A friend of mine Chris Trafford sent me an article in late August and wanted me to share my opinion (sorry it has taken so long!). The article is titled ‘Neoliberalism Poisoned Climate Action and Renewables are the Antidote’.
It’s a bit of a long article and if you don’t read it for yourself its main point is that the efforts to solve climate change through markets has not only failed but also led to divisive jobs versus the environment debates. The authors say renewables are the solution because they are easier to relate to. They are tangible, create jobs (not just for bankers) and provide opportunities for local community to benefit.
What will more renewables mean? Will this work?
On the first question, the obvious one is that it means government intervention. To get from where we are today with renewables around 5% of energy produced in New South Wales (the State the city of Sydney is in) to where the Government hopes to be in 2020-21, renewable energy output will need to double. And, while the Government chart below has large market driven contributions, make no mistake the Government is intervening. By setting targets, creating investment certainty, leading by example and attracting investment into renewables they are not sitting idly.
The second implication I will mention is that it will lead to economic activity and job creation. The reason I mention this is that I believe that the jobs vs climate debate is a furphy. The simple reason is that economy is a system. It grows, it shrinks, it adjusts, it reallocates and there are changes all within a set of boundaries.
As obvious as it is that building renewable energy capacity will create construction jobs, operating jobs, servicing jobs and so on, these jobs will need people to fill them. These jobs can only be filled by new workers, the unemployed, people from existing jobs or from overseas. If we are talking about the near term, the unemployed have not had time to get the appropriate skills and new workers, or population growth, is not relevant.
If these new jobs are ‘better’ then people will leave their existing jobs and with no other labour, except from overseas, other parts of the economy have less workers and have to slow, shrink or become more productive (if you get them from overseas, economies elsewhere do the shrinking or slowing). In other words some jobs were lost. No different to the situation with a price on carbon. Jobs will be lost but other jobs created.
There are two sides the change coin. From an efficiency point of view if the jobs are paying more and the employer is run for profit then the economy as a whole will be better off. From a social perspective there is less risk that people will be out of a job but more risk that employers will be without workers. In the carbon price situation the adjustment can be more jarring for workers and the hope is that people are prepared so that they are flexible enough to find a new job when the change comes.
To the question of will this work? In short possibly. Einstein’s oft quoted saying about doing it the same way over and over and expecting the same result makes some sense here. Why not try something different. If you can not convince people one way, why not try another. At the end of the day we live in a democracy and so the people ultimately decide, which gets me back to the title of this blog.
If a price on carbon was all too much to understand with all the econobabble jargon (word coined by Richard Denniss), maybe a form of Government intervention based on leadership and advocacy will succeed. So while the Government is still picking winners they may be onto a winner (if you believe climate change is worth addressing!).