate change.
The massive cuts to climate research and climate change related administrators are at odds with the message the Coalition government has provided alongside their first budget on debt projections.
Lost in broader economic context
“Our future depends on what we as a nation do today... for all of us, the government's solemn duty is to build a stronger Australia... Every generation before us has contributed to the quality of life that we enjoy today... Prosperity is not a gift. It needs to be earned... Now it is our turn to build.”
Inspiring words from Treasurer Joe Hockey following the release of his first budget.
Our future indeed depends on the actions we take today.
We can bet on our coal reserves and trade it to the world to see just how much more global temperatures will rise. Or, we could use our strong economic position to transform ours to a low-carbon economy and then trade this expertise.
Our wealth and quality of life are built on the work of previous generations.
Failing to acknowledge the changing climate and continue with business as usual is only to degrade the quality of life for future generations. It will be them who will endure longer fire seasons and tropical storms with a wider range of fury.
Prosperity has never been a gift, we have been lucky and continue to be so with the resources we have, both natural and within the capacity of our population.
Hockey is correct; now it is the time to build. However, we must take a moment to reflect just what type of future we are planning for.