greencapitalism how it can save our planet ppt
Bạn đang xem bản rút gọn của tài liệu. Xem và tải ngay bản đầy đủ của tài liệu tại đây (366.36 KB, 25 trang )
How it can save our planet.
By Keith Mcilroy
Copyright 2011 Keith Mcilroy
Smashwords Edition
mailto:
This free ebook has been designed to help you get the message out that we need to change our economic
model to one that is truly sustainable. It is available free from every ebook retailer. Although this is a
free book, it remains the copyrighted property of the author, and may not be reproduced, copied or
distributed for commercial or non-commercial purposes. If you enjoyed this book, please encourage
your friends to download their own copy at Smashwords.com, where they can also discover other works
by this author. Thank you for your support.
*********************************************
“We CAN live a life of limitless economic growth on a planet of limited resources”
In the last 12 years the global economy has doubled to US $70 Trillion.
During that same time oil is close to peaking, fresh water demand has ballooned, waste mountains have
piled up and greenhouse gases have driven changes to our climate. If we continue at that growth rate the
global economy will be US $700 Trillion per annum by 2050 and over US $11,000 Trillion by the end
of this century.
Can we have a global economy 160 times bigger than today?
• The pessimists' view is that we cannot. We will consume and pollute ourselves to a life of
meagre subsistence - "Living in caves and eating moss".
• The optimists' view is that new forms of energy and new technologies will enable us to
continue to grow for ever without limit. "Technology will solve the problem".
The reality is, of course, somewhere between the two.
That 'somewhere' I call ‘GreenCapitalism’. 'Capitalism' because that really is the only economic game in
town. 'Green' because that is the only long term future for us.
This book will help you understand why, when and how GreenCapitalism will impact on you. It will
explain the good and the bad of our current economic model, what impact future economic growth will
have on our planet and what we need to put in place for our economy to become truly sustainable.
The focus of this book is the Australian economy. I have chosen the Australian economy because
Australia is going to find the transition to a sustainable economy more difficult than most other
economies. It is highly dependent upon fossil fuels for its energy usage, giving individual Australians
the biggest carbon footprint of any developed country. Australia is the world’s quarry for so many of
those natural resources that are going to become scarce over the rest of this century. Australia also has a
lot to lose from the destruction of our environment, from the rugged wilderness of Tasmania’s native
forests to the beauty of the Great Barrier Reef
This ebook explains how (relatively!) easy it would be for Australia to transition to a truly sustainable
economy. If Australia can do it, every other country can do it as well.
*********************************************
"there is no need for there to be a 'loser' between economic growth and environmental protection"
I have spent most of my professional life identifying the need for change in organisations then helping
those organisations to make those changes. From turning around insolvent companies and integrating
corporate acquisitions through to culture change programs on factory floors and in sales teams. Like
most people deeply involved in business, my focus was on this quarter's profit, this month's sales, this
week's cash flow. I paid scant regard to what was happening in the rest of the world, especially anything
vaguely environmental.
This started to change when my family flew into Manchester airport in 2000 to join me in the UK. It was
raining. Hardly surprising for Manchester. Over the next few months it continued to rain and there was
more and more discussion on climate change. At the time I dismissed this, along with 'peak oil' and
'global warming', as fear mongering from people who should get a 'proper job'. Then in April 2001, it
was announced that the previous 12 months had been the wettest in the UK since records began. And
records began in the 17
th
Century. That caused me to wonder a wee bit. But only for a bit as I soon went
back to my insular business world and stayed there, even when we returned to Australia to find ourselves
in the middle of the 'hundred year drought'.
Then, in 2003 The Business Council of Australia invited me to join their working group that was
preparing a range of scenarios for Australia in 20 years time. 'Aspire Australia 2025' was put together
over 12 months by running workshops with seventy of the leading thinkers in Australia. We looked at
every aspect of life in Australia. It’s competitiveness, strategic defence, values and norms, it’s
governance and it’s sustainability.
That experience triggered the start of my journey. A journey that was initially focussed on climate
change, for the more that I researched the arguments for and against, the more I came to the conclusion
that this was a 'clear and present threat' to our quality of life. It also quickly became clear that, until the
business community took the risk seriously, then we would always struggle to make the changes needed
to reduce our greenhouse gas emissions. And here was where the nub of the problem was.
Business had great difficulty seeing how they could both, reduce their dependence on fossil fuels and
also maintain the economic growth that is so fundamental to their business success. In the same way that
business saw the 20
th
Century as a battle between labour and capital, many now saw the 21
st
Century as
being a battle between economic growth and environmental protection. Yet, there was no real 'loser' in
the battle between labour and capital, so there is no need for there to be a 'loser' between economic
growth and environmental protection.
Hence my promotion of GreenCapitalism. I write, I speak and I present on how we can have our cake
and eat it too.
For those promoters of environmental protection who are cynical of capitalism, I would ask you to
remember that capitalism has dragged millions of people around the world out of the miserable existence
so well documented by Charles Dickens and that capitalism, properly motivated, can achieve rapid
change in society.
For the promoters of economic growth who see environmentalists as a threat to our prosperity, I would
ask you recognise we live on a planet of finite resources with a delicate ecosystem. The sooner we
modify our business practices to use renewable resources without unnecessarily damaging our
ecosystem, the more confident we can be that our prosperity can continue for our kids and grandkids.
*********************************************
“It is innovation that improves our quality of life, not economic growth per se”
We have an economy for the simple reason that we do not have any choice. Where there is trade there is
an economy. Economic activity by itself keeps people busy but does not achieve that much. What
makes a real difference to our quality of life are the inventions and innovations that economic activity
encourages.
