by Ian Dunlop, first published at Pearls and Irritations
The first part of Coal Curse is a masterly dissection of Australian economic history since WW2.
It brings into sharp focus the divide between the protectionist – primary producer and manufacturing – forces of the immediate post-war period and the gradual shift to a neoliberal globalist model which favoured the mining sector. The transition was marked by the Hawke/Keating 1983 decision to float the dollar, and Paul Keating’s “Banana Republic” outburst three years later as commodity prices and the exchange rate fell, illustrating the dangers of an overly rigid economic system being left too late to reinvent itself in a rapidly globalising world.
Luckily, economic expansion in Asia in the 1970s, 80s and 90s provided relief as demand for primary products soared – agriculture as before, but increasingly minerals and fossil fuels, notably coal and most recently gas.The essay documents how the mining industry – minerals and fossil fuels – came together in the 1970s to convince a sceptical polity and community of its value to the nation. Initially through: “—the Australian New Right, a loose network of conservative men – and a few women – in high places, who combined a zeal for free-market economics with opposition to the progressive causes of the 1970s, including land rights and environmentalism.” – working through think tanks such as the Institute of Public Affairs and the Centre for Independent Studies.
The network honed their teeth in opposing indigenous land rights and native title, and gradually accrued political influence as the economic importance of mining exports increased. Then, when the need to address climate change caused by the burning of fossil fuels became obvious in the 1990s, the network swung into action to oppose anything which would constrain growth in fossil fuel use – namely reducing carbon emissions.
From 1996, they found an enthusiastic ally in John Howard.
The long, sorry tale of official climate denialism dating from that time, culminating in today’s climate and energy policy shambles, and the supposed nirvana of a gas-led recovery, is accurately summarised. Judith ends with the pessimistic view that, in regard to serious climate action: “—it will be more business-as-usual than embrace of the new”, but with the hope that, given the pandemic evidence of: “a preparedness to set aside ideology and the protection of vested interests, and behave like adults”, this might change in the interests of our future. “After all, governments are our risk managers of last resort”.
But are they? The escalating risk of burning coal, the real coal curse, is one of the most critical issues determining our future. The first principle of risk management, particularly when the risk is existential as with climate change, is the need for brutal honesty in assessing and acting upon that risk. Otherwise, as we are seeing, proposed solutions are invariably inadequate to deal with the risk and to avoid its consequences.
That requires imagination to understand risk and its implications, and leadership to act accordingly. Further, when the risks are way beyond anything humanity has previously experienced, it also requires statesmanship to throw aside the vested interests who have exerted a stranglehold on Australian incumbent thinking since the start of the Howard era. On all counts, as the essay implies, Australian governments have failed dismally and shown absolutely no preparedness to be risk managers of last resort.
This highlights the dangers of political systems which are hidebound with ideology and short-term politics. The protectionism of the 1960s and 70s created an extremely inward-looking society disconnected from global economic developments, which dampened Australian prosperity, with even the protected manufacturing industry losing its impetus from lack of innovation and productivity.
The globalised neoliberal model from the 1990s obviously brought great benefit in terms of export income, but further undermined the manufacturing base. More importantly, the increasing power of the mining industry, and its remuneration-driven short-termism, blinded both the industry and the polity under its thumb, to the completely new risks of climate change, and the