Actually, Mr Trump, it’s stronger environmental regulation that makes economic winners


Ou Yang, University of Melbourne

Donald Trump has ordered US federal agencies to bypass environmental protection laws and fast-track pipeline, highway and other infrastructure projects. Signing the executive order last month, the US president declared regulatory delays would hinder “our economic recovery from the national emergency”.

Trump withdrew the US from the Paris Agreement for international climate action in 2017 for the same reason. The accord, he said, would undermine the US economy “and put us at a permanent disadvantage to the other countries of the world”.




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This idea that environmental regulation costs jobs and hurts the economy is deeply entrenched in pro-business discourse. But it is true?

To assess the impact of greater environmental policy on economic productivity we analysed data of 22 member nations of the Organisation for Economic Cooperation and Development (OECD) between 1990 and 2007. Our results show little evidence that environmental “green tape” inhibits economic growth over the long run. The opposite, in fact.

Comparing environmental policy stringency

Past studies of the economic impact of tougher environmental policies have tended to be limited by focusing on immediate effects and looking only at individual nations. Such results are of no help to understand the long-term effects and do not allow for straightforward cross-country comparison either.

This is why we analysed cross-country data stretching over a long period. We used data up to 2007 because that is the most recent year for which the OECD provides free access to all the information we needed for our analysis.

We rated nations’ environmental policies using the OECD’s Environmental Policy Stringency Index, developed in 2014. The index calculates a single score based on polices to limit air and water pollution, reduce carbon emissions, promote renewable energy and so on.




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All 22 nations improved their stringency scores to varying degrees between 1990 and 2007. The following shows the trajectory of a few example nations – Australia, Germany, Japan and United States against the OECD average. Germany had the second-highest average score over the 17 years. Australia had the worst.



Author provided

We then did complex calculations to measure what effect more stringent environmental policies had on economic productivity – the value of output obtained with one unit of input – both over the short run (one year) and the long run (after three years).

While results for individual nations varied – reflecting local circumstances – overall our results showed a consistent pattern.

In the short run environmental regulations did increase the cost of production. For example, a carbon tax would make coal more expensive, increasing the costs of things like steel production (which uses coal).

But in the long run tighter environmental policies were associated with greater productivity. This positive effect was greater in countries that took the lead on tougher environmental policies. Germany had the highest average economic productivity growth of the 22 nations.

Healthier environment

This positive association might be due to a cleaner environment in the long run increasing the quality of various “production inputs”, such as better health of workers.

For example, a significant 2017 study showed higher exposure to lead (once added to fuel and paint) in childhood was associated with lower intelligence and job status in adulthood. Bans on lead additives in the 1970s have thus contributed to a smarter workforce – a key input for economic growth, as shown by the work of 2018 Nobel economics laureate Paul Romer.

Environmental regulations may also prompt industries to focus on efficiency, improving their productivity in the long run.

Environmental winners

Our findings suggest stronger environmental protection is compatible with a stronger economy in the long run.

Indeed the evidence is mounting that not taking strong environmental action is likely to have serious economic consequences.

Research suggests, for example, that the continued destruction of natural habitats is making pandemics like COVID-19 more likely, due to pathogens crossing from wild animals to humans.




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Air and water pollution contributes to chemical body burden and disease. Industrialised farming practices have contributed to the loss of about a third of the world’s arable land over the past 40 years.

Then there’s climate change. The consequences of burning fossil fuel are no longer a distant concern. Countries around the world are counting the costs of increased or more catastrophic extreme weather events and other climate impacts.

The countries that show leadership on environmental protection will be the economic winners in the longer run. Those that don’t will be poorer for it in more ways than one.The Conversation

Ou Yang, Research Fellow, University of Melbourne

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Putting stimulus spending to the test: 4 ways a smart government can create jobs and cut emissions



Flickr/Greenfleet Australia

Thomas Longden, Australian National University; Frank Jotzo, Australian National University, and Zeba Anjum, Australian National University

The COVID-19 recession is coming, and federal and state governments are expected to spend more money to stimulate economic growth. Done well, this can make Australia’s economy more productive, improve quality of life and help the low-carbon transition.

In a paper released today, we’ve developed criteria to help get this investment right. The idea is to stimulate the economy in a way that creates lasting economic value, reduces greenhouse gas emissions and brings broader social benefits.

An Organisation for Economic Cooperation and Development (OECD) outlook report released this week predicts an economic slump this year in Australia and globally.

Governments will be called on to invest. In this article, we investigate how stimulus spending on infrastructure can simultaneously achieve environmental, economic and social goals.

Stimulus spending can help the economy, the environment and the community.
Dean Lewins/AAP

Best practice

Europe has already embraced a “green stimulus”. For example, Germany plans to spend almost one-third of its €130 billion stimulus package on renewable power, public transport, building renovations and developing the hydrogen and electric car industries.

In response to the pandemic, New South Wales and Victoria produced criteria for priority stimulus projects which include environmental considerations.

Whether the federal government will follow suit is unclear.




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Most federal stimulus spending has been on short-term JobKeeper and JobSeeker payments, plus the HomeBuilder scheme that will largely benefit the construction industry and those who can afford home improvements.

So how should governments decide what to prioritise in a COVID-19 stimulus package?

Our criteria

We developed a set of criteria to guide stimulus spending. We did this by comparing ten proposals and studies, including current proposals by international organisations and think tanks, and research papers on fiscal stimulus spending after the 2008 global financial crisis. Synthesising this work, we identified nine criteria and assessment factors, shown below.

Before the pandemic hit, Infrastructure Australia and other organisations had already identified projects and programs that were strong candidates for further funding.

We applied our criteria to a range of program/project categories to compare how well they perform in terms of achieving economic, social and environmental goals. We did not assess particular programs and projects.

The four most promising categories for public investment are shown in this table, and further analysed below.