Think back to the first Neanderthal that took a sharpened stone, jammed it into a forked stick and
invented the axe. That bit of innovation was an amazing step forward for them. It would have made
their life a lot easier. That first axe design would have been very popular and we could imagine that,
within a few years, everyone had an axe. People would have been kept very busy making those axes but
no matter how many axes they made, their quality of life would not have improved much beyond that -
until someone came up with a better axe. .
The same applies today. The innovation of the pre paid postage stamp made communicating easier and
improved our quality of life. For the next century and a half many millions of stamps were printed,
licked, stuck on envelopes and posted. Many people were kept busy but, once it was in regular use,
there was little improvement to our ability to communicate until the electric telegraph arrived, followed
by the telex machine, fax and then email.
So it is innovation that improves our quality of life. What economic activity does though is promote
competition. The better axe and the fax machine came about because of competition. The more
economic activity there is, the more competition there is and that then promotes the inventions and
innovations to make our life easier. That is the basic argument in support of globalisation.
Globalisation is simply the relaxing of trade and currency barriers between countries. That maximises
competition which helps to improve the quality of life for everyone.
*********************************************
“GDP makes no distinction between good or bad economic activity”
GDP, or Gross Domestic Product, is the most common figure that is used to measure an economy. GDP
is simply the sum total of all trades for a particular period. The GDP for the whole world for 2009 was
seventy trillion US dollars. That is a 70 with 12 noughts behind it. It is made up of
• Private consumption - eg groceries, fuel, cars, gambling, cigarettes, drugs
• Government expenditure - health, education, traffic accidents, natural disasters
• Private and government investment - houses, factories, roads, power stations, mines
As you can see, it includes ‘good’ economic activity – housing, health, education – and ‘not so good’
economic activity – traffic accidents, drugs, natural disasters. For that reason it is not a particularly good
indicator of the quality of our life but it does give us a fair assessment of the ‘quantity of life’.
It also does not include any area of activity that does not have a dollar value attached to it. So, the
activity carried out by volunteers is not included. All those people delivering meals on wheels, helping
on clean up Australia day, fighting bush fires, are excluded. Because GDP includes activities that
worsen our quality of life (drugs, traffic accidents, wars, natural disasters) and excludes many activities
that improve our quality of life, many people have been critical of it, but, whether we like it or not, we
are stuck with GDP for the time being as the main indicator of our prosperity.
The figure of US$70 Trillion that I quoted before comes from the International Monetary Fund. There
are many organisations that calculate GDP at country, regional and global levels. All of them use
slightly different criteria and arrive at slightly different figures to one another. It does not really matter
which we look at as long as we remain consistent and use the same one every time.
What you do need to understand though is that, when calculating the figure for the world as a whole,
there are two adjustments made to the raw data provided by each country.
The first is an adjustment for inflation. It is important to understand that GDP has nothing to do with
increases in the Consumer Price Index or any other measure of inflation. GDP is calculated having
taken out any element of inflation.
The way that they account for inflation is a little confusing though. Rather then reduce the current
period’s figure for the inflation for that period, they actually go back to all the previous GDP numbers
and increase them by the inflation amount.
!"#$%&'()(
*&+,*-&.*-/0.*+&-,1!*
23
'()(2
45'((6
!"#$724&8!"#$(& 452&
2
The second adjustment they make is to account for distortions in exchange rates. All global GDP figures
are quoted in US dollars, but the exchange rate between each individual country and the US dollar is
often distorted. To allow for this they make a further adjustment called Purchasing Power Parity, or
PPP. This is rather like the ‘shopping basket’ price comparison between supermarkets. They take a
selection of items that make up GDP and compare their prices between countries to identify distortions
in exchange rates.
&+9
2&302&:
30 !"#
2
2
In summary, looking at global GDP numbers can be confusing but as long as you use data from the same
source and using the same criteria then it can give you a very good idea of global economic growth. For
your information, the GDP numbers that I use are those prepared by the International Monetary Fund,
adjusted for Purchasing Power Parity.
Those are the two adjustments that are made when producing global GDP numbers.
For an individual country, their GDP is also adjusted for their imports and exports. The value of
products imported is deducted from the country’s GDP and the value of exports is added to that number.
For example, the price you pay for a plasma TV at the local store will be included in GDP but the import
cost of that TV will be deducted. That way we arrive at a true figure for Gross Domestic Product.
You will also see Gross National Product (GNP) figures being mentioned. This is GDP plus the income
of residents of that country working overseas, less the income earned by foreigners in that country. For
countries such as Australia there is little difference but for many developing countries it can be quite
significant as they often have many residents working overseas and remitting money back to the country.
So GDP gives us an idea of how much economic activity there is in a country or in the world, but, as we
said in the previous chapter, economic activity by itself does not really achieve much. What we need is
ingenuity. So how is that measured?
In economists jargon, ingenuity and innovation is referred to as ‘productivity’. Much as we hear
politicians and the media going on about economic growth every day, it is rare that you hear much talk
about productivity. That is mainly because improving productivity is very difficult to do and so
politicians try to stay clear of it. We will talk more about that in the next chapter. But it is measured.
The measure that is often used to compare the productivity of different countries is the simplest of all
economic calculations. It is total GDP of a country divided by its population, otherwise known as GDP
per Capita or GDP per person.
Because GDP and GDP per person have a number of question marks about their effectiveness in
assessing the quality of life for the citizens of a country, the United Nations have come up with an
alternate measure called the Human Development Index, which, of course, has been reduced to the
acronym HDI.
The HDI index is calculated by taking the GDP per person (productivity) of a country together with life
expectancy at birth and literacy levels. This is an extract comparing GDP per capita with the HDI
ranking for some of the richest and poorest countries from 2008.
