Re-energising Australia

2 May 2007

Christine Milne argues that much of the nation’s economic prosperity is a veneer. The three clearest expressions of our economic vulnerability are the inter-related problems of our high greenhouse gas emissions, our looming domestic oil shortage and our ongoing economic dependence on natural resources. It is these three interlinked problems that this paper addresses.

To solve these interconnected problems, federal and state governments will need to develop a wide range of strategies in a coordinated way. Some will be regulatory levers, some will provide economic inducements and some will impose economic penalties; but all will create new economic opportunities. Critics might argue that governments should not intervene but should leave the transition to a low carbon, oilindependent and low resource-use economy to the free market. Government-driven measures are needed because the present distorted marketplace is failing the environment; in Sir Nicholas Stern's ringing indictment 'Climate change presents a unique challenge for economics: it is the greatest and widest-ranging market failure ever seen'.

Throughout the 20th century it was assumed that economic growth could be pursued with little consideration of its environmental consequences, and that any pollution or resource-scarcity challenges would be solved by technological advances or by simply going out and finding more. At the start of the 21st century, climate change and oil depletion have delivered a reality check.

The silver lining of climate change is that it gives us the opportunity to reconsider the way we live. We know that we have to change; we know that we have to rethink the economy so that it operates within the earth’s ecological limits if we are to avoid the collapse of human civilisation. What is less well understood is that this transformation also gives us the opportunity to create enormous economic benefits in sectors hitherto neglected; changes which can make us happier, healthier, and more secure in the knowledge that our children will inherit a world that is a joy to live in. There is an emerging consensus that nations and corporations that fail to understand this imperative will lose competitive advantage; while those that grasp the new opportunities it offers will prosper.

This report details the need for this transformation, the policy options and the strategies to achieve it, and the opportunities such a transformation would create. Refining, costing, choosing between options and implementing these strategies will require significant consultation with stakeholders, all levels of government and the wider community.

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