1. Renewable energy and transmission

The electricity system of the future will be based on wind and solar power – now the cheapest way of producing energy from new installations. Australia’s renewables investment boom may be tailing off, and governments could step in.

The Australian Energy Market Operator, in its 2018 Integrated System Plan, assessed 34 candidate sites for Renewable Energy Zones – which are places with great wind and solar potential, suitable land and access to the grid.




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The NSW government has committed to three such zones. These could be fast-tracked, and other states could do the same.

Investment in power transmission lines is needed to better connect these zones to the grid. It’s clear where they should go. Governments could shortcut the normally lengthy approval, planning and commercial processes to get these projects started while the economy is weak.

Now is a good time for governments to invest in large-scale renewable energy.
Mick Tsikas/AAP

2. Energy efficiency in buildings

There’s a strong economic, social and environmental case for investment in retrofitting public buildings to improve their energy efficiency. Schools, hospitals and social housing are good candidates.

Building improvement programs are quick to start up, opportunities exist everywhere and they provide local jobs and business support. And better energy efficiency means lower energy bills, as well as reduced carbon emissions.




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One existing program is showing the way. Under the Queensland government’s Advancing Clean Energy Schools program, which involves solar installation and energy-saving measures, 80 state schools have been brought forward to the project’s first phase as part of COVID-19 stimulus.

A focus on public buildings will bring long-lasting benefits to the community, including low-income households. This would bring far greater public benefit than programs such as HomeBuilder.

3. Environmental improvements

Stimulus initiatives also provide an opportunity to boost our response to last summer’s bushfires. While the federal government has announced A$150 million of funding for recovery projects and conservation, more could be done.

The ACT has shown how. As part of COVID-19 stimulus, 26 people who’d recently lost their jobs were employed to help nature reserves recover after the fires. Such programs could be greatly scaled up.

In New Zealand, the government is spending NZ$1.1 billion on creating 11,000 “nature jobs” across a range of regional environmental projects.

In New Zealand, Jacinda Ardern’s government has created
Daniel Hicks/AAP

4. Transport projects

Several transport projects on the Infrastructure Australia priority list are well developed, and some could be fast-tracked.

Smaller, local projects such as building or refurbishing footpaths and cycle paths, and improving existing transport infrastructure, can be easily achieved. The NSW government is already encouraging councils to undertake such projects.

Sound analysis and transparency is needed

Our analysis is illustrative only. A full analysis needs to consider the specifics of each project or program. It must also consider the goals and needs in particular regions or sectors – including speed of implementation, ensuring employment opportunities are spread equally, and social and environmental priorities.

This is the job of governments and agencies. It should be done diligently and transparently. Australian governments should lay out which objectives their stimulus investments are pursuing, the expected benefits, and why one investment option is chosen over another.

This should improve public confidence, and taxpayers’ acceptance of stimulus measures. This is good practice for governments to follow at any time. It’s even more important when they’re spending billions at the drop of a hat.The Conversation

Thomas Longden, Research Fellow, Crawford School, Australian National University; Frank Jotzo, Director, Centre for Climate and Energy Policy, Australian National University, and Zeba Anjum, PhD student, Australian National University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Why it doesn’t make economic sense to ignore climate change in our recovery from the pandemic



shutterstock

Anna Skarbek, Monash University

It will be tempting for some to overlook the climate change challenge in the rush to restart the economy after the pandemic.

Federal energy minister Angus Taylor has flagged he wants to develop Australia’s gas-fired power to help boost the economy. And conservative political strategist Sir Lynton Crosby recently argued business survival is more important than environment, social and governance matters.




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In the United States, the Trump administration is reportedly contemplating a coronavirus rescue package tailored specifically to oil and natural gas producers, while the Chinese government is trying to stimulate its economy by allowing polluters to bypass environmental regulations.

But the pandemic is not a reason to weaken the commitments to net zero emissions. In fact, climate action is a vital protection against further global shocks, especially as governments plan their post-pandemic stimulus packages.

The economic shock from climate change

The devastation the virus has inflicted is a reminder of our vulnerability and the importance of prevention and mitigation.

It’s a point bolstered by fresh evidence about the scale of economic shock we might face if we fail to meet the targets of the Paris Agreement.

A major study published in Nature Communications last month put a dollar value on the cost of climate inaction. If we don’t prevent the planet warming, we can expect a bill of between US$150 trillion and US$792 trillion by 2100. That’s up to A$1,231 trillion in Australian dollars.




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The predicted “global shock” would be even more financially catastrophic than coronavirus.

The research, however, also points out some good news. The limitation of global warming to 1.5℃ would deliver a corresponding boost, with the global economy growing by US$616 trillion compared to inaction.

Big businesses on board

The economic cost of the shutdowns imposed to address the coronavirus pandemic have not been compared to the value of the lives saved.

Climate change action, on the other hand, has repeatedly been found to pass traditional cost-benefit tests. The solutions are known to already be available and effective if deployed in time.

What’s more, new research – with Nobel prize winner Joseph Stiglitz and leading climate economist Nicholas Stern at the helm – shows climate mitigation actions deliver maximum economic growth multiplier benefits from a stimulus perspective.

It found spending on new green energy projects generates twice as many jobs for every dollar invested, compared with equivalent allocations to fossil fuel projects.

Climate action, then, is vital for the economy. That’s why a remarkable list of business leaders have just added their names to a call for stimulus funds to be invested in what they call “the economy of the future”.

This includes chief executives, chairs and senior executives from major organisations including Rio Tinto, BP, Shell, Allianz and HSBC, together with the Energy Transitions Commission (a global group of companies and experts working towards low-carbon energy systems).

They’re urging for massive investments in renewable power systems, a boost for green buildings and green infrastructure, targeted support for innovative low-carbon activities and other similar measures.