The HDI is also a rough and ready calculation on ‘quality of life’ as compared to our ‘standard of
living’. Economists are slowly developing different criteria for assessing a country’s performance on
other than financial returns. However, in a world driven by capitalism, it will be a long time before GDP
is superseded as the main criteria for economic and therefore political success.
*********************************************
! "
“Without population growth and natural resources, Australia’s economy would be stagnant”
There are four principle ways to grow an economy.
The first way is to simply increase population. The more people in a country, the more economic
activity there will be, therefore, GDP will increase. These are Australia’s GDP and Population figures
for the last 5 years:
As you can see, although Australia achieved regular growth in it’s economy, most of that growth has
come courtesy of population increase through immigration. Without those immigrants, Australia’s
growth would have been much lower. That is why most governments love immigration, despite the
political protestations over asylum seekers. It is the best way to avoid recession as Australia did (just!)
following the global financial crisis of 2008.
The second way to grow an economy is to use up its natural resources. Every time Australia digs a new
mine or discovers a new gas field, their economy will grow. They can also cause the economy to grow
by introducing charges where there were no charges before. E.g. if the local council decide to charge
people to use Bondi Beach, that will increase GDP.
The third way is increased investment. If Warren Buffet decides to invest $3 billion into Australia by,
say, building a new hotel, that will increase our GDP. Similarly if Australians stop saving money (or
paying off their mortgage which is effectively the same) and instead, treat themselves to a holiday on the
Gold Coast or buy a new car, that will increase their GDP.
The fourth way of increasing GDP is improving productivity. This takes us back to the need for
ingenuity and innovation to improve our quality of life. This is the most important and the most difficult
for a government to manage. That is why they don’t like talking about it very much. The broadest
measure of productivity is GDP per person. These are the figures for Australia for the last 10 years:
However these are very broad numbers and are influenced by demographics (ratio of the working
population to non working population) average weekly hours worked, how much we sell off our natural
resources, etc.
The Australian Bureau of Statistics uses a more tightly focussed calculation - ‘Multi factor productivity’.
As they say on their website:-
The most comprehensive Australian measure of productivity available is multifactor productivity. It
gauges the efficiency with which inputs are transformed into outputs. In the short term, this reflects the
impact of an array of factors, such as the utilisation of available labour and capital, economies of scale,
and resource reallocation. In the long-term, it represents improvements in ways of doing things
(technical progress), which is the ultimate source of economic growth and higher living standards.
And these are the figures for Australian industry for the ten years to June 2009:
Not a very good set of numbers!
In summary, Australia’s economy has grown over the last decade primarily through increased
immigration and the global demand for the resources that they dig out of the ground. So much for being
a ‘smart country’!
Incidentally, the reason that productivity is seen as being so hard for politicians is that it needs long term
investment in education, industry policy and infrastructure. And we all know how politicians have no
time these days for long term policies. They would rather rely on more immigration and encouraging
the plundering of the planet.
Now we have an understanding of an economy, let us now see how economic activity impacts on our
environment.
*********************************************
#"
“The global economy has doubled over the last 12 years. Is it surprising that the planet is warming
up, the oil is drying up and the waste is piling up?”
For this chapter I have to thank Barney Foran (ex CSIRO Sustainable Ecosystems), Manfred Lenzen and
Christopher Dey (Sydney University). for the work they did for the Australian Commonwealth Scientific
and Research Organisation (CSIRO).
In 2005 Barney and his team produced “Balancing Act: A triple-bottom-line analysis of the Australian
economy” It examined over 130 industry sectors and looked at their impacts on 10 social,
environmental, and financial indicators.
It determined that every $1 of Australian GDP:
• Produces 38c of Gross Operating Surplus
• Generates 16c of export revenue
• Requires 19c of import value
• Requires 1 min, 45 secs of employment
• Pays 34c income to employees
• Produces 21c of government revenue
• Produces 1.02kg of greenhouse gases
• Requires 41.32 litres of fresh water
• Disturbs 3.21 square meters of land and
• Uses 7.65 megajoules of primary energy (that is the equivalent of 2 kilowatt hours of electricity
or half a litre of crude oil)
This excellent report (all 700 pages of it!) demonstrates the connection between economic activity and
our society at large. In particular, it demonstrates the clear link between economic activity and our
environment. Looking at the industry segments individually we see that:
• Forestry and Brown Coal are the biggest producers of greenhouse gases. Forestry producing 97
kgs of greenhouse gases for every $1 of production and brown coal (brown coal is poorer
quality than black coal) producing 27 kgs per dollar. The forestry figure is primary driven by
the destruction of Australia’s native forests.
• Although the average dollars worth of Australian production requires 41 litres of fresh water,
sugar cane requires 1,246 litres, cotton 1,613 and rice requires 8407 litres!
• The greatest disturbers of Australia’s land are, not surprisingly, livestock with beef cattle at 187
square meters and sheep (including wool) at 144 sq meters.
• Energy hungry industries include Alumina and Aluminium at 61 and 45 megajoules per dollar,
respectively and electricity supply at 40 megajoules.
But what of the world? Sadly, Barney has not been given the resources to complete this analysis for the
planet, so we have to look at other data.
First of all, let’s see what global economic growth has been over the last few years.
This is a graph showing global GDP for the last 12 years. Courtesy of the International Monetary Fund
in October 2010. This is calculated in US dollars adjusted for Purchasing Power Parity which, I hope,
you remember from previous chapters.
$%&'&&&()*+$,,
(
)((((
'((((
7((((
;((((
4((((
%((((
$((((
<((((
)66$
)66<
)666
'(((
'(()
'(('
'((7
'((;
'((4
'((%
'(($
'((<
'((6
-
./0%
Over that time the global economy has doubled in size – and remember, this has nothing to do with
inflation, this is a true doubling of economic activity in just 12 years. If that growth had been evenly
distributed throughout the different industry segments, it would mean that, world wide:
• The number of cars on the road doubled
• Loaves of bread made doubled
• Cigarettes sold doubled
• Expenditure on children’s education doubled
• Plasma TVs sold, doubled
• Bicycles doubled
• Car accidents and natural disasters doubled
• etc
So what has been the impact of all that increased activity on our planet? What has been the impact on
our greenhouse gases? What has been the impact on our fresh water supplies? What has been the
impact on our waste mountains? What has been the impact on, arguably, our most valuable resource –
oil?
For answers to these questions, let us go to industry leaders themselves:
First of all, peak oil –
“…world will never be able to increase its output of oil from the
current level” -= 0&=+.
“after 2015 supplies of easy-to-access oil and gas will no longer
keep up with demand.”>?,"
=+.
"The next five years will see us face another crunch – the oil
crunch.”,3?=+.
“the world's production of conventional crude oil may have already
peaked as long ago as 2006”3=+
+-
Then fresh water:-
“Water is the oil of the 21st century”8-/.@
==+.
“Water consumption doubling every 20 years…and is
unsustainable”8"
How about waste?
“One half to three quarters of annual resource inputs to industrial
economies are returned to the environment as wastes within a
year.”8@,
Finally, what about greenhouse gases? They increased by 20% over that 12 years –
“Climate change poses clear, catastrophic threats. We may not
agree on the extent, but we certainly can't afford the risk of
inaction”, 0* =+.
So we have had a booming global economy that has doubled over the last 12 years and that has led us
ever closer to resource shortages, the ballooning of waste and the continued pollution of our atmosphere.
But what of the future? We have doubled over the last 12 years. How quickly will we double again?
This is the International Monetary Funds projection for global GDP to 2015 by which time the global
economy will by US$99 Trillion or some 40% higher than 2009. That growth will add the equivalent of
the resource demands, waste and pollution of 10 Chinese economies over just 5 years.
&$%&'&&&()*+$,,
(
'((((
;((((
%((((
<((((
)(((((
)'((((
'((6 '()( '()) '()' '()7 '(); '()4
-
./0%
The INTERNATIONAL MONETARY FUND do not project beyond 5 years but we can extrapolate.
The compound annual growth rate for the last 15 years has been approximately 5.75%. If we extrapolate
this to 2050 we have:-
&$%&1234256
A
BAAAAA
CAAAAA
DAAAAA
EAAAAA
FAAAAA
GAAAAA
HAAAAA
IAAAAA
'((6
'()'
'()4
'()<
'(')
'(';
'('$
'(7(
'(77
'(7%
'(76
'(;'
'(;4
'(;<
-
./0%
Our current global GDP of US$70 Trillion will balloon to US$700 Trillion by 2050. That is a tenfold
increase in our economy from today’s level within 40 years. What will that do to our oil and other
natural resources? Where will the fresh water come from? What impact will all those greenhouse gases
have on our climate?
And what happens if we project this through to the end of the century?
&$%&1!37!56
(
'((((((
;((((((
%((((((
<((((((
)(((((((
)'((((((
);((((((
'((6
'()%
'('7
'(7(
'(7$
'(;;
'(4)
'(4<
'(%4
'($'
'($6
'(<%
'(67
')((
-
./0%
We have achieved a compound growth rate of approximately 5.75% over the last 15 years. If this
economic growth continues to the end of the century our global economy would be US$11,490 Trillion
– over 160 times larger than it is today.
Clearly an economy that demands 160 times the annual resources we use today and pumping 160 times
our waste and pollution onto our planet cannot happen. The whole ecology of the planet will collapse
well before then as will the global economy itself.
So how do we stop this happening? For that we need to look at the changes we need to make to our
economic model.
*********************************************
7"8
“Our current system of dig out, ship around the world, ship back and throw away will change”
The previous chapter did rather paint a picture of hopelessness and despair, but I am an optimist and
very confident that we will change our thinking and our processes to enable us to continue to grow
without destroying the planet we live on.
As humans we are a remarkably resilient and resourceful species. And we are capable of reacting
rapidly to changing situations and of recovering from difficult situations. The second world war is an
excellent example of our resilience and rapid ability to change.
Within months, the countries on all sides of the war increased their military spending to over 40% of
GDP. That means that they redirected over one third of the resources of their countries into the war
effort. At the end of that conflict both Germany and Japan were economically destroyed yet within 10
years the German economy was bigger than the UK and by 1968, Japan was the second biggest economy
in the world.
So rapid changes to the way we do business can happen quite easily, but what are those changes that are
needed.
I explained in chapter 5 that there were four primary ways of achieving economic growth. The first of
these, increases in population, is becoming to be seen as the instant solution to our problems. ‘Stop
population growth and we can stop worrying about resource shortages, waste and pollution’ or so goes
the claim. This is, of course, ridiculous. Whether we have 6.5 Billion, 9 Billion or 4 Billion people will
make little difference to an economy that is on a trajectory to be 160 times bigger by the end of the
century.
&J
K
L 2"
2&
:
2 8
J
2
The second driver of economic growth is resource usage. This is the area where most change will
happen. Our current system of dig out, ship around the world, ship back and throw away will change.
Instead everything will be recycled. Everything, that is except fossil fuels. These resources are gone
forever, turned into ash, greenhouse gases and particulates. Though fossil fuels that are used to produce
materials for manufacturing – plastics, artificial clothing, carbon fibre, etc – can still be recycled.
2&
@-:
2&
2&-
2+
2
And everything can be recycled. Plastic, steel, timber, clothing. Everything is recyclable, all it takes is
energy, sometimes lots of it. And energy is our biggest hurdle to overcome to enable us to continue to
live a life of limitless economic growth on our planet of limited resources.
We all know that we have been spoilt with the cheap energy that fossil fuels have provided us since the
first coal seams were dug out in Northern England and shipped down to London to be one of the key
triggers of the Industrial Revolution. It is this cheap energy that has enabled us to drag billions of people
around the world out of poverty and degradation. That cheap energy is still there. Though we are
certainly going to run out of oil over the next few decades, there is still gas around and coal as well as
other forms of fossil fuels.
Sadly though, our inability to burn these fuels without producing the greenhouse gases that are
continuing to warm our planet and change our climate means that we have to stop using them.
== "M=="N
2"
2&
=="
2-
:: 2
;
=="
21:
821
2=
2-:
)6<%=.
'
:*=:
)$(( '4:2-
:
Instead we have to turn to renewable energy. No buts. No maybes. It simply has to happen. And there
is nothing to stop it happening. We have the technology now to produce electricity from the sun, the
wind, the waves and from the heat in the core of our planet. Solar farms have been generating electricity
around the world for decades. Wind power and Geo thermal for centuries. Wave generated electricity is
the only one where there is still a degree of development required.
& 2
& :
:
2
We also have the technology for that renewable energy to give us round the clock power. We can now
transmit electricity thousands of kilometers with minimal losses and we have sophisticated computer
systems that can control complex power grids, switching power from where ever it is available to where
ever it is required. We can also store power locally. Solar thermal power plants can store heat to release
energy at night. Battery technology is increasing rapidly to provide short term storage. At the other end
of the power line we are seeing greater and greater efficiency. LED lights that require one tenth the
power of conventional light bulbs. High efficiency motors. Super conductors. The list goes on.
This electricity can then be used as substitution for the heating and transport fuels that we currently use
oil and gas for. Electric cars will replace petrol burners. Electric rail networks will replace diesel
trucks. Bio fuels will be able to provide the fuel for air travel and local truck transport.
So what is missing? What is stopping us from making this transition? That brings us to the third way
that we can increase an economy – investment.
All of this renewable energy needs lots of investment to get it up and running. Once it is established
though, running costs will be minimal. Look at the running costs of using fossil fuels for our energy.
We have to extract the oil, gas and coal from the planet, ship it around the globe, process it, burn it then
work out what to do with all the waste and pollution. Compare this to the running costs for renewable
energy. There is very little apart from a bit of maintenance and watching the sun shine, the wind blow,
the waves and tides to go up and down and the earth to hiss and spit occasionally.
Renewable energy is a fantastic investment – over the long term. Sadly, business, like our current crop
of politicians, too often define ‘long term’ as the next quarter’s result or next week’s opinion poll.
What is needed is the visionary investment mentality that gave Australia the Sydney Harbour Bridge,
America their highway system, France its high speed rail network. None of these would have been
completed had their approval been subject to the corporate investment criteria that is in fashion today.
This will then leave us with the fourth way of expanding our economy – improving productivity.
As the Australian Bureau of Statistics says - “productivity….is the ultimate source of economic growth
and higher living standards.” By focusing on recycling and renewable energy and having a stable
population, all the easy options for governments to grow an economy will no longer be available.
Productivity will take centre stage requiring long term investment strategies, visionary industrial policies
and a commitment to the highest possible educational standards for everyone.
Then we will have a truly sustainable economy with a focus, not on ‘growth for growth’s sake’ but on
economic growth driven by the productivity improvements that are needed to continue to improve our
quality of life.
“Easy for you to say!” I hear. “But how is that going to happen?” That is the next chapter.
*********************************************
9 "
“…there is a disconnect between the short term return demanded by private capital and the long term
pay back for renewable energy.”
To achieve this change only needs two things. It needs political will and it needs money. The former
being somewhat more difficult than the latter.
One of the difficulties of achieving change in a democracy and with a free press is that there is room for
all manner of mischief by those with a vested interest in the status quo. For change to happen our
politicians have to rise above this mischief, set out a clear vision to voters and have the courage to, if
necessary, sacrifice their power and even their seats to start the ball rolling.
Fat chance? Never going to happen? Pigs might fly? Not on your Nelly? Maybe so and it may take
more environmental or economic shocks to spur them into action. But don’t be too dismissive of our
politicians. Most of them do want to make a real difference. But we need to help them. Our current
economic model of dig up, ship out, ship back and throw away, has to change for the benefit of all. We
just need to get the message out to our politicians that this is change that we want and we want it now.
We can all help by talking more and more about the economic unsustainability of our current model.
It will also help if they can see a way that we can implement this change.
A government really only has two ways of implementing change. They can introduce laws to force us to
do something or stop us doing something else or they can change the taxation system to change our
behaviour.
The first is relatively straight forward and easily understood. They could ban plastic bags, enforce
minimum fuel efficiency standards for new vehicles, make manufacturers take back and recycle all
packaging. These have already been done in a number of countries. If they want to be more courageous
they could, say, legislate that all new electronic consumer products must be provided with a parts and
labour guarantee for 10 years. A nice, simple way of slowing down the ‘throw away society’, reducing
electronic waste and promoting local repair and maintenance jobs.
The problem with legislation is that it is cumbersome to introduce and maintain. What is easier is using
taxation to change behaviour.
People underestimate the power of taxation in changing behaviour. Yet there are many examples.
When you visit London you will notice that some of the old buildings have windows that have been
bricked up. Many of these were the result of the ‘window tax’ introduced in 1696 which ran for a
century and a half. The more windows you had, the more tax you paid, therefore many property owners
bricked up their windows to reduce their tax liability. In Australia, you will find that the freeways are
busier in the last few weeks of the tax year as people with company cars drive up and down the roads in
order to clock up the additional distance to qualify for a lower rate of Fringe Benefit Tax. Then, of
course, there is the baby bonus that was introduced by the Australian government which led to an
increase in the birth rate.
