This is an expanded version of a talk I gave in Rockhampton last September to the Fitzroy Basin Association. Put it aside, went overseas, and forgot about it. Digging through old drafts I just came across it.
Has sustainability become a dirty word in Australia?
And should we be concerned?[i]
Introduction
Ten years ago I travelled to Rockhampton to address the Fitzroy Basin Association (FBA) about sustainable development, innovation and the role that community groups might play in restoring and managing our natural systems. To mark my return visit and a follow-up presentation to the FBA in September 2012, I decided to reflect on the current status and recent direction of the sustainability discussion in Australia, and specifically in Queensland. This article has grown out of that presentation and further reflections.
On several occasions this year I have spoken about the topics of “sustainability” and “sustainable development” and their currency in public opinion, policy debates, and business strategy. The upheaval caused by the 2008 global financial crisis has prompted a reactionary response in many quarters as governments, corporations and consumers have bunkered down to ride out the subsequent economic and social storm. The only trouble with this strategy as a short term proposition is that more than half a decade later the global economy remains fragile and depressed with few encouraging signs of positive transformation.
With the primary focus on preserving institutional integrity, economic stability, arresting social decline, and boosting employment, I believe there has been a concomitant decrease in the emphasis given to environmental protection, sustainable development, sustainability innovation, and thinking long term for generations not yet born. Why is this so? Cannot we deal with the impacts of the GFC, the European debt crisis and the political gridlock of the US political system – and still have sustainable development?
A snapshot of the planetary environmental condition gives us a discouraging report.
Planet Earth in decline
Disappointingly, I could not claim on my return visit that our environment was in better condition and under less threat than it was in 2002. It is a sorry fact that at the regional it almost impossible to find an environmental system that is better overall. And for the planet there are enough bleak pointers for the alarm bells to be ringing loudly. Because good efforts, notwithstanding, the scale and exponential rate of population growth, economic development and technological capacity has combined to overwhelm Earth’s natural systems. Globally, the list of threats presents depressingly on the plight of Earth’s environmental health with massive implications for the future quality of all forms of life:
- Global warming and climate change
- Population growth
- Falling ground water tables
- Soils and cropland degradation
- Collapsing fisheries
- Waterways eutrophication and contamination
- Disappearing forests
- Species loss
In Australia, we mirror pretty much the global list of core elements of ecological decline:
- Climate change
- Decline of river systems
- Deforestation
- Land degradation
- Inland salinity
- Sedimentation of waterways
- Marine degradation including threats to the Great barrier Reef
- Biodiversity loss
Right now the greatest environmental impact is being felt as a consequence of the unlocking of the latent economic potential of three billion Asians. During a recent trip to China I saw firsthand the environmental impacts of massive urbanisation and rapid industrialisation. When we were leaving Beijing, as our airplane turned on to the runway I remember being able to see only about half way down the airfield such was the limited visibility caused by particulate in the air. That’s what our coal exports are contributing to in China right now.
The cost of environmental degradation as a percentage of GDP in places like China is already very high. There the World Bank has calculated, poisoned rivers, industrial pollution, polluted skies and greenhouse emissions are costing 9% of GDP. In other words if we factor in the economic costs of environmental impacts to China’s development miracle, one could rightly conclude the country is not even standing still – it is going backwards in absolute sustainability terms. Countries like Nigeria, Pakistan and Iran are doing their best to play in the same endangered environmental zone as China[ii].
In the face of these overwhelming development pressures, the sustainability report card shows up as a big “F” for failure. Like “fixing climate change”, “eliminating poverty”, the “sustainability” meme fails to translate into a mass activity or focussed strategy. Interestingly, colleagues are resorting to other words like “resilience” “well-being” “responsible development” – anything but the word “sustainable” itself. It suggests that ’sustainability’ is becoming a dirty word because it is distracting from other strategies, inapplicable in practice and lacking utility as a core motivation concept. Well, let me table a list of factors which go a long way to explaining why “sustainability” has failed to get traction as a driving force in human affairs.
- Sustainability abused and misused as a word
- When resolve is needed instead we get eco-pusillanimity
- A generation of failed governance
- Reliance on the techno fix offers contradictory possibilities
- Economic and financial focus is all short term
- Household debt constricts the interest of the mortgage class
- Dealing with complexity means dumbing down information, issues and interests
- Disposable politics erodes the potential of citizenship
- Business sustainability – innovation strategy or push-back
- Return of the hydro-illogical cycle reminds us that memory matters
- Change not possible without consumers, markets and price signals
- Maybe getting beyond denial is no longer important
1. Sustainability abused and mis-used as a word
A question posed on the cover of The Economist back in July 2002 “How many planets?” goes to the heart of an even larger conundrum: “Can we live sustainably?” The Economist cover page vividly depicted the human predicament – that if everyone was to live, consume and waste like the populations of the OECD, the resources of at least three Earths would be needed. It was a simple illustration of our unsustainable values, behaviours and development pathways.
The existentialist dilemma was made even more pointed by American Vice President Al Gore who added the moral dimension to discussions of sustainability when he ventured: “Surely, it is wrong to destroy the habitability of our planet and ruin the prospects of every generation that follows ours”[iii].