In Europe, a coalition of chief executives, politicians and academics is calling for major investment in projects to make the European Union the “world’s first climate-neutral continent” by 2050.

They say the need for state intervention in the wake of the pandemic provides an unparalleled chance to build economies that are sustainable, resilient and dynamic.

Representatives of global companies have signed the “green recovery” platform. These include PepsiCo, Microsoft, Enel, E.ON, Volvo Group, L’Oréal, Danone, Ikea and more.

Technology is getting better

Boosting the economy with climate action is a message our recent research from ClimateWorks Australia reinforces. It shows how we can achieve the Paris targets with technologies already available.




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But we can only do it if government, business and consumer decisions support the accelerated deployment of these technologies, and only if we roll out mature zero-emissions technology solutions more quickly across all sectors (not just electricity), and invest in development and commercialisation of emerging solutions in harder-to-abate sectors.

Across all sectors of the Australian economy, technology provides opportunities to decarbonise, and has rapidly improved.

For example, advances in lithium ion technology mean high-tech batteries cost only a fifth of what they did ten years ago. So it’s easier and cheaper to store electricity than ever before – even as renewables now offer a consistently cheaper source of generation than fossil fuels.

Lithium ion batteries have come a long way in a short time.
Shutterstock

Innovations like that have changed the game. A new Australian Energy Market Operator study makes clear that, within five years, Australia can run a power grid in which 75% of electricity comes from wind and solar.

A clean stimulus package

Measures these pathways involve are ideally suited to a stimulus package. Governments could create jobs and spur industry, while modernising the economy for the challenges ahead.

How? By building charging infrastructure to support electric vehicles powered by renewables; encouraging investment in sustainable agriculture, fertiliser management and carbon forestry; deploying PV and battery systems across city buildings; or embracing any number of other “shovel ready” solutions.

Through this pandemic we’ve witnessed how people have learned new approaches and switched mindsets almost as quickly as the COVID-19 pandemic lockdowns and social distancing restrictions began.

Just as we’re remembering to wash our hands more than we used to, coming out of the pandemic, it will pay to be more attentive about remembering to choose the zero-emissions option at every step.




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We stand at a crossroads. If government stimulus packages around the world favour carbon-intensive practices and miss the moment to modernise and decarbonise, we will lock ourselves into a warming future.

If, however, we rise to the challenge, we can use the recovery from one crisis to simultaneously address another.The Conversation

Anna Skarbek, CEO at ClimateWorks Australia, Monash University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Want an economic tonic, Mr Morrison? Use that stimulus money to turbocharge renewables



Chris Fithall/Flickr

Elizabeth Thurbon, UNSW; Hao Tan, University of Newcastle; John Mathews, Macquarie University, and Sung-Young Kim, Macquarie University

The chaos of COVID-19 has now hit global energy markets, creating an outcome unheard of in industrial history: negative oil prices. With the world’s largest economies largely in lockdown, demand for oil has stagnated.

Essentially, the negative prices mean oil producers are willing to pay for the oil to be taken off their hands because soon, they will have nowhere to store it.

Federal energy minister Angus Taylor has proposed a partial solution: Australia will spend A$94 million buying up oil, to bolster domestic supplies and help stabilise global prices.

That strategy is a fool’s path to energy security. Right now, the best way to shore up Australia’s future energy supplies is to invest economic stimulus money in renewables – essentially to manufacture our own energy security.

Prime Minister Scott Morrison with Angus Taylor, right, who wants Australia to buy surplus oil.
Mick Tsikas/AAP

A flawed plan

Australia’s oil reserves have for years languished well below the International Energy Agency’s recommended 90 days. Taylor says his plan would address this, and help stabilise (read: push up) oil prices and restore faith in the global oil market on which Australia depends.

But the plan is undermined by a simple fact: unstable global oil prices have been a recurring problem for decades, largely for political reasons well beyond Australia’s control. We need look only to the price shocks triggered by the Yom-Kippur war of 1973, the Iraq war of 2003, and the Saudi drone attack of 2019 – to name just a few.




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Price instability is all but guaranteed to increase in future, as climate change concerns drive insurers and investors away from fossil fuels and towards green energy.

The current chaos actually creates a much better opportunity for Australia: use the massive COVID-19 economic stimulus to manufacture real energy security in the form of renewables.

Buying large volumes of surplus oil will not ensure stable prices.
Flickr

Renewables: a win-win

The price and supply of energy from fossil fuels is vulnerable to natural resource depletion, geopolitical tensions and climate change concerns. This is true not just for oil, but coal and gas too.

The only real path to energy security is manufactured energy such as solar panels, wind turbines, electrolysers, batteries and smart grids.

These technologies can turn infinite natural resources into energy, then store and distribute it to ensure stable supply.

Victoria and South Australia now enjoy higher levels of energy security thanks to large-scale stationary batteries that even out electricity peaks and troughs.




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For example, a large-scale battery in Victoria stores energy produced by the Gannawarra solar farm. The battery provides energy during peak times when there is no sun.

Manufacturing energy is also important from an economic security perspective, promoting the creation of high-tech, high-wage industries.

These industries can create thousands of skilled jobs and open up massive new export markets – all while helping to mitigate climate change. This reality has been accepted by major East Asian economies, from China to South Korea, for more than a decade.

The Australian government must use its enormous stimulus to help local companies dramatically expand their wind, solar, hydrogen and energy storage investments.
This would satisfy domestic energy needs and grow the new green export markets ready and waiting in Asia.

Asia presents huge export potential for Australia’s renewable energy.
DAN HIMBRECHTS/AAP

A jobs boon

There is no shortage of projects waiting to be turbocharged. The government could start with Sun Cable, linking Australia’s and Singapore’s clean energy markets via an undersea cable.