Most taxes raised in the developed world come from taxing income in some shape or form. Historically
this is rather odd. In the past, most governments raised income from wealth and resources. Income
taxes, including taxes on profits only became common after the Second World War. A gradual shift in
taxation away from taxes on income to taxes on resources and pollution would be the easiest way of
changing our behaviour. Taxes on pollution would be highly effective in reducing their production.
That is the whole argument behind having a carbon price. The production of other unpleasant gases and
by products could also be taxed. Waste could be taxed at the kerbside or at the tip. Packaging could be
taxed. Container deposit schemes introduced to maximise the recycling of glass bottles, aluminium
cans, etc
Such a change to a taxation system would start to reduce the amount that we pollute the planet. To start
to reduce our usage of natural resources and to promote re cycling would require the taxes currently
raised from mining royalties, etc to be increased. The greater the cost of extracting raw materials, the
more competitive recycling would become.
-MN:
O L
'()'2
2
Such a change to our taxation structure could be done gradually. With the exception of a tax on carbon,
there is no great urgency in reducing our other pollutants or slowing our usage of natural resources.
Individual countries would also need to ensure that their businesses are not too disadvantaged compared
to overseas competitors by looking at import duties and/or export exemptions for a period of time.
This could then give us a world with minimal waste, minimal pollution, maximum recycling and
minimal usage of our finite resources.
But what of energy?
Energy security is, arguably, the most important problem facing Australia today. Their insecurity is
caused by having to rely on foreign governments for their oil (and many of the products that are
produced from oil) and by the damage to their climate being caused by the emissions of greenhouse
gases from the burning of fossil fuels.
A carbon price will help. It will make renewable energy more competitive, but it will not be enough by
itself. The problem, as was explained earlier, is that there is a disconnect between the short term return
demanded by private capital and the long term pay back for renewable energy. Apart from a carbon
price, we need massive, long term, government sponsored investment in renewable energy generation.
But how much?
The answer to this $64,000 question is $370 Billion – give or take a Billion or ten. Work done by
Melbourne University and the Energy Research Institute has calculated that this amount, spent over 10
years would enable Australia to install sufficient renewable power generation, and the transmission and
distribution network required, to deliver 40% more electricity than is needed today. That excess would
then be available to start the electrification of road and rail.
$370 Billion sounds a lot. So let us try to put that into perspective:
• Australia’s total GDP is $1200 Billion a year. Spending $37 Billion each year is some 3% of
GDP. Small change compared to up to 40% of GDP that Australia spent during the last war.
• Australia’s total tax income is some $350 Billion each year. A 10% across the board, tax
increase would fully cover those costs and still leave Australia as one of the lowest taxed
countries in the OECD.
• As an alternative to raising taxes, Australia could borrow the $370 Billion. That would still
leave total government borrowings less than 30% of GDP. Lower levels than most other
developed countries and substantially lower than either the UK or the USA. The debt could
then be repaid from the savings in no longer having to dig up, ship and process all those fossil
fuels, not to mention the high maintenance costs of fossil fuel powered stations.
• Total superannuation savings of Australians are now in excess of $1,000 Billion. The
government could legislate that a percentage of those funds be invested in long term renewable
energy infrastructure.
And remember, this money spent would be an investment. Once renewable electricity generation
replaces fossil fuels we no longer have to dig out the coal, ship it, burn it in complex power stations,
then deal with all the ash, clean and recycle all the water in the cooling towers etc. Then you have the
maintenance of those coal fired power stations. Every few thousand hours they have to have their
boilers cleaned. Every few years they need a complete refit costing millions of dollars. With renewable
energy, we oil the motors, polish the glass, tweak the computers, and have a nice cup of tea!
But what about jobs?
I think even the most one-eyed mischief maker would accept that the new jobs required to implement a
$370 Billion investment program over 10 years would be far greater than those currently employed in
Australia’s existing, fossil fuel based power generation.
The only issue will be, the not insignificant one, of disruption for people working in these current power
stations and coal mines. But Australia, like all other countries, have had many employment transitions
over the decades. In the early part of the last century there was a big move of employment from
agriculture to manufacturing. In the second half of the last century there was then the move from
manufacturing to service industries in most developed countries. These disruptions have affected
millions of workers and have been caused by external factors that governments have been forced to react
to. A transition to renewable energy would be a pro active transition, giving everyone time to adjust and
re train. For an example of a pro active transition you need look no further than the city of Newcastle,
100 miles north of Sydney. Over a 10 year period, the multinational corporation, BHP closed down its
steel factories in this small city. Some 5% of the population was affected, yet, with careful planning, the
transition was remarkably painless and Newcastle has recently been voted one of the top ten cities in the
world to visit by The Lonely Planet Guide!
But?
“But me no buts!”. As we can see in the next chapter, though there is not the same urgency over
reducing our use of natural resources, there is great urgency on moving to renewable energy. Partly for
the environmental benefits but partly for the business benefits. Let us not ‘but’ ourselves to inaction.
*********************************************
:8"
“(China) is the main reason even the purist, neo-liberal capitalists should be yelling and screaming
for rapid change from all sides of politics.”
Living in a world with 100% renewable energy, 100% recycling, minimal pollution and minimal waste
may seem utopian. But the reality is that we will eventually have no choice. Oil will run out as will all
other fossil fuels. Other natural resources will become more and more expensive to extract until they too
will run out. Continual increase in the planet’s temperature will eventually force us to curtail the
production of greenhouse gases.
The issue is, of course, timing. No one knows when the last drop of oil will be extracted or when the
last ounce of gold will be mined. Similarly no one knows precisely when global temperatures will hit
the point of runaway climate change.
There is a vast body of opinion that we need to make those changes right now. The peaking of the oil
price in 2009 to US$ 150 a barrel was seen as a harbinger of things to come. The political instability of
the main oil producing nations is also put forward as a key argument to promote local energy security.
Climate change scientists the world over are saying that we are already too late to stop major changes in
our climate and that our emissions of greenhouse gases should be halted almost immediately.
Environmental organisations are decrying our destruction of rainforests, natural habitats, native flora and
fauna.
But it is not just environmentalists that are clamouring for change sooner rather than later. The
corporate world is demanding certainty over carbon pricing. The major oil producers are moving their
focus into renewable areas. The major consulting firms around the world are running more and more
economic models showing that the later we delay a move to a sustainable economy the more expensive
it will be overall.
Some countries are already leading the way. Particularly China.
The Chinese have two big advantages over most of the developed world when it comes to implementing
change. They take a long term strategic view of the world and their position in it and they are a
dictatorship.
Their long term view on life is best summed up by Chou En-lai, the then Chinese foreign minister, who
when asked by Henry Kissinger whether he thought the French Revolution of 1789 had benefited
humanity replied “It is too soon to tell.”
To the Chinese, the global domination by the British and the Americans over the last couple of centuries
has just been a blip in their global domination over millennia. They see the West stuck in 20
th
Century
thinking, using technologies that have hardly progressed over a century or more and being hamstrung to
act by an uncontrollable media and the vagaries of popularism in our democracies.
In China, they have been building nuclear power stations for decades and they put the waste wherever
they want to. They have taken control of the manufacture of wind turbines and solar panels. They have
implemented environmental taxes on everything from fuel to disposable chop sticks.
People often wonder why China did not support a global carbon price at the Copenhagen talks in 2009.
Why should they? A global carbon price would make renewable energy competitive in the West which
would spur manufacturing, research and development. Best if they leave the West to its infighting. That
allows them to dominate renewable energy and recycling technology, with its dictatorial powers and the
one million Chinese engineers who graduate every year.
And that is the main reason even the purist neo-liberal capitalists should be yelling and screaming for
rapid change from all sides of politics. As the 21
st
century moves on, there will have to be a move from
fossil fuels and quarrying our depleting resources, to renewable energy and advanced recycling
technology.
The sooner business understands that, the sooner we can move from our current 20
th
Century thinking
into the GreenCapitalism mindset that will be needed to prosper in this century.
*********************************************
,);3*3%33
“Runaway Climate Change could lead to a planet that is simply uninhabitable.”
The purpose of the previous chapters has been to explain why and how we need to change our economic
model from one of dig up, ship out, ship back and throw away to one that is focussed on renewable and
recycled resources. In the last couple of chapters, I have then tried to show you when and how it could
be done.
Throughout those chapters, I have showed how this can be done through evolution rather than
revolution. However, there is increasing demand from the scientific community that we need something
more dramatic than an evolutionary change due to the dangers of ‘Runaway Climate Change’.
Runaway Climate Change’ will happen when global temperatures rise sufficiently to trigger positive
feedback mechanisms causing a rapid increase in greenhouse gas concentrations and further heating of
the planet.
So, in this last chapter I would like to explain why we may need a touch of revolution if we want to stop
the worst of climate change.
I want to start with this graph. It was my ‘Aha’ moment.
JTH 17-07 -2001
11
C O P 6bis /SB S TA
<#,=,,,
'>(
?,,
<'>(
#, , 9, , @
A,
,
,
,,
,,
,,
,,
!,,
#,,
7,,
+
,,
'$(
%$)+
B$+
$$,,
+
<
>>
>C
+
'(
I saw this in 2004. It comes from work done in 2001 showing the correlation between carbon dioxide in
the atmosphere and global temperatures over the last 160,000 years and a projection of carbon dioxide
emissions for this Century. To me, it rang a big warning bell for, superficially, it indicated we were
heading for a planet that would, to all intent and purposes, be uninhabitable.
It was this that triggered my own research into global warming and climate change and, in that research,
I discovered three key things:
• The ‘science’ of greenhouse gases increasing global temperatures, is almost 200 years old and
is as rock solid as any science can be.
• The speed of that increase in temperature is more problematic due to other factors and feedback
mechanisms.
• The science of the affect of a warmer planet on our climate and on sea levels is new and still
being developed.
Let’s take these one at a time
The Greenhouse Effect
When I first started researching this, I thought that this was a ‘seventies thing’, along with wide lapels,
afro hairstyles and flared trousers. I was wrong – by about 150 years.
A famous French Mathematician, Joseph Fourier, first calculated that the energy coming from the sun
was not sufficient by itself to warm our planet and that there must be something in the atmosphere that
trapped the sun’s heat. He did this in the 1820s. In the 1870s the Irish physicist, John Tyndall, worked
out that it was only a small number of trace gases that trapped the sun’s heat. Oxygen and Nitrogen,
which make up 99% of our atmosphere, had no effect. It was only Water Vapour, Carbon Dioxide and
Ozone that stopped radiant heat from escaping back into space. (Methane, Nitrous Oxide (laughing gas)
and those same CFCs that destroy our Ozone layer are the other main Greenhouse gases.)
We observe the Greenhouse Effect all time. The Earth and the Moon are the same distance from our
heat source, the sun. Yet the moon is some 30 degrees cooler than the earth. Although there is a small
amount of volcanic influence on the earth, the rest is due to our atmosphere.
Cloudy skies at night give us warmer temperatures. Water vapour in the clouds stops heat from escaping
and slows the cooling of the land below. That is the greenhouse effect in effect – if you will pardon the
pun.
In the 1890s the Swedish scientist, Arrhenius did the first calculation of the impact higher Greenhouse
gases would have on the planet’s temperature. He calculated that a doubling of those gases would
increase global temperatures by about 5 degrees Celsius.
A 5 degree increase may not sound like much, but if the planet were 5 degrees cooler, we would be in
the last ice age.
Over the following century other scientists refined those calculations finally leading up to the United
Nations Intergovernmental Panel on Climate Change that has now given us a range of temperature
increases from 1.5 up to 6.5 degrees dependant upon various factors.
The speed of temperature increase
The level of Greenhouse Gases in our atmosphere is the principle driver of long term temperature
changes (the other is the Earth’s orientation to the Sun, but that doesn’t change very often!) but there are
a few short term drivers of temperature change:
• The activity of the sun, fairly obviously, affects the amount of heat that reaches our planet.
• Ocean currents can move the heat deep into the Ocean or bring it to the surface, affecting the
temperature in the atmosphere.
• Climatic changes in wind and pressure can move the heat around the planet and up and down
the different layers of the atmosphere, affecting temperature readings.
Although the activity of the Sun can be observed and accounted for in global temperature calculations,
the complexity of ocean currents and climatic changes makes it very difficult to assess their short term
effects. These areas will have little effect on temperature changes over the long term but they do cause
short term fluctuations.
As well as these other factors we also have feedback mechanisms. Some negative. Some positive.
Negative feedback mechanisms will offset reductions in greenhouse gases and global warming. The
increased carbon dioxide in the air will promote plant growth. Plants absorb carbon dioxide which will
help to offset that being produced by our burning of fossil fuels. Cloud cover may also provide a
negative feedback by those clouds reflecting the sun’s rays back into space. Positive feedback
mechanisms include:
• Reduced snow and ice cover as the planet warms means that more heat is absorbed by the land,
rather than being reflected back into space.
• Over half of all CO
2
emissions are absorbed by the oceans. As the oceans warm they are able
to absorb less and less CO
2
leaving more in the atmosphere.
• As frozen vegetation thaws, it releases carbon dioxide and methane from the rotting vegetation
that has been trapped there since before the last ice age.
• As the oceans warm there will be greater evaporation increasing the most prevalent greenhouse
gas, water vapour, in the atmosphere.
Those feedback mechanisms have yet to have any major impact. Without them this is how temperatures
have moved over the last century and a half.
This shows a steady increase in temperature over the last century or so. Although there is no denying the
long term trend, no one fully understands the short term fluctuations.
Impact on our climate and on sea levels
Our climate is poorly understood. Forecasting the weather for next week is hard enough. Forecasting
our climate for the next decade is even more problematic. Having said that though, a bit of
commonsense identifies that:
• A warmer planet will cause greater evaporation of water which will cause droughts to start
sooner and last longer.
• That same evaporation will put more water into the air which means, when it does rain, more
will come down leading to greater flooding. In colder climes that water vapour will come
down as snow, leading to heavier snowfalls.
• Increased atmospheric temperatures and increased moisture will increase the energy in the
atmosphere leading to more powerful storms.
As for rising sea levels, again commonsense shows that:
• Water expands as it warms, therefore sea levels will rise as the oceans warm.
• Warmer temperatures will cause ice to melt. Land based ice that melts will raise sea levels.
Thermal expansion will increase sea levels by up to half a meter. Melting of land based ice will add to
this. Luckily it will take many centuries and much higher temperatures to fully melt the biggest
depositaries of land based ice which are in Greenland and the Antarctic. If the Greenland ice sheet fully
melts, it will raise sea levels by some 7 meters. If the Antarctic Ice Sheet melts it will raise sea levels by
some 60 meters. Enough to put every city in Australia underwater – except it’s capital, Canberra!
Droughts, heat waves, bushfires, floods, storms and inundation from the sea will be the result of a
continually warming planet. But how would our planet become uninhabitable?
This is where ‘Runaway Climate Change’ comes in. This is the point where temperatures rise such to
trigger the positive feedbacks mentioned earlier. No one knows precisely what that temperature increase
would be, but current estimates are between 2 and 4 degrees above 19
th
Century temperatures.
If that does happen then, for example, the thawing of frozen vegetation would release carbon dioxide
and methane. (Methane is a far more powerful greenhouse gas than CO
2
.) The increase in Greenhouse
Gases would raise temperatures that would thaw yet more frozen vegetation, which would release more
Methane etc, etc. Once we reach that ‘Tipping Point’ there is little we could do to slow down or reverse
those temperature increases. Even if we stopped burning fossil fuels overnight, the cycle would still
continue as the amount of Greenhouse gases locked up in the frozen tundra of Canada, Europe and
Russia is enough to increase CO
2
levels ten fold or more.
We have spent two centuries discovering the Greenhouse Effect. We have spent five decades knowing
of the dangers. We have spent one decade arguing over what to do about it.
For the sake of our kids and grand kids and for the sake of business certainty and future competitiveness
in the coming GreenCapitalist world we need to act now.
So the message I ask everyone to send to our politicians around the globe is…
(Just Focus and Do It, or Just F*****g Do It – dependant upon the sensitivities of your audience!)
##############################################
This free ebook has been designed to help you get the message out that we need to change our economic
model to one that is truly sustainable. It is available free from every ebook retailer including
Smashwords, Apple, Kindle, Kobo, Sony, etc. Please promote it. Promote it to your family. Promote it
to your friends. Promote it to all your work colleagues. Promote it to your boss. Promote it to your
customers. Promote it to your suppliers. Promote it to your staff. Promote it to your local politicians.
Promote it to your neighbours. In particular, promote it to every climate sceptic you know and every
one who is desperately clinging to the status quo, hoping we can just go on living as we are for ever.
Tag it on Facebook. Review it. Tweet it. Blog it. Share it. Quote it.
Cheers
Keith Mcilroy
mailto:
