Climate-change action could well lift us from this economic slump.
WHEN the world's environment ministers gather in the Polish city of Poznan next month to discuss the new global climate deal, the Federal Government will announce its long-awaited short-term targets for reducing greenhouse emissions. This will give the world an opportunity to assess the scope of Australia's climate change credentials and ambition.
The latest World Energy Outlook from the conservative International Energy Agency underlines the fundamental choice before the Government: introduce strong targets and policies to help stimulate multitrillion-dollar investments in creating a clean energy system or, in the words of the energy agency, face "catastrophic and irreversible damage to the global climate".
The report warns that the world is on track to increase average temperatures by six degrees above pre-industrial levels by 2100, which is three times the target limit set by governments in Bali last year.
The IEA, which advises its 28 member countries, including Australia, on energy policy, includes some of the world's foremost experts on energy technology and economics. The first paragraph in its report of 570 pages reads: "It is not an exaggeration to claim that the future of human prosperity depends on how successfully we tackle the two central energy challenges facing us today — securing energy security and switching from greenhouse-emitting technologies to clean energy sources. What is needed is nothing short of an energy revolution."
One could be forgiven for having a mental disconnect between these conclusions and the world we are familiar with today. To most of us, electricity supply decisions and structures are far removed from our daily lives except when the bills arrive in the mail.
Outside Australia, a not-so-quiet global energy revolution has already begun. From the solar manufacturing plants in Germany to the wind power stations being built in regional China, new investment is being stimulated and is creating thousands of jobs in the smart, clean-technology industries that will form the basis of energy systems in the years ahead.
Last year alone, about a third of new power generation capacity installed globally was in renewable energy technologies like wind and solar power.
The building blocks of the IEA's energy revolution already exist. While there are technological barriers, what we lack at present is political will. Those who have an interest in protecting the status quo for short-term gain are exploiting this in the climate change debate in Australia.
Some of Australia's heavy emitters have been running misleading and widely exaggerated public campaigns claiming economic Armageddon if the Government takes early and decisive action to reduce greenhouse emissions. Let's be clear, this is "short-termism" in the extreme and given what is at stake for our future prosperity, it is highly irresponsible.
Federal Treasury recently released the most comprehensive assessment of the economic costs of taking action on climate change ever undertaken in Australia.
While transition assistance will be needed in some communities and industries, it confirms that major reductions in emissions are achievable and affordable.
According to Treasurer Wayne Swan there is economically just a whisker of difference between pollution reductions of 5% and the scientifically credible 25% reductions off 2000 levels by 2020.
Similar conclusions can be drawn from the IEA report. About $US5.1 trillion ($A8 trillion) will need to be invested globally in clean-energy generation, and energy efficient appliances and buildings to 2030 to give the world a whisker of a chance of avoiding a dangerous impact on climate. This expenditure, while challenging, amounts to only 0.55% of annual global economic activity and over this period the energy efficiency investments would save the global economy $US5.8 trillion on fuel bills — more than the additional investment cost.
Given the current state of the global economy, there is understandable concern about acting decisively on climate change. However, the IEA has highlighted that we cannot afford to delay. Indeed, these energy investments could be a critical and competitive path out of the global slump. The new jobs, investments and businesses that are created from strong and early action will not only give Australia a competitive advantage over later starters but will avoid the cost of taking drastic action at a later date.
Further delay to appease the polluting industries of the past risks poisoning the economic prosperity of the future. We can redefine our energy future and maybe, just maybe, look our grandchildren in the eye and say we gave them the clean energy legacy and safe climate they rightly deserve.
Erwin Jackson is director of policy and research at the Climate Institute and a member of the Premier's Climate Change Reference Group.