Peter Cosier. A healthy environment and a productive economy

Over the next 12 months, the Commonwealth is going to lead discussion on two major areas of reform: to the roles and responsibilities of the Commonwealth and states in the Australian Federation, and reforms to the Australian taxation system.

At the same time we have an adversarial battle raging across Australia between the environment and the economy.  Despite the significant advances in environmental policy of recent decades – national water reform, land clearing controls, a price on carbon – the public dialogue in recent years has increasingly shifted to a position that we must now sacrifice the environment to pursue a growing economy.

The result is the winding back of water reform; the repeal of the ETS and constant attacks on the renewable energy target; the approval of thousands of coal seam gas bores across the landscape without a proper assessment of their long term cumulative impact on groundwater, prime agricultural land or biodiversity; the Commonwealth seeking to give away their responsibility to protect matters of national environmental significance; and in the recent budget, very significant cuts to environmental programs.

This dramatic, myopic shift in environmental policy flies in the face of science and it flies in the face of good economics because, in the long run, degradation of our natural capital will come at an enormous economic cost to the community and business.

The Federation reforms, tax reforms and the environment-economy debate are seen as separate, when in reality they are fundamentally linked.  They are linked because, in the long run, we can’t have a prosperous society if we continue to pollute our environment and degrade our natural capital.

Whilst there are thousands of examples across Australia every day, where individuals, communities and businesses do strive to live sustainably – water conservation, solar panels, recycling – too often despite our best intentions, the long-term conservation of our natural capital has lost out to short-term commercial benefits.

The consequence is that as a nation, we are taking more from our environment than its natural systems can replenish and that by any definition is unsustainable.

These are huge issues, and if we are to deal with them we need a very different vision for Australia: a practical, forward-looking vision that embraces long term changes to the way we manage Australia.

So how do we bring the economy and the environment together?

The Wentworth Group believe that five interconnected, long-term economic and institutional reforms would create a healthier environment and a more productive economy:

  1. Fixing our reactive land and water use planning systems by putting in place regional scale plans that address the cumulative impacts of development on the environment and the long-term robustness of the economy.

Modernising our planning systems would also make our towns and cities more sustainable in waste management, water efficiency, lowering emissions, improving amenity and reducing risks from natural disasters.

  1. Using markets to finance conservation by removing subsidies that pollute the environment and instead create economic incentives for business and consumers to conserve our natural capital.

We do this by eliminating fossil fuel subsidies; setting a long-term emissions reduction target supported by rational market mechanisms; and introducing an equitable, broad-based land tax to pay farmers, indigenous communities and other landholders to transform the way we manage the Australian landscape.

  1. Conserving natural capital and turning around the systemic decline in biodiversity by closing the gaps in our national system of public and private reserves, connecting these across the landscape, and committing resources to a long-term plan to conserve our endangered native plants, animals and ecosystems.

There is no technical or economic reason why Australia cannot restore viable populations of the vast majority of Australia’s threatened species and ecosystems.

  1. Regionalising the management of Australia’s natural resources so that investment decisions are underpinned by an understanding of how landscapes function.

We are not proposing a fourth tier of government.  What we are advocating is that governments pioneer a new era of managing the Australian environment by working together, and with communities and industries, at a regional scale.

  1. Create environmental accounts: To do any of this we need to put in place regional scale, national environmental accounts that monitor the condition of our environmental assets, so that people can make better-informed decisions to support a healthy and productive Australia.

These are significant reforms.  They are long-term, interconnected and transformational, both in the way we manage the Federation and the way the taxation system interacts with the economy and the environment.

We live in an extraordinary country.  Our natural heritage is truly breathtaking.  Australia is enjoying a remarkable 23 years of uninterrupted economic growth.  There is no reason why the Australia of today cannot grow the economy, create jobs and maintain a healthy environment.

But we have to stop kidding ourselves that the short term decision-making that is pervading our land use decisions today is not having a negative long term impact on our environment and on our economy.

And we’ve got to stop kidding ourselves that the small handful of people who are responsible for managing Australia’s land and water resources have anything like the resources to do it without financial support from the rest of the community.

On several occasions in the past, Australian governments, businesses, communities and individuals have responded creatively and energetically to environmental challenges, with positive outcomes for the health of the environment and economic productivity.  This has to be another such occasion.

Our best chance of success is always when government does these things because our community demands it of them.

People, businesses and civil society need to be active participants in the reforms to Australia’s Federation and taxation system so that we do create a productive economy that conserves our natural capital for the long haul.

If we do, it will take us on a pathway where a healthy environment becomes a natural by-product of a stronger economy – a partner to economic growth, rather than a competitor.

The Wentworth Groups Blueprint for a Healthy Environment and a Productive Economy can be accessed at www.wentworthgroup.org.

 

Peter Cosier, Wentworth Group of Concerned Scientists

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