Sustainability in itself is the most misunderstood and mis-used concept in public discussion today. It’s abuse gives rises a prejudice against the term which draws into question its very utility. The word ‘sustainability’ comes from the French word ‘sustenare meaning ‘to continue indefinitely’. And yet governments of all persuasions have tried to marginalise the idea behind the word by claiming that no one can agree on what it means. Therefore, the critics will say, there is no point insisting on its inclusion in policy and practice. And when sustainability principles are factored in to decisions inevitably the outcome is a bastardised diluted version. The modest steps being made globally toward sustainability reflect in fact a far more deep seated human difficulty in dealing with complexity, systems and cultural change.
Sustainability after all is a systems condition and farmers understand better than most the systems basis of daily life – with their dependence on variable weather, reliance on fickle markets coupled with the more general challenge of trying to achieve some understanding from an urban population which is culturally removed and ignorant of the processes involved with food and fibre production.
In policy terms, sustainability is a systems benchmark aspiration. Natural systems have evolved to optimise their chances of survival and that means closer connectivity, resilience, adaptability, exploitation of potential, and resistance to decline. Indeed the laws of physics remind us that in time all systems begin, grow, decline, and renew (evolve) and die.
Bringing the concept back to the global conversation we have been having for more than a generation now, sustainability is about us (humanity) and our relationship with future generations and the planet – as a living system.
2. When resolve is needed we get instead eco-pusillanimity
No one should underestimate how challenging are the changes required for sustainable development to be mainstream. Along the way many have miscalculated on the weight of reason or scientific argument forcing change. After climate scientist James Hansen first reported to the US Congress back in 1988 about the threat of global warming, there were a number of Bills sponsored to address the issue, leading the then head of the Environmental Defence Fund, Michael Oppenheimer, to say: “I’ve never seen an environmental issue mature so quickly, shifting from science to the policy realm almost overnight”[iv].
How wrong he was, because once the costs of change were factored the vested interests of the fossil fuel lobby rose to the defence of the status quo and American action at the federal level of climate change has languished ever since. The same occurred there in Australia. The Hawke-Keating Government played to the green vote to win the 1990 election, but when Ros Kelly went off to Rio in 1992 her commission to commit Australia to action on climate change stopped at the point of actual cost or impact to the economy.
And what I call eco-pusillanimity (it’s an awful word to pronounce) or that growing sense of timidity for action in the face of actual need for commitment is not restricted to governments. We the people are just as eco-pusillanimous – as the Lowry Institute Poll 2012 reminds us. Since the height of the big drought in 2006 the percentage of Australians who regard climate change as a “serious and pressing problem” about which “we should start taking steps now even if this involves significant costs” has fallen from 68% to 36%. At the same time the numbers in favour of the gradual low cost option on action have risen from 24 to 45% and the actual number opposed to any action that has an economic sting has risen to nearly one in five Australians.[v]
3. A generation of failed governance
It was 20 years ago this year when more than 160 world leaders gathered at the Earth Summit in Rio de Janeiro. Convened by the UN, it was the first the first meeting of it kind to come up with a “comprehensive plan of action to be taken globally” to ensure sustainable development. Agenda 21 with its think global, act local mantra was the centre-piece of the summit and agreement was made in respect of emerging issues like global warming.
A lot has happened over the past generation including the spawning of thousands of initiatives like the Fitzroy Basin Association’s strategy to manage and restore natural landscapes and waterways catchments. But two decades on, as we all know, the so called consensus and promise of action in Rio has dissipated in the mind numbing negotiations of international bureaucracy. It has been further subverted by vested commercial interests, marred by overt political disagreement between developing and developed countries, and lost in the general indifference of the public.
The loser has been Earth’s natural systems, our environment, the enduring vulnerability of billions of people living in poverty, and the general loss of vision by the leading nations. We seem to have lost the capacity to dream and act as our parents’ generation did. And with global leaders preoccupied with the European debt crisis, the American presidential election, and a slow down in Chinese economic growth, this year not as many international leaders returned to Rio to sign off on what has been described rightly as a lot of compromises and “weasel words”. There was lots of “encourage” but not much “we will” in the environment summit of 2012 – and that is a pretty good indicator of the current status of discussion about sustainable development – a lot of words, indeed a plethora of programs, but nothing that cuts through in a transformative way.
Sometimes I wonder if government was lead by younger people with a bigger stake in the future, maybe we would see more creativity and transparency in accounting for the principles of sustainability, especially in addressing the needs of inter-generational equity. The median age of most country populations is well under 50 years, but the average age of most national Cabinets (including Australia’s) is past 50. In India, China and the United States the average age of leaders is positively “senior citizen status” at between 60 and 70 years[vi].
I can recall a number of times over the years older people, some of them having occupied quite senior positions in politics and industry, admitting after listening to one of my talks that the next generation would be left the unfortunate legacy of having to correct and repair many of the poor decisions taken over the past 50 years in the interests of national progress. It’s not a bequest about which we should be proud. To make matters worse, a private acknowledgement of the inadequacy of our approach to many vexatious public policy issues is too often matched in public by a nonchalant dismissal of any cause for concern. “She’ll be right!” is the mantra and an unthinking hope that technology will come to the rescue.
4. Techno fix offers contradictory possibilities
In many different parts of the world, reassuringly there are some exciting and very encouraging examples of innovation, ingenuity and personal commitment pushing the boundaries of sustainable development. Some of the presentations at the conference highlighted the role of farm skills and new technologies associated with precision agriculture that deliver incredible efficiencies, vastly improved farm productivity, and all round benefits including positive environmental spin-offs.
