Economics now driving Climate Action


Why saving the environment and creating social justice is all about creating jobs

 By Greg Johnson, Fremantle-Tangney Greens

The most pressing issue facing the environment today is climate change – or as some refer to it – the climate emergency. Climate change, driven by anthropogenic greenhouse gas emissions, is causing devastating environmental, social, and economic impacts of existential proportions. However, in a neo-liberal dominated political landscape, action to reduce our impact on the environment has been given little economic credence – until now! Sometime in the last 12 months reducing greenhouse gas emissions went from a fringe “green” issue to mainstream economics. And climate change becoming a mainstream economic issue is paramount to there being any real and substantive change.

Economics is an evolving system which imperfectly measures the things we value. Unfortunately many of the these valued things fall outside of the recognised measurement systems. Consequently, they are not factored into significant economic policies, decisions and investments, by either governments or corporations. At the end of the day, corporations spend a lot more money than governments. So, what they spend it on has a much bigger impact on environmental and social outcomes.

As the economic system adjusts to new stimuli which are resulting from climate change, the commentary has shifted to discussing the economic imperatives of decarbonising industry. No longer is it an ideological discussion. In fact, in many cases an investor’s ideology is of secondary importance. The economic imperatives of being part of the greening economy outweigh the inertia to stay with poorer performing fossil fuel investments.

While we may have a federal government which, guided by donors heavily invested in fossil fuel industries, is intellectually in the dark ages, pressure is mounting from traditional mainstream quarters for change to accelerate. Australia is a laggard in this new economic shift. The longer we take to adjust, the less competitive we become internationally. The cost of inaction is becoming more and more apparent, and more and more the topic of mainstream economic discussion.

Deloitte Access Economics recently published a report (A new choice – Australia’s climate for growth, November 2020) outlining the cost of inaction on climate change. The take away from this report was the loss of 880,000 jobs by 2070 from unchecked climate change. This is compared with the creation of 250,000 jobs from choosing a new growth pathway. That is a differential of 1.13 million jobs! 1.13 million jobs is the basis for a strong and vibrant economy which can afford things like social housing, education, universal health care and environmental programs. Furthermore, 1.13 million jobs means fewer people on the social safety net and more people who get better choices on their own social outcomes. So we really need to embrace the new mainstream economics and promote polices which support and encourage investment in the renewables economy.

From a West Australian perspective creating new jobs will initially be in industries like power generation, mining, minerals processing and agriculture, all of which can benefit from a greening of the economy. Of course, the economic multiplier effect will also mean that there will be many jobs in the businesses that support these industries. Ultimately a buoyant economy needs houses, hospitals, infrastructure, etc. and these become an extension of the new green industries.

Mining and mineral processing present major “green” opportunities for WA. As the global demand for green products increases, our endowment of renewable energy sources and the types of minerals required for new green technologies puts us in a strong position. As our industries decarbonise and we expand the onshore production of green variants of minerals and metals such as steel and aluminium, WA will effectively become an exporter of renewable energy. So, we need to partner with industry to assist in the migration from “brown” technologies. It is our responsibility to help shift the green discussion into the mainstream. The COVID-19 pandemic has had a significant and sometimes devastating impact on many families. Many have lost jobs. Naturally, their focus is on their own economic well-being. To gain their support and the support of the mainstream generally, I believe we need to convince these people that we support their economic imperative. And by supporting this, we may just save the world!

Header photo: Solar Installer. Credit: Greens MPs, licensed under Creative Commons CC BY-NC-ND 2.0

[Opinions expressed are those of the author and not official policy of Greens (WA)]