WHILE many Tasmanians fear for their jobs, some businesses are flat out. Nuenergy worked out how to get the cost of a 1KW grid-connected system to below the $8000 commonwealth rebate and the renewable energy credits and now, in a deal that is almost too good to be true, they will put solar energy on your roof for no more than the time-value of the $2500 deposit. Not surprisingly their staff and call centre are swamped with enquiries and people signing up. This is the green-collar jobs boom … when the price is right the jobs are there.

Clearly there will be pressure to reduce the photovoltaic rebate in the next budget, but in the mean time it has clearly been a success, encouraging innovation in reducing costs, creating job and reducing carbon emissions.

Kevin Rudd’s Monday revisions of the emissions trading scheme (ETS) are stealing the thunder of trading scheme opponents, and so they should. By adopting the suggestions of business, pundits and environmental lobby groups there is little excuse for the Greens or the Liberals to oppose the measure. That is not to say they won’t, the Opposition appears to believe that their job is to oppose, even when they’ve won the argument on issues like delaying the implementation a year, and the Greens still seem to believe that consensus is only built on other people changing their opinions.

Compromises are never clean, and never give everybody what they want. Compromise is the price of parliamentary democracy.

Turnbull would be a fool to oppose the ETS scheme. Instead, he should declare victory – constructive opposition and forced bipartisanship has made a better system. Labor has a mandate to introduce an emissions trading scheme, and by agreeing to the delay they have removed any standing for the Liberals to oppose it. While Australians would prefer not to go back to the polls, a double-dissolution to overcome a dysfunctional senate would make a compelling argument. In a crisis, a government must be able to lead.

The delay is a good move, but only if the legislation is passed now. Imposing a cost on communities and businesses when they have no time to adjust achieves nothing. Delaying the legislation simply continues uncertainty, and it is uncertainty that is stopping businesses and households investing. To pass the legislation, and provide clear signals on the costs that will be imposed, will incentivize business to get on with the job of making changes before they are hit with the financial consequences in 18 months’ time. The ten dollar a ton dry run in 2010 then gives businesses a fair go at getting systems in place.

The global financial crisis has created a bit of breathing space for the environment, without structural changes to our energy infrastructure, economic growth means emissions growth. An economic slow-down will reduce emissions growth. Businesses will also claim that the GFC has reduced their capacity to invest, but this is only partially true, because it is businesses reluctance to invest that is creating the global recession.

There are two major sources of jobs from introducing an emissions trading scheme. In the short run there are the well-paying white-collar jobs advising businesses on compliance and developing compliance systems. We can’t all be employed rebuilding council toilet blocks or new highways. It is estimated that $4.3 billion was spent on the GST introduction and $12 billion on getting ready for Y2K. Based on ABS input-output tables was can estimate that for every $1 million spent in the business services sector, there are 10 to 16 jobs.

So if the ETS compliance costs businesses $2 billion, that’s 25,000 jobs. Businesses may complain but after the Pacific Brands fiasco, where management greed simultaneously destroyed jobs and shareholder wealth, there should be no sympathy. Remember, when businesses don’t want to spend money they call it a cost, when they do it, they call it an investment.  An emissions trading scheme is an investment in avoiding cyclones over Sydney and malaria in Brisbane. The generosity of Australians in accelerating the reduction timetable will determine whether we save the Barrier Reef.*

The second source of jobs is real investment in changing over energy systems from a capital stock built when carbon was free to one that maximizes value from each ton emitted into the atmosphere. This process destroys one form of wealth … old smoky capital and replaces it with greener technology. The process is inherently job creating, but of course the old capitalist will fight it to the bitter end. Remember that recessions are caused by a lack of demand, by deciding that now is the time to replace the old capital stock there is a clear signal to invest.

The old capitalists, currently represented by lobbyists for the mining and coal industry are claiming that introducing an ETS will stop investment. The problem is that the sorts of investments they are talking about are inherently unsustainable. If they can’t generate enough wealth or gross operating surplus to cover the cost of buying permits then they have no place in the 21st century. The wealth they generate today does not cover the cost of global warming tomorrow. There will still be heavy industrial development, but those projects that go ahead are those that do generate enough wealth to justify their carbon footprint. The fittest will survive.

In Australia a key changeover will be in the energy sector. In the short-run the best way to reduce carbon emissions at low cost is to replace coal with gas. Gas from the coal seam methane discoveries in the coal basins of Queensland and New South Wales can replace the brown coal of Victoria, and later black coal. This involves massive investments in pipeline infrastructure, pumps and wells that will create jobs of every collared hue. At $900 per kilowatt, as paid for the Tamar Valley Power Station, replacing Australia’s 30000 MW of coal electricity infrastructure over the next two decades would require an investment of $27 billion in generation plant and create over 250 thousand jobs.  This is not to mention the thousands of jobs created in pipelines, insulation installation, carbon capture and storage and a myriad of other opportunities.

In the longer run there will be the opportunities in geothermal, solar thermal, photovoltaic, and other renewable such as wave and small tidal.

There will also be the nuclear question. As most of the radiation exposure comes from the mining process, only a fool would mine uranium and not generate energy from it. Australia may be rich in fossil fools, but are we rich in uranium fools as well?

Not mining uranium is not a serious option if we are focused on stopping climate change. A key bargaining chip that Australia should bring to driving a global climate bargain is increased access to its uranium resources, in concert with renewed US leadership on global nonproliferation and disarmament. France’s nuclear dominated energy sector has shown that you can run a western economy without dependence on fossil fuels. Access to the nuclear energy option means that signing on to a global agreement does not mean signing away membership of the rich nations club, so while renewable energy is looking increasingly more cost effective, even doubters have no excuse.

A clear signal that not just Australia but the entire world is embracing a carbon constrained future will support significant new investment in Australian exports. Clearly many environmentalists oppose expansion of uranium mining or exporting LNG from the Browse Basin and the Kimberley, but these resources, on top of Australia’s immense solar potential, means that we are not dependent on old king coal for our supper.  Supporting cleaner export industries is a key reason to getting the legislation in place quickly to support getting a global deal at Copenhagen. Globally there is recognition that the global recession creates an opportunity for supporting green investment that will create jobs and make the next phase of economic growth more sustainable.

If we’re concerned about jobs there is no excuse for not passing the emissions trading legislation.

 

 

 

A lighter note on the importance of delay for emissions adjustment ...

 

 

 

 

 


*  Well actually we’ll also require a global agreement to save the world, but let’s start by developing a compelling offer for the average Australian.  We can bet that the Chinese are thinking about the dying Yellow river and typhoons over Shanghai.

Cows will now be able to work hard to change their reproductive strategies and be producing zero-carbon calves in 2011 – clearly impossible in the previous nine month timeframe.  Similarly, eighteen months should be enough time to completely reverse the population-growth simulation of the baby bonus, whereas turning back the clock on some of the babies already expected by the original proposed start date is an unfair burden on committed prospective parents, who would simply be whacked with a punitive carbon tax on their pre-ordered sprogs.

ALEX WADSLEY

  There are two major sources of jobs from introducing an emissions trading scheme. In the short run there are the well-paying white-collar jobs advising businesses on compliance and developing compliance systems. We can’t all be employed rebuilding council toilet blocks or new highways. It is estimated that $4.3 billion was spent on the GST introduction and $12 billion on getting ready for Y2K. Based on ABS input-output tables was can estimate that for every $1 million spent in the business services sector, there are 10 to 16 jobs.