But key lesson of the past decade has been that technology alone will not deliver us sustainable businesses or communities. A sustainable future will require policymakers to deal with issues in a much more transparent, innovative and integrated manner than has been the case over the past few decades.
Without broad behavioural and socio-economic change complementing its capacities, technology will not deliver a superior quality of life for the many more people on an Earth depleted of much of its natural resources. And what will be the role for technology in dealing with the social equity issues which will continue to divide humanity? Already we have a global dichotomy evidenced in OECD countries grappling with the challenges of fertility decline, aging populations and unhealthy lifestyles while the developing world continues to battle enduring poverty, high fertility rates, and entrenched disadvantage.
On the other hand, Marshall McLuhan’s notion of the ‘global village’ might yet become a reality because of increasing social and personal mobility and digital communications that promise to universalise the range of services, products and experiences available to consumers wherever they may be. The downside is that this looming convergence of the digital and natural worlds also threatens to further disassociate humankind from its natural senses as lifestyles become subsumed in the virtual experiences of the ‘I World’[vii]
5. Economics and finance is all short term focus
It is incredibly difficult to persuade people to prioritise longer term concerns on their personal and political agenda. Short term thinking pervades everything and short term gain dominates political, commercial and investment thinking. In Australia we have $1.3 trillion in superannuation funds, too much of which is invested in equities (public companies) from which funds managers expect returns on a 3 monthly basis. Of course if we were to be efficient in our approach to the future and underwriting of sustainable development, we would need a financial and investment sector capable of looking beyond the next three months as the horizon of its focus.
Australia’s superannuation industry is the type of vehicle that should be providing patient capital, yielding long term value. Instead, we have a financial sector that is totally at odds with sustainability. It is short term focussed, overly reliant on the performance of equities and demanding of public companies that they focus on investments that ramp up the price of the stock. The risks of gain and loss are obvious in any cyclical market that is both non-rational and unpredictable. An analysis of the recovery times of the All Ords Index after serious declines shows that it takes at least five years to make up the losses of a crash. It took more than 8 years for the market to recover from the 1987 crash and in 2012 we are still less than 70% of the way back to the prices of early 2008 or the 5000 index mark where it was before being pummelled by the three crises of the US sub-prime mortgage collapse, the resultant contraction in global banking liquidity and the ongoing ravages of a two generations of unsustainable European sovereign debt coming home to roost[viii].
But still our superannuation funds keep punting on equities in preference to infrastructure and the other forms of capital likely to ensure sustainable development of Australia well into the future. This year is no different to any other. So far this year (late October) shares on the All Ordinaries Index are up 13% as investors seek to reap profits from high yielding stocks.
An international economy configured on short term speculation by its finance sector and levels of credit which ignore the basic principles of risk is unsustainable. As far as private sector credit is concerned, Australia has been far more prudential than most other OECD economies with private sector credit here as a ratio of GDP being still well below 150% – in contrast to the US, UK and some of the euro economies where it nears or even exceeds 200%.
6. Household debt constricts the interest of the mortgage class
The short term focus is reinforced at the average household level by another anti-sustainability driver, namely burgeoning growth in average household debt. In a country that otherwise shows a prudential approach to personal credit and market risk, Australia’s housing sector presents a challenging exception that significantly impacts on the quality of life of young metropolitan Australians.
As a percentage of disposable income for the average Australian household, debt has increased from just less than 40% in the 1970s to 150% in 2012 – and the main cause of that increase is the insane price of housing in a country with more space for new housing than just about any other country. According to Moodys, household debt in Australia exceeds that of equivalents in the US and most OECD countries with the exception of the UK and Denmark[ix].
As well as planning policies that have pushed young home buyers to the urban fringe, we have a wealth accumulation culture grounded in the preferential tax treatment of housing. While it suits we baby boomers who have built a sizeable ‘nest egg’ through inflated housing prices, the housing scene in Australia cannot be described as sustainable for all manner of reasons starting with social and inter-generational equity and extending to economic and eco-efficiency. Transport joins education and health as core life functions which cost more today as a proportion of the average pay packet than they did back in the 1980s[x].
7. Dealing with complexity means dumbing down information, issues and interests
Above all else sustainability is a scientific proposition. What has to be done to ensure that human life at an acceptable quality or standard endures into the future? It may have emotional and moral connotations but at its core the question comes down to the laws of thermodynamics, systems theory and flows. And yet increasingly the general public is taking matters which are defined empirically and scientifically and making them a question of belief. For example, the taxi driver will ask “Do you believe in climate change?” A mother will ask “Do you believe in immunisation for whooping cough?” I think the question of belief is one for religion. “Do you believe in God?” I can get that. But to be asked ‘do I believe in climate change?’ that is asking me to range into epistemology and cast an opinion on whether scientific knowledge is valid. It is a wasted question and reflects the “dumbing down” of our education system or at least a weakening in the teaching of science and mathematics.
Compounding the dysfunction of our schooling system is the largely self imposed isolation and learned irrelevance of experts, particularly university academics. I recall a former head of the CSIRO Dr Geoff Garrett saying last year that only 3% of innovation sourced by Australian industry came from universities. A former head of the Australian public service, Professor Peter Shergold has described the influence of our academics on Australian public policy as one of being “seen but not heard”[xi]. In the place of independent career expert researchers, much of the input to national discussion these days is provided by consultant “hired guns”, think tanks funded by particular interests, and media polemicists the so called “shock jocks” of talk back radio.
Risk communication has become a matter of “spin” eg always maximise the benefits and minimise the costs of policy, programs and projects. British Prime Minister Tony Blair was the master of it, but he had local equivalents in PM Kevin Rudd, Queensland Premier Peter Beattie, and the Liberals in power were not bad at it too – viz the Costello budgets which gave away as tax cuts and middle class welfare the dividends of a mining boom and a decade of record terms of trade, masquerading it as responsible economic management.
Complexity pervades, simplicity prevails – modern life in scale, pace, communications and expectations is far more complex than a generation or two ago and yet we keep expecting our teachers, politicians, business leaders indeed anyone in authority to keep it simple and “dumbed down”. The media willingly goes along with this need because most journalists are not sufficiently educated or technically adept to make sense of much of the economic, technological or social complexity. This is certainly the case with the media’s treatment of science – as reflected in its view of climate change as being too complex to communicate and preference for science feel good stories involving topics like a new Mars rover, exotic animals particularly those that photograph well, and new wonder drugs for cancer which give immediate “human interest”.
8. ‘Disposable politics’ erodes the potential of citizenship[xii]
Back in 1995 in his State of the Union Address President Bill Clinton famously said: “The era of big government is over”. ‘How lean is my government?’ seems to be a question many taxpayers are asking these days and yet we get badgered at elections by politicians promising to do more with fewer resources and yet inexorably government seems to grow in size[xiii]. They make these silly promises because we expect them too. For the past 35 years government has been in general retreat from the post-World War II high marks of spending on physical and productivity infrastructure. Instead the expenditures of government have been switched to “service provision” and social subsidy in areas like education, health and social welfare which now account for more than 57% of the Commonwealth Government budget. The importance of the critical “centre” grouping of swing voters who determines the outcome of elections has meant too that from the time of John Howard, the welfare net has been widened to include the suburban middle class.
While political parties on both sides have shared generally in building the public sense of what political editor for the Australian Financial Review Laura Tingle has called ‘great expectations’ and a “culture of entitlement”, they have demonstrated also an equivalent unwillingness to raise the taxes necessary to fund the promises[xiv]. The upshot is performance falling short of promise and frustration and hostility in the electorate. It seems our national vitality has been sapped by a loss of self-belief and confidence in being able to do big things by ourselves – as communities and businesses. Instead we expect of government a variety of roles for which it is neither equipped nor suited – everything from leading and stimulating innovation to sustaining uncompetitive industries.
Public understanding is confused and volatile – amidst the sound bites, the accusations and counter accusations, the hyperbole and distortions, the character assaults, claims and denials – in short, the sensationalist presentation of public policy issues at all levels – not surprisingly, the community has little real opportunity to engage in an informed debate about the future. In its place, vested interest takes up the slack and virtually guarantees that the reforms necessary for sustainable development are relegated to the margins of political debate. ‘
Alienation from politics, distrust of science, refusal of authority – it seems these days any opinion is valid not matter how misinformed, factually mistaken, ideologically prejudiced or just downright wrong it might be. Equally, there is broadly afoot a strong cynicism about the integrity of the public service, government, the media, corporations, scientists, the police – the list goes on. Not everyone shares in the dream or cares for that matter. As Tingle wrote, they feel entitled and angry. In my view too many Australians are content also to contribute little to anything resembling the common good.
Much of the perverse economic and social outcomes that have blotted the past 30 years owes much to the failure of most political systems in western countries to promote political vision of government that is much better that the short term horizons of the managed funds.
Gary Mulgan, CEO of Britain’s National Endowment for Science Technology and the Arts and formerly of Tony Blair’s policy office at No 10 Downing Street, reminded us some years ago, there are four horizons of effective leadership in politics: ‘short’ (<12 months) ‘medium’ (1-3 years) ‘long’ (3-20 years) and ‘legacy’ which is generational in scope. Not surprisingly, politicians of all persuasions like to focus on things they can fix, which is usually short term, and deliver, which is usually in their term of office (3-4 years). They like “doable” projects and the kudos that comes at the ballot box. Anything that extends beyond that horizon is anyone’s guess. While conceivable, even necessary and possibly highly desirable, the legacy projects with their larger positive impact to the long term well-being of a country remain in the realm of the “Who knows?”[xv]
If government is ever to be visionary and up to the challenges of delivering the innovation required for sustainable development, it is not the politicians but we the electors who will have to change – because we get the governments we deserve. Our political leaders tell us what we want to hear, promise us what we want to receive, and marginalise the environment and the next generation because we don’t care enough about them to insist that our governments do something different. The undeniable reality in Australia today is that people want all the services and support government can provide, including best available infrastructure – but parliamentarians on all sides are under pressure to promise lower taxes, smaller budgets, and bigger surpluses. Something has to give….!
Australians feel entitled without civic commitment or preparedness, in football terms, “to make the hard yards” to achieve the things that matter to the sustainability, competitiveness and well-being of the nation. A lot of Australians go to extraordinary efforts to avoid paying tax, for example. In the trades sector it is commonplace for a customer to be offered two prices: a normal commercial quotation and then the alternative “cash only” which goes straight into the black economy. The roll-on effect means less money for State Governments through the GST for schools and hospitals. We want a free roads, health and education system, but are happy to skip the tax part that pays for it. The cash only black economy is a manifestation of the failure of our civic culture in some quarters. A sustainable society requires people with aspiration who value the role of government and subscribe to the notion of the common good. With that there cannot be sustainable development.