It could also kickstart Australia’s clean hydrogen industry. According to the government’s own National Hydrogen Strategy, developing hydrogen would dramatically reduce Australia’s oil import reliance and energy costs and vastly expand its clean energy exports.

By simply following its own strategy, the government could create about 7,600 skilled and semi-skilled jobs and add about A$11 billion each year to Australia’s gross domestic product to 2050.




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The cheaper energy prices that follow could help Australia revive its techno-industrial base by making energy-intensive manufacturing a viable proposition once again.

According to leading economist Ross Garnaut, Australia could then bring home its long-lost materials-processing industries and re-emerge as a world-leading exporter of (clean) steel and aluminium.

Geopolitical benefits would also flow from Australia becoming a green hydrogen superpower, such as reducing our worrying export dependence on China.

An investment injection in renewables would be a huge jobs boost.
Flickr

Seize the moment

The idea of using the COVID-19 stimulus to turbocharge Australia’s clean energy shift is not pie in the sky. Indeed, doing so is the explicit recommendation of the International Energy Agency, which this week noted:

These huge spending programmes are likely to be once-in-a-generation in scale and will shape countries’ infrastructure for decades to come… Governments can … achieve both short-term economic gains and long-term benefits by making clean energy part of their stimulus plans.

COVID-19 has undoubtedly been disastrous for Australia and the world. But it creates new opportunities in energy, economic security and climate action. To seize these opportunities, the Morrison government must chart a new industrial course for the nation by manufacturing Australia’s energy security.The Conversation

Elizabeth Thurbon, Scientia Fellow and Associate Professor in International Relations / International Political Economy, UNSW; Hao Tan, Associate professor, University of Newcastle; John Mathews, Professor Emeritus, Macquarie Business School, Macquarie University, and Sung-Young Kim, Senior Lecturer in the Department of Modern History, Politics & International Relations, Macquarie University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

BlackRock is the canary in the coalmine. Its decision to dump coal signals what’s next


John Quiggin, The University of Queensland

The announcement by BlackRock, the world’s largest fund manager, that it will dump more than half a billion dollars in thermal coal shares from all of its actively managed portfolios, might not seem like big news.

Announcements of this kind have come out steadily over the past couple of years.

Virtually all the major Australian and European banks and insurers, and many other global institutions, have already announced such policies.

According to the Unfriend Coal Campaign, insurance companies have stopped covering roughly US$8.9 trillion of coal investments – more than one-third (37%) of the coal industry’s global assets, and stopped offering reinsurance to 46% of them.

Blackrock matters because it is big

The announcement matters, in part because of Blackrock’s sheer size.

It is the world’s largest investor, with a total of $US7 trillion in funds under its control. Its announcement it will “put climate change at the center of its investment strategy” raises questions about the soundness of smaller financial institutions that remain committed to coal and to a carbon-based economy.


Exract from BlackRock’s letter to clients, January 14, 2020

Blackrock is also important because its primary business is index funds, that are meant to replicate entire markets.

So far these funds are not affected by the divestment policy. BlackRock’s iShares United States S&P 500 Index fund, for instance, has nearly US$23 billion in assets, including as much as US$1 billion in energy investments.

But the contradiction between the company’s new activist stance and the passive replication of an energy-heavy index such as Australia’s is obvious. The pressure to find a solution will grow.

In time, the entire share market will be affected

One solution might be for large mining companies such as BHP to dump their coal assets in order to remain part of both Blackrock’s actively managed (stock picking) and passively managed (all stocks) portfolios.

Another might be the development of index funds from which firms reliant on fossil fuels are excluded. It is even possible that the compilers of stock market indexes will themselves exclude these firms.

The announcement has big implications for the Australian government.




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Blackrock chief executive Laurence Fink noted that climate change has become the top issue raised by clients. He said it would soon affect all all investments – everything from municipal bonds to mortgages for homes.

Once investors start assessing government bonds in terms of climate change, Australia’s government will be in serious trouble.

Australia’s AAA rating will be at risk

The bushfire catastrophe and the government’s inadequate response have shown the world Australia is both among the countries most exposed to climate catastrophe and one of the worst in terms of contributions to solutions.

Once bond investors follow the lead of Blackrock and other financial institutions, divestment of Australian government bonds will follow.

This process has already started, with the decision of Sweden’s central bank to unload its holdings of Australian government bonds.

Taken in isolation, Sweden’s move had virtually no effect on Australia’s bond prices and yields. But the most striking feature of the divestment movement so far is the speed with which it has grown from symbolic gestures to a severe constraint on funding for the firms it touches.




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The fact that the Adani corporation was unable to find a single bank willing to fund its Carmichael mine is an indication of the pressure that will come to bear.

The effects might be felt before large-scale divestment takes place. Ratings agencies such as Moody’s and Standard and Poors are supposed to anticipate risks to bondholders before they materialise.

It’ll make inaction expensive

Once there is a serious threat of large-scale divestment in Australian bonds, the agencies will be obliged to take this into account in setting Ausralia’s credit rating. The much-prized AAA rating is likely to be an early casualty.

That would mean higher interest rates for Australian government bonds which would flow through the entire economy, including the home mortgage rates mentioned in the Blackrock statement.

The government’s case for doing nothing about climate change (other than cashing in on past efforts) has been premised on the “economy-wrecking” costs of serious action.

But as investments associated with coal are increasingly seen as toxic, we run an increasing risk that inaction will cause greater damage.The Conversation

John Quiggin, Professor, School of Economics, The University of Queensland

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Don’t blame the Murray-Darling Basin Plan. It’s climate and economic change driving farmers out


Sarah Ann Wheeler, University of Adelaide

For the thousand or so farmers in Canberra in the past week venting their anger at the federal government, it’s the Murray-Darling Basin Plan to blame for destroying their livelihoods and forcing them off the land.

We can’t comment directly on their claims about the basin plan. But our research, looking at the years 1991 to 2011, suggests little association between the amount of water extracted from the Murray-Darling river system for irrigation and total farmer numbers.

That’s not to say there aren’t fewer farms in the basin now than a decade ago – there are – but our analysis points to the more important drivers being the longer-term influences of changing climate, economics and demographics.

Indeed our study predicts another 0.5℃ increase in temperature by 2041 will halve the current number of farmers in the basin.

Hostility to water recovery

The waters of the northern basin run to the Darling River and the waters of the southern basin run to the Murray River.
MDBA

Over many decades state governments in Queensland, New South Wales, Victoria and South Australia licensed to farmers more entitlements to water than the river system could sustain. The basis of the Murray-Darling Basin Plan, enacted in 2012, was to rectify this through buying back about a quarter of all water licences to ensure an environmental flow.

A water entitlement, despite its name, does not guarantee a licence holder a certain amount of water. That depends on the water available, and that is determined by the states, which make allocations to each type of licence based on its type of security and current conditions.

With drought, farmers have seen their allocations severely cut back, sometimes to nothing. And partly because they see there’s still water in the River Murray, some are very angry.




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Hostility to water recovery in fact predates the plan’s enactment, to when the federal government began buying back water entitlements in 2008. The Commonwealth now holds about 20% of water entitlements across the basin. More than two-thirds of these licences were recovered between 2008 and 2012.

Lack of correlation

Our research thus covers the period of most significant water buybacks. It also covers the period of the Millennium Drought, from 2001 to 2009, when the amount of water extracted from the river system dropped by about 70%.

Yet we see little evidence reduced water extractions led to more farmers exiting the industry.

As a very broad overview of the situation, the following graph illustrates the lack of correlation between measured water extraction in the Murray-Darling Basin and decreasing farmer numbers.



Water extractions have varied significantly between years, with a big decline over the decade of the 2000s even while farmers’ need for irrigated water increased due to lack of rain. La Niña brought record rains in 2010-11. The current drought across the basin took grip from about 2017.

Yet farmer numbers have declined at a relative steady rate. Within the basin in the time-period we modelled, they fell from about 90,000 in 1991 to 70,000 in 2011. This can be seen as part of a wider trend, with total farmer numbers in the four basin states falling from more than 230,000 in 1976 to barely 100,000 in 2016.

It might be argued that because irrigated farms make up only a quarter of all farms, the overall numbers might mask a greater correlation between water extractions and decline in irrigated farms. While the specific impacts on irrigation farming in recent years warrant further study, there’s no signal in our data pointing to extractions making a discernible contribution to farmer numbers throughout the basin.

Modelling farmer movement

Our findings are based on a specialised data set of population and agricultural census information from statistical local areas from 1991 to 2011. We used climate risk measures from 1961 onwards.

The following infographic shows the exit pattern of farmers by local area between 1991 and 2011.



We included as many climate, economic, farming, water and socio-demographic characteristics as possible to capture historical farmer movements and create a model able to predict movements based on variables such as average temperature.

Need for a multifaceted response

Overall our modelling results suggests the most significant and largest influences on farmer exit are rising temperatures and increased drought risk, followed by the economic factors that have have been reducing the proportion of the population engaged in farming for more than a century.

Declining commodity prices, higher unemployment and urbanisation are strongly associated with farmer exit. Urbanisation, for example, has made it attractive for farmers on city fringes to sell their land to property developers and exit the industry.

Research suggests irrigators in psychological distress are more likely to want the basin plan suspended. Our research suggests their distress is probably not primarily driven by the federal government buying water entitlements from licence holders who sold them willingly. Water recovery and the basin plan is simply an easier focal point of blame than the longer-term trends making the farming lifestyle less viable.




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Nothing will be gained by focusing on short-term “fixes” at the cost of longer-term environmental harm. The problems facing all farmers cannot be addressed in isolation from longer-term global climate and economic trends.

As a society we have to decide what we value: do we want to see such a mass exodus of farmers from the land in the face of a drying climate? If not, future policy for the Basin must consider the real long-term drivers of farm exit and take a multi-faceted approach to climate change, water, land, drought and rural development.The Conversation

Sarah Ann Wheeler, Professor in Water Economics, University of Adelaide

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Australia’s hidden opportunity to cut carbon emissions, and make money in the process



A seagrass meadow. For the first time, researchers have counted the greenhouse gases stored by and emitted from such ecosystems.
NOAA/Heather Dine

Oscar Serrano, Edith Cowan University; Carlos Duarte, King Abdullah University of Science and Technology; Catherine Lovelock, The University of Queensland; Paul Lavery, Edith Cowan University, and Trisha B Atwood, Utah State University

It’s no secret that cutting down trees is a main driver of climate change. But a forgotten group of plants is critically important to fixing our climate — and they are being destroyed at an alarming rate.

Mangroves, tidal marshes and seagrasses along Australia’s coasts store huge amounts of greenhouse gases, known as blue carbon.

Our research, published in Nature Communications, shows that in Australia these ecosystems absorb 20 million tonnes of carbon dioxide each year. That’s about the same as 4 million cars.




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Worryingly, the research shows that between 2 million and 3 million tonnes of carbon dioxide is released each year by the same ecosystems, due to damage from human activity, severe weather and climate change.

This research represents the world’s most comprehensive audit of any nation’s blue carbon. Around 10% of such ecosystems are located in Australia — so preserving and restoring them could go a long way to meeting our Paris climate goals.

A pile of washed-up seaweed and beach erosion at Collaroy Beach on Sydney’s northern beaches. Storms can damage blue carbon ecosystems.
Megan Young/AAP

Super-charged carbon dioxide capture

Blue carbon ecosystems are vital in curbing greenhouse gas emissions. They account for 50% of carbon dioxide sequestered by oceans — despite covering just 0.2% of the world’s total ocean area — and absorb carbon dioxide up to 40 times faster than forests on land.

They do this by trapping particles from water and storing them in the soil. This means tidal marsh, mangrove and seagrass ecosystems bury organic carbon at an exceptionally high rate.

Globally, blue carbon ecosystems are being lost twice as fast as tropical rainforests despite covering a fraction of the area.

Since European settlement, about 25,000km² of tidal marsh and mangroves and 32,000km² of seagrass have been destroyed – up to half the original extent. Coastal development in Australia is causing further losses each year.

When these ecosystems are damaged — through storms, heatwaves, dredging or other human development — the carbon stored in biomass and soils can make its way back into the environment as carbon dioxide, contributing to climate change.

In Western Australia in the summer of 2010-11, about 1,000km² of seagrass meadows at Shark Bay were lost due to a marine heatwave. Similarly, two cyclones and several other impacts devastated a 400km stretch of mangroves in the Gulf of Carpentaria in recent years.

The beach and Cape Kimberley hinterland at the mouth of the Daintree River in Queensland.
Brian Cassey/AAP

Such losses likely increase carbon dioxide emissions from land-use change in Australia by 12–21% per year.

Aside from the emissions reduction benefits, conserving and restoring blue carbon ecosystems would also increase the resilience of coasts to rising sea level and storm surge associated with climate change, and preserve habitats and nurseries for marine life.

How we measured blue carbon – and why

The project was part of a collaboration with CSIRO and included 44 researchers from 33 research institutions around the world.

To accurately quantify Australia’s blue carbon stocks, we divided Australia into five different climate zones. Variations in temperature, rainfall, tides, sediments and nutrients mean plant productivity and biomass varies across regions. So ecosystems in a tropical climate such as North Queensland store carbon dioxide at a different rate to those in temperate climates such as southeastern Australia.




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We estimated carbon dioxide stored in the vegetation above ground and soils below for each climate area. We measured the size and distribution of vegetation and took soil core samples to create the most accurate measurements possible.

Blue carbon must be assessed on a national scale before policies to preserve them can be developed. These policies might involve replanting seagrass meadows, reintroducing tidal flow to restore mangroves or preventing potential losses caused by coastal development.

Seagrass at Queensland’s Gladstone Harbour.
James Cook University

There’s a dollar to be made

Based on a carbon price of A$14 per tonne – the most recent price under the federal government’s Emissions Reduction Fund – blue carbon projects could be worth tens of millions of dollars per year in carbon credits. Our comprehensive measurements provide greater certainty of expected returns for financiers looking at investing in such projects.

Restoring just 10% of blue carbon ecosystems lost in Australia since European settlement could generate more than US$11 million per year in carbon credits. Conserving such ecosystems under threat could be worth between US$22 million and US$31 million per year.




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Blue carbon projects cannot currently be counted towards Australia’s Paris targets, but federal environment authorities are developing a methodology for their inclusion. The reintroduction of tidal flow to restore mangrove and tidal marsh ecosystems has been identified as the most promising potential activity.

Other activities being explored include planning for sea level rise to allow mangrove and tidal marsh to migrate inland, and avoiding the clearing of seagrass and mangroves.

There are still questions to be answered about exactly how blue carbon can be used to mitigate climate change. But our research shows the massive potential in Australia, and allows other countries to use the work for their own blue carbon assessments.The Conversation

Oscar Serrano, ARC DECRA Fellow, Edith Cowan University; Carlos Duarte, Adjunct professor, King Abdullah University of Science and Technology; Catherine Lovelock, Professor of Biology, The University of Queensland; Paul Lavery, Professor of Marine Ecology, Edith Cowan University, and Trisha B Atwood, Assistant Professor of aquatic ecology, Utah State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Global bank urges cities to invest in new infrastructure to adapt to climate change



Our cities need to adapt to cope with more extreme weather events and other impacts from climate change.
Flickr/Shaun Johnston, CC BY-NC-ND

Elisa Palazzo, UNSW

The impacts of climate change on weather, sea levels, food and water supplies should be seen as an investment opportunity for our cities, says global investment banking firm Goldman Sachs.

In a report out last month the bank says cities need to adapt to become more resilient to climate change and this could “drive one of the largest infrastructure build-outs in history”.

The bank says cities will be on the frontline of any need to adapt because they are home to more than half the world’s population and generate roughly 80% of global GDP.




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The state of the debate

The report comes at a time when scepticism and wait-and-see approaches are still permeating the debate on climate action globally. The discussion on reducing emissions is dogged by disagreement on targets and actions to be undertaken.

Report cover.
Goldman Sachs

On the contrary, less emphasis has been placed on adapting to global warming, the consequences of which will play out for decades to come even if we meet the goals of the Intergovernmental Panel on Climate Change (IPCC).

Goldman Sachs has already said it acknowledges the scientific consensus that climate change is a reality and human activities are responsible for increasing concentrations of greenhouse gases in Earth’s atmosphere.

Much global attention has focused so far on the need for climate change mitigation and the reduction of CO₂ emissions. But the bank’s latest report addresses the urban adaptation strategies that are urgently required:

Greater resilience will likely require extensive urban planning, with investments in coastal protections, climate-resilient construction, more robust infrastructure, upgraded water and waste-management systems, energy resilience and stronger communications and transportation systems.

It acknowledges mitigation measures are essential to reduce global temperature in the medium and long term. But it argues we need to act immediately to minimise the current and future effects of climate change in urban areas.

The question is, why would a bank endorse such a vision?

Banking on climate change

The bank’s report is a collection of data and analysis on climate change from well-known sources, such as the IPCC, and a detailed list of expected impacts on cities.

For example, higher temperatures, more frequent and intense storms, and rising sea levels could affect economic activity, damage infrastructure and harm vulnerable residents.

Does the report represent a last call to brace for impact? Or is a more nuanced and somehow optimistic view of the process emerging?

In reality, it’s not surprising this call is coming from an international financial institution such as Golden Sachs. This report needs be read in parallel with the environmental policy framework of the bank which is its “commitment to addressing critical environmental issues”.

The latest report identifies urban adaptation responses and initiatives as market solutions and financial opportunities. It clearly points out where investments should be addressed.

The directions outlined range over infrastructural initiatives to measures that require financial investment. Our cities need better coastal protection, more resilient buildings and open spaces, sustainable water and waste management, and upgraded transport systems.

A call for action

There is a positive takeaway emerging from the bank’s viewpoint which is a pragmatic call for action.

This could reinstate a more optimistic view of climate change. It could overcome the wait-and-see approach by moving the discussions beyond mitigation only.

And the report has the merit to outline some major challenges emerging from the need of financing a comprehensive urban adaptation.




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First, the need for innovative sources of financing and new ways to support climatic transition.

Secondly, the need to look at equity issues emerging from an adaptation process. For example, should a city strengthen flood defences in the CBD or should it upgrade public housing in flood-prone areas? Given the scale of the aims we need to evaluate carefully where best to invest the limited resources available.

But in this respect, no solutions are proposed.

This report is one of the many financial reports on climate change we have seen recently, about the risks and opportunities for the banking and insurance system. It’s probably the first to acknowledge clearly the need for comprehensive adaptation investments to make our cities more resilient.

But in concentrating on the infrastructure needs for cities, the report seems to miss the big picture.

There is still a need to understand how more integrated actions will include the social and environmental dimensions of adapting to climate change to create more sustainable and equitable cities.The Conversation

Elisa Palazzo, Senior Lecturer, Faculty of Built Environment, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Procurement’s role in climate change: putting government money where policy needs to go



Governments can choose to spend money in ways that support climate change policy, including a shift to electric vehicle fleets.
from http://www.shutterstock.com, CC BY-ND

Barbara Allen, Victoria University of Wellington

This story is part of Covering Climate Now, a global collaboration of more than 250 news outlets to strengthen coverage of the climate story.


For three years in a row, the World Economic Forum’s Global Risks Report has identified climate change as the gravest threat for global business and industry.

The disruption of supply chains in food, medicines and even recycling from climate-related events poses innumerable problems for nations. But one way of dealing with various facets of climate change is levering change through central government procurement.

Policies that govern supply and how goods, construction and services are procured are increasingly important as the capacity to mitigate through government purchasing choices faces greater pressure.

As New Zealand is considering zero carbon legislation, new government procurement rules take effect in October.

The rules include broader outcomes, connecting wider social and environmental priorities to procurement processes. This is the first time New Zealand lays out specific rules about how the government plans to use its own purchases to help fulfil its wider promises.




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Charging ahead with EVs

A cabinet paper on effective government procurement policy, released in late 2018, laid out four outcomes, one of which focused on supporting the transition to a net zero emissions economy and meeting the government’s goal of significantly reducing waste by 2020.

The policy’s priorities include reducing the emissions profile of the government vehicle fleet and reducing emissions from fossil fuels used in electricity generation and in direct production of industrial heat. Describing the government’s intention, Economic Development Minister David Parker said:

We are looking beyond just the price of what we purchase, to ensure procurement is contributing to the transition to a low-carbon economy, inclusive growth and prosperity.

The government’s commitment is to make its own vehicle fleet emissions-free by 2025-26. When replacing vehicles, chief executives of government agencies must purchase vehicles with emission profiles substantially below their current fleet average.

The government fleet – at 14,995 vehicles (with only 0.24% electric) – has a job on its hands. But already it is reporting that emissions have dropped between April and July 2019. The reduction is partly due to 400 fewer vehicles and minor shifts in driving patterns.




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This is a gutsy move, especially given cost implications and market challenges. But jurisdictions such as Germany and Sweden have promoted renewable sources for some time through legislation and multiple instruments including procurement that supports innovation. Others, such as Transport London, have been shifting to electric public transport fleets.

New Zealand has been conservative in its approach to linking procurement with objectives beyond “best value”, which is nearly always interpreted as least cost. But times are changing. A growing number of people in most agencies are trying to raise the profile of procurement beyond a purchasing exercise.

Procurement as opportunity and responsibility

Leaving the market to decide how taxpayer funds are spent through a clunky contracting process is missing an opportunity to procure the best services and infrastructure, as well as increasing workforce skills. Research on sustainable procurement has grown and the topic now features at the OECD.

There are different targeted approaches. One is an “emissions dashboard”, which shows the average emissions profile of each agency’s fleet and tracks emission reductions. But dashboards are only indicative, given the inevitable variation in reporting across organisations and the underlying reasons why an agency might have a high emissions rating.

Australia’s Indigenous procurement policy has used a very targeted approach requiring 3% of government contracts go to Indigenous business by 2027. Māori Development Minister Nanaia Mahuta has been looking at the potential for something similar in New Zealand. A report on the benefits of indigenous procurement policies is expected.

Planning to replace vehicle fleets is a tangible use of the procurement lever to move towards lower emissions. But to support a fairly rapid change, supply chains need to be taken into consideration to ensure enough electric vehicles are available.

While there are many technical issues to resolve, New Zealand’s approach to procurement is a step in the right direction. Procurement can’t do everything at once, but it is an important instrument that needs to be directed at policy problems, underpinned by research and evidence.The Conversation

Barbara Allen, Senior Lecturer in Public Management, Victoria University of Wellington

This article is republished from The Conversation under a Creative Commons license. Read the original article.

China succeeds in greening its economy not because, but in spite of, its authoritarian government


Sung-Young Kim, Macquarie University; Elizabeth Thurbon, UNSW; Hao Tan, University of Newcastle, and John Mathews, Macquarie University

From an appalling environmental scorecard 20 years ago, China has pioneered a “global green shift” towards renewable energy and recycling. The country’s drive to dominate renewables manufacturing benefits both China and the world, by sending technology prices plummeting.

Many have attributed this success to China’s authoritarian political regime.

Unlike a democracy, this line of reasoning goes, the state can override special interest groups or opposition parties to impose “authoritarian environmentalism”. This allows a rapid and encompassing response to severe environmental threats.

We take a different view. As the chief investigators on an Australia Research Council Discovery Project examining East Asia’s clean energy shift, we are examining why and how some East Asian countries – including China – are pursuing ambitious renewable energy transformations, and what Australia might learn from these countries’ experiences.

We argue China’s success in greening and growing its economy is not because, but in spite of, its authoritarian government.




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Not that different

China’s approach to greening shares much in common with democratic countries such as Germany, South Korea and Taiwan. All have ambitious programs to rapidly build domestic clean energy industries and “green” their power generation.

As such, our project emphasises the link between China’s green shift and what we call “developmental environmentalism”.

Developmental environmentalism refers to a state approaching greening as an opportunity to promote national techno-economic competitiveness. It helps explain both the drivers of the green shift and the means of its execution.

The “means” are less about authoritarianism and more about the state’s capacity to induce the private sector into a cooperative relationship.

This type of negotiated relationship between the state and industry is the exact opposite of authoritarianism, which pursues its goals irrespective of the wishes of the private sector. Indeed, the pages of history tell us authoritarian leaders are far more likely to misuse their concentrated economic power, resulting in developmental failure.

Democratic successes

China is not alone in its green shift. In fact, some of the world’s most ambitious national greening programs have sprung to life in democratic settings.

Germany

The clearest example is Germany and its widely admired Energiewende (“energy transition”). Germany took an early lead in the development of solar devices through government-sponsored industrial programs.

Then in 2011, in the wake of the Fukishima nuclear disaster, Chancellor Angela Merkel announced the shutdown of Germany’s nuclear power stations.

Countries around the world are now emulating Germany’s Energiewende.

South Korea

In one of East Asia’s most vibrant democracies, South Korea, the election of President Lee Myung-bak in 2008 signalled a shift from intensive fossil-fuel development to “low-carbon, green growth”.

Lee’s focus was on greening the economy by investing in renewables and related infrastructure such as smart grids. His successor in 2013, President Park Geun-hye, continued this approach.

Finally, after President Moon Jae-in swept into power in 2017, South Korea committed to scaling down its use of nuclear energy.

Taiwan

Taiwan provides another fascinating example of a proudly democratic country that has followed in Germany’s footsteps. National efforts to establish a renewables industry began in 2009 under President Ma Ying-jeou. These initiatives targeted various clean energy industries for promotion, including generating solar and wind facilities and batteries.

However, just like Korea, the country’s over-reliance on nuclear energy (facilitated by a state-owned monopoly in the power sector) prevented the growth of a market for renewables.

A breakthrough in the country’s highly contentious debate over nuclear energy came with the election of President Tsai Ing-wen in 2016, who committed to the complete shutdown of nuclear reactors in the country.

Developmental environmentalism in action

These examples provide a clue that China’s ability to green its economy stems from something other than its authoritarian political system. We argue China’s success in greening stems from developmental environmentalism in action.

This does not simply mean a state that is “pro-development” and “pro-environment”. Rather, policymakers see greening the economy as chance to gain a competitive edge over other countries. The pursuit of strategic industry development goals involves nurturing – not displacing, as would occur in an authoritarian setting – “governed interdependence” with the private sector.

Best depicted by the Korean example, developmental environmentalism as a policy initially emerged as a response to threats to national industrial competitiveness. These included acute dependence on fossil-fuel imports, which are highly volatile, and global competitive pressures in the race to gain an early lead in the green economy.

Developmental environmentalism is also a strategic response to domestic challenges, such as the need to drive new sources of economic growth.

Lessons for Australia

If an authoritarian government provides little to no advantage for coordinating a green shift, what lessons might these countries have for Australian policymakers?

The key lesson is it’s not about designing the perfect constellation of policies or about pouring more money into entire industries.

Developmental environmentalism involves the political will to take big risks. Policymakers must target technologies – or segments of the economy – where government support could build national competitiveness.

Of course, this means creating a strategic, long-term approach to industry development, coordinated with the private sector.

Despite political gridlock, Australia is well placed to establish a foothold in the rapidly growing clean energy industry.

As the nation’s leaders engage in a fruitless debate over building new coal-fired power stations, Australian companies with world-class strengths in clean energies are emerging. Nowhere is this growing confidence more evident than in the blossoming of companies that have commercially ready smart microgrid and energy-storage solutions.

It would be a great shame – if not a national tragedy – if these companies were allowed to be picked off one by one by foreign multinational enterprises. This is the sad and familiar story of Australian manufacturing: highly innovative companies – a testament to our wealth of knowledge – are bought out, intellectual property rights absorbed, and manufacturing eventually outsourced. Often, shells of our prized national assets (typically the marketing and sales divisions) are all that remain.




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Yet, in the absence of a coordinated national strategy that focuses on building a national value chain or ecosystem of upstream and downstream players – as the Koreans and Taiwanese have done in smart microgrids – this future appears all but settled.The Conversation

Sung-Young Kim, Lecturer in the Department of Modern History, Politics & International Relations, Macquarie University; Elizabeth Thurbon, Scientia Fellow and Associate Professor in International Relations / International Political Economy, UNSW; Hao Tan, Associate professor, University of Newcastle, and John Mathews, Professor of Strategic Management, Macquarie Graduate School of Management, Macquarie University

This article is republished from The Conversation under a Creative Commons license. Read the original article.