9. Business sustainability – innovation strategy or push-back
For 20 years we have discussed and promoted the so-called triple bottom line approach of integrating economic, social, and environmental factors into active consideration and account when making decisions – whether those decisions are in government, business or the community. This was an attempt to “internalise” many of the factors that had been marginalised in the grand sweep of 20th century development at a cost to societies and the planet. Instead of trade off, the triple bottom line approach was about win-win: development that was good for business, communities and the environment.
Before the global financial crisis hit in 2008 there were more general signs of interest in government and business in promoting innovation that would help achieve sustainable development. But with the financial meltdown proponents of business sustainability have been actively countered by a push-back from interests promoting not so much de-regulation, but self-regulation and a trust us we cannot afford this sustainability thing when jobs matter so much. Some of you would have head a few minutes ago a representative of one of the gas companies give their version of the triple bottom line approach in the development of coal seam gas opportunities in the Surat and Bowen Basins. Of course, the presentation revealed an imperfect approach to sustainable development, erring very much on the side of the economic ahead of the ecological and social, because commercial pressures are being acknowledged ahead of the precautionary principle in the rush to get
Queensland gas into Asian markets.
Over the past few years with a changing political cycle and the focus on commercial survival for much of the business sector, the word has been “stick to the knitting”, “get rid of anything that is not obviously making a short term payback” and defer anything optional. For most businesses, the past few years have not been ones for innovation and new directions. In a bearish investment setting characterised by tightening credit and poor consumer confidence, many Australian businesses have jettisoned their embryonic interest in sustainability strategies and innovation.
Ironically, it seems the sustainability revolution for Australian business has been still born or deferred a decade – just when the macro level national sustainability issues Australia will have to deal with over the coming decades come into focus. Arguably, many of our leading politicians and business leaders still have their heads in the sand in preference to facing up to some difficult choices. At least Crown chairman James Packer admits the point, recently describing his post GFC epiphany in the following terms: “I was being too aggressive and had too much debt. I think I just assumed the world was going to keep growing and if you weren’t knocking out 20% compound returns, you were doing badly. I didn’t understand the relevance of risk adjusted returns”.[xvi]
The standing down of a policy and business emphasis on sustainable development mirrors the marginalisation of the other big challenge shaping Australia’s capacity to create new opportunities – namely, its’ lagging productivity performance, alternating and incomplete embrace of innovation, and the need for a major reorientation in industry policy away from sacred cows like the Australia car industry. The exception of course remains the Australian farming sector whose exposure to global markets has denied them the luxury of deferring the need for ever increasing efficiency and innovation in their businesses.
Another contrary driver against sustainable development has been the resurgence in the old fashioned and largely discredited view that business and economic competitiveness is actually undermined by compliance with environmental regulations and an insistence on safe environmental standards. This is a curious assertion popular here in Australia when the Global Competitiveness Index Report for 2011-2012 shows that 7 of the 10 most competitive countries in the world are European – not a place known for slack environmental standards. Indeed the World Economic Forum report shows that national fiscal imbalances are more likely to pose more of a threat to future competitiveness[xvii]. So we should not cop the line about not being able to have jobs growth and strong environmental regulation – it is nonsense.
But I think many in industry and some in government too have lost perspective on these issues. The other day at the Australian Pipeline Industry Association conference, its CEO Kevin Lester, took a crack at environmental standards as impeding business development. He told his audience: “We need to ensure that environmental regulatory and compliance framework is fit for purpose and not some dreamt up ideal that hinders pipeline planning, approvals and construction…” As far as Mr Lester is concerned: “We need to be pragmatic and not lose sight of what we are actually trying to achieve – constructing a pipeline…”[xviii]
I say in response: Yes, the pipeline construction is important and should not be delayed unnecessarily. And yes the APIA does have a reputable environmental code of practice. But the red back spiders he cited reportedly as an illustration of an irrelevance in the environmental impact assessment of a coal project misses the point. Biodiversity does matter and while common red back spiders may not be endangered, the integrity of ecosystems is a salient point in assessing environmental impact. The approach we take to maintaining biodiversity mirrors rather glaringly the core values we uphold as a community on sustainability development. I would have thought that what we were trying to do was build a pipeline sustainably.
Not surprisingly with some leading sections of industry ridiculing environmental regulation and the science that underpins it, some governments here and overseas have proposed or embarked upon a program of cutting so-called “Green Tape”. In the US some of the Republicans in Congress want to get rid of the EPA altogether. Here in Australia the states of New South Wales and Queensland have stripped the environmental agencies of their ‘EPA’ moniker, because it gave too much status to environmental protection within the bureaucracy and encouraged the presentation of frank and fearless advice on matters environmental which made governments uncomfortable.
Ignoring or downplaying the benefits of strong environmental legislation, including the economic dividends that come from a clean environment, healthy workforce, and sustainable resource management, a small but growing chorus of conservative critics (on both sides of the political fence) have slammed environmental protection agencies for being anti-business, killing jobs, and creating development log-jams. Their criticisms parallel closely in conservative quarters with the rise of anti-science thinking and the rather arrogant view that scientific evidence and concern can be dismissed simply by rejecting it. For a quarter of a century, I have been part of a movement that aims to build better environmental protection and awareness, and I will say always that regulation is not the end in itself. It is one tool in the broad spectrum of responses required for sustainable development. Community understanding and interest is far more important because that drives political accountability.
No agency of government is perfect and environmental policy and legislation needs to keep pace with the times and reflect the state of environment and community capacities for sustainability. Undoubtedly, there is scope to improve the administration of environmental matters in most jurisdictions. The Newman Government claims that its Green Tape reduction laws will save Queensland business $11.7m each year, and the State Government about $12.5 million in administrative costs.[xix] Some of that reflects regulatory inefficiency and it should be fixed! My concern would be to ensure that in doing away with some compliance requirements on the part of business, equal effort is made to maintain the good work that has been done over the previous quarter century reducing industrial contamination of the environment. In contemporary Australian government there should be no place for ideological crusades aimed at marginalising environmental governance and the role of relevant agencies.
10. Return of the hydro-illogical cycle reminds us that memory matters
Just recently we have elected a new LNP government here in Queensland, which not unlike other governments is seeking to claim its particular niche, partly by reversing many of the policies and practices of the previous Labor Government. Amidst a rash of cost-cutting measures aimed at reducing public debt and eliminating inefficiency in public expenditure, the Newman Government has also sighted the costly water grid infrastructure built by the Beattie and Bligh Governments to “drought proof”: south east Queensland. In recent weeks we have seen headlines in the Courier Mail like “Dormant plants to cost state millions” and “Water relief: LNP will turn the taps back on to boost revenues”[xx].
Paradoxically the perfect storm of two years of very wet seasons, continuing water conservation by south east Queensland householders, and rapidly escalating electricity prices (which makes operating an engineered water system very expensive) has compounded the massive impacts of the $8-9 billion spent by the Beattie Government in the panicked move to stop Brisbane running out of water in 2008. Now south east Queensland has plenty of water (at least for the next four to five years) the government has no money and wants people, especially industry, to increase consumption so as to pay more and help offset the costs of the infrastructure.
It gives new meaning to the old notion of the Hydro-Illogical Cycle – you know the cycle that starts with rain proceeds through apathy to drought on to awareness and then concern and ultimately panic – as we realise the implications of taking for granted a critical resource like water. The panicked spend in the Beattie years happened because of inaction on water infrastructure during the Bjelke-Petersen, Goss, Borbidge and early Beattie years. Action came too late and when it came it was at top dollar in an absolute sellers market.
A better planned more prudential approach to water cycle management by successive governments could have seen a better outcome at a fraction of the cost. Had we had effective demand management strategies in place long before the emergency we would not have needed both plants. At top dollar we got two for the price of four and Queenslanders will pay for the panicked response for a long time. Tugun’s desalination plant and Bundamba’s water recycling plant are producing only 24 million litres of water daily for power stations that don’t need it[xxi]. With the dams full industry does not want to be paying a premium for engineered water. That’s the nature of the hydro-illogical cycle – when there is plenty of water no one wants to think about it.
Engineers Australia State President Steven Goh rightly says “The plants provide our community with increased water security, allowing us to better manage the risk of drought [and] population growth”[xxii]. Hopefully, we will never again take for granted the importance of ensuring sustainable management of our water resource – but I wouldn’t bet on it.
I say that because these debacles happen in large part because of short term community memory. In January 2011 we had a flood in Brisbane. In fact it flooded here in Rockhampton too, but at least your community remembers that it still floods here. In Brisbane we lost our community collective memory and some blamed three dam engineers for the disaster that ensued. Putting aside any lingering doubts about the efficacy of dam management at Wivenhoe during the 2010-11 summer, none of us can deny that over the 37 years from the time of the previous Brisbane River flood an entire generation of development in SEQ happened in places which were always destined to go under water again. Regrettably, short term community memory actually matches our approach to planning which is also short term – and both mitigate against attempts to promote sustainable development.
11. Change not possible without consumers, markets and price signals
Indeed, if any evidence was needed that pricing a utility or commodity can make a difference to its consumption, look no further than electricity consumption. Professor Mike Sandiford, Director of the Melbourne Energy Institute at the University of Melbourne has shown that the average rate of demand across the National Electricity Network (NEM) in the September quarter of 2012 was 600MW lower than the year before. Throughout most of the last decade conventional thinking projected Australia electricity consumption on an endless upward spiral of about 2% growth annually, when in fact since 2008 average actual demand has fallen from a peak of just over 23 GW to today’s figure of 21.4 GW – or 3.9 GW lower than where it was projected to be had business as usual happened[xxiii]. That disparity amounts to as much electricity as is generated collectively from Callide C at Biloela, Kogan Creek on the Darling Downs, and the 2.4 GW generators at Bayswater in central NSW. It represents billions of dollars in either redundant or avoided infrastructure expenditure.
The economic impact of the Global Financial Crisis (GFC) does not explain this yawning gap to the extent that might be expected. Yes, there is some subsidence in manufacturing for example, but it owes more to broader consumer sensitivity to the rising cost of electricity. According to the Productivity Commission, electricity prices “have risen by more than 50 per cent in real terms over the past five years” mainly because of spiralling “network costs… inefficiencies in the industry and flaws in the regulatory environment” – which covers a mesh of sins as different as State Government ownership, discordance between national agencies, and distortionary interventions such as the Renewable Energy Target.
Interestingly, in posing a solution to the current electricity policy malaise, the Productivity Commission recommends a systems approach comprised of a package of reforms “that addresses the major, interlinked regulatory barriers to the efficiency of electricity networks, including:
- a poor focus on consumers, despite their interests being the overarching objective of the regulatory regime
- inadequate demand management
- costly ways of achieving, and sometimes excessive, reliability requirements
- state regulatory arrangements and network business ownership
- the resourcing and capacity of, and structural arrangements for, the regulator
- the regulatory rules, and the ability of the regulator to apply them”[xxiv].
Queensland Minister for Energy and Water Supply, Mark McArdle, blames the Australian Securities and Investment Commission (ASIC) for not controlling the electricity industry – in the process ignoring the role of the sector’s national regulators and the State owned nature of the infrastructure in his own state. It’s not the only thing that Queensland politicians continue to choose to ignore.
We seem to have a view that a sustainable future for Queensland can be built on the export of fossil fuels, particularly thermal and metallurgical coal, to countries like China and India – when all the indicators point to this being an unpredictable, cyclical and eventually in the intermediate term a dead end proposition. China has already begun decoupling its economic growth from infrastructure investment (the main client of steel and by implication Queensland’s coking coal). China’s GDP growth still hovers around 8% for this year, but the growth in electricity consumption overall is down under 4% – the lowest it has been this century.[xxv] That has happen in part by a downturn in economic activity, but also because of energy efficiency and the closure of many energy inefficiency industries.
Some will call the downturn a normal cyclical “overshoot” because of the earlier excess momentum of the Chinese economy, but its collateral impact on the Queensland economy should alert us to the pitfalls of putting all our eggs in the coal export basket.
I was in China last month meeting a range of university people, scientists, economists and officials and I can assure you the Chinese people do not wake up every morning with a particular wish for a future that involves importing Queensland coal. They dream of economic progress, fuel security and a cleaner environment and opportunities to better exploit their own resources like the Americans are doing with shale gas and renewables. As David Uren, economics editor of The Australian reminded us recently in his book about Australia and China: “Self reliance has long been at the heart of Chinese culture”[xxvi]. Crucially, I have yet to meet the person living overseas who sees it as their job to provide us Australians with an export income for the rest of time. When the demand for fossil fuels diminishes or dries up, our very sustainability as a nation will depend on us having alternative economic outputs, industries, jobs and skills. Question is, will we get it before we miss the proverbial boat?
12. Maybe getting beyond denial is no longer important
Paul Gilding, the former CEO of Greenpeace, has written a book called The Great Disruption which suggests that we won’t have much choice in future. He writes that “things will change. Not because we will choose change out of philosophical or political preference, but because if we don’t transform our society and economy, we risk social and economic collapse and the descent into chaos”. [xxvii] Gilding admits the strength of the deniers and the appeal of the business as usual arguments for framing the future. But he concludes rightly, I believe, that: “It takes a good crisis to get us going. When we feel fear and we fear loss, we are capable of some really extraordinary things.”[xxviii]
My personal sense is that there will not be action appropriate to the challenge we face before there is much more compelling evidence of catastrophic feedback from Earth’s natural systems – be in severe climate change events, biodiversity loss and impacts on production, and growing resource conflict. If the oil industry today is an annual $3 trillion phenomenon, we have seen nothing yet to what will be the water industry in a dry thirsty world where at least half the population grapple with the scarcity of this most essential of resources. And sadly, as Sir Nicholas Stern warned in his Review on the Economics of Climate Change back in 2006, waiting for catastrophe is the most inefficient, most expensive way of dealing with the need for change or innovation.
Sustainable development was never going to be an easy ask. You cannot suggest the transformation of the dominant paradigm and expect it to happen overnight. Far from economics and sociology, matters so monumental take us to the inner realms of human psychology. As people we are conditioned to resist threats to our normal condition. Over 40 years ago Elisabeth Kubler‐Ross, a key figure in what has become the modern palliative care movement, reported on the five stages of dying. There can be no more personally confronting notion than staring death in the eye.
From her interviews with terminally ill people Kubler-Ross distilled that there seemed to be a pattern (not necessarily linear) that involved five stages of grief: denial, anger, bargaining, depression, and finally acceptance[xxix]. The broad social response to the issues thrown up by unsustainable development and the related need to change our economic, social and personal behaviours may not strictly conform to the notion of grief – but there are similarities in the pattern of adjustment. For many there is still denial about what is happening, for others there is bargaining or indifference. I’d suggest to you that in respect of the general proposition of sustainable development, we as a global community are not yet at the point of acceptance. When that will happen is anyone’s guess– but that it must happen is beyond doubt. Encouragingly, as I look around this room and see people committed to playing their part, I am reminded that it is certainly possible.
So in the general analysis, it is impossible not to conclude that Stafford Beer was right so many years ago when he wrote: “Acceptable ideas are competent no more and competent ideas are not yet acceptable.[xxx]” This is the challenge of innovation.
And encouragingly amidst all the negative indicators of the human condition it is quite possible as President Bill Clinton did recently for Time Magazine to highlight ideas that are changing the world for the better. It is hard to argue with Clinton’s view that the liberating benefits of mobile communications technology, the demonstrable business opportunities of green technologies, the medical and community triumphs over HIV/AIDs, the rise of women in politics, and the impatience of the younger generation for justice as was evidenced in the Arab Spring – are not in themselves great cause for optimism about the future.[xxxi]
Indeed, here in Australia confronted with the partisan spite and the political bickering about energy, climate change, health care and cost of living, we ignore the fact that overseas some countries are seriously investing in sustainable technologies and infrastructure. Let me tell you that worldwide the investment in energy is erring on the side of clean. Overall in 2011 clean energy investments far outnumbered money spent on coal fired power stations for example. In the US the $48 billion spent on renewable energy was even greater than the $45 billion spent in China and the $30 billion spent in Germany.[xxxii] And we in Australia worry about being too far out in front reducing carbon emissions, when we are not even key players in the clean energy game. Understandably, the fossil fuel lobby keeps insisting that because Australia has lots of coal to export we should pretend that clean energy technologies don’t exist. But we will not find the clean energy future if we pretend it does not exist.
Let me close by quoting from Peter Senge’s book “The Necessary Revolution” because it reminds us why sustainability has become, if not a dirty word, a sorely overlooked organising concept as modern Australians grapple with the here and now and the material challenges of paying off the mortgage, funding the school excursion, and saving for a holiday. Lost in all of that is any thought of the needs of the next generation. But as Senge asserts, we cannot talk about sustainability without the unborn generation figuring in our calculations. “There is no viable path forward” he wrote “that does not take into account the needs of future generations.” And while institutions matter and big business can do so much and networks like your community-based resource management group rule in shaping our world, “all real change is grounded in new ways of thinking and perceiving” by people like us – individuals one by one.[xxxiii]
[i] This paper has been developed from a presentation delivered to the Fitzroy Basin Association Muster, Leichhardt Hotel, Rockhampton, 18 September 2012.
[ii] See The Economist 16 June 2012 p 58
[iii] Al Gore The Assault of Reason (2007) 213
[iv] Quoted in Mark Bowen, Censoring science: inside the political attack on Dr James Hansen and the truth of global warming (Plume: 2009) New York p 1
[v] The Lowry Institute Poll 2012 p 7
[vi] See The Economist 28 July 2012 p 48
[vii] See the work of the CSIRO, “Our Future World: an analysis of global trends, shocks and scenarios” (Draft) March 2010 – compiled by Stefan Hajkowicz and James Moody with detailed input form over 50 CSIRO scientific and business development staff.
[viii] See Australian Financial Review, 20 October 2012 p 26
[ix] Quoted in a graph Australian Financial Review, 4 October 2012 p 10
[x] Infrastructure Australia, Implementing Change Australia’s Infrastructure 2012 and Beyond – Report to COAG June 2012 p 30
[xi] Professor Peter Shergold “Seen but not heard”, Australian Literary Review, The Australian 4 May, 2011 accessed at http://www.theaustralian.com.au/arts/books/seen-but-not-heard/story-e6frg8nf-1226047007515
[xii] The description “disposable politics’ is drawn from Paul Kelly, The Australian 31 October 2012.
[xiii] See Stephen Kirchner, “Why does government grow?” Centre for Independent Studies policy monographs PM117 accessed at http://cis.org.au/images/stories/policy-monographs/pm-117.pdf
[xiv] Laura Tingle, “Great expectations: government, entitlement and an angry nation”, Quarterly Essay, No 46, 2012
[xv] Geoff Mulgan (2007)” Ready or not: taking innovation in the public sector seriously” NESTA: UK p 14 accessible at http://www.nesta.org.uk/publications/provocations/assets/features/ready_or_not_taking_innovation_in_the_public_sector_seriously
[xvi] James Packer quoted in The Australian Financial Review, 27October 2012 p45.
[xvii] See World Economic Forum, The Global Competitiveness Report 2011 – 2012 accessed at http://reports.weforum.org/global-competitiveness-2011-2012/#=
[xviii] Quoted in the Courier Mail, 16 October 2012 pp 22-23
[xix] Courier Mail 9 October 2012 p 24
[xx] See the Courier Mail 15 and 16 October 2012
[xxi] Courier Mail 20 October 2012 p26
[xxii] Ibid
[xxiii] Mike Sandiford , “An incumbent industry beginning to squeal”, The Conversation, 1 October 2012, accessed at http://theconversation.edu.au/an-incumbent-industry-beginning-to-squeal-9907
[xxiv] Productivity Commission, Electricity Network Regulatory Frameworks, Draft Report Volume 1, October 2012, p 2
[xxv] Goldman Sachs data reported in Australian Financial Review 17 October 2012 p 36
[xxvi] David Uren, The Kingdom and the Quarry: China, Australia, Fear and Greed, Black Inc: Melbourne (2012) p 217.
[xxvii] Paul Gilding, The Great Disruption: How the Climate Crisis Will Transform the Global Economy, Bloomsbury: New York (2011) p 1
[xxviii] Paul Gilding, ‘The Earth is Full’, TED talk February 2012 accessed at http://www.ted.com/talks/paul_gilding_the_earth_is_full.html
[xxix] See *Elisabeth Kubler‐Ross, On Death and Dying, Simon & Schuster/Touchstone: New York, 1969.
[xxx] Stafford Beer, Platforms of Change, New York, John Wiley and Sons: 1975
[xxxi] See Time Magazine, “Five Ideas that are changing the world: for the better” 1 October 2012
[xxxii] Bloomberg New Energy Finance quoted in The Economist 28 April 2012 p 59
[xxxiii] Peter Senge et al, The Necessary Revolution: how individuals and organisations are working together to create a sustainable world, Nicholas Brearly Publishing: London (2008) pp 9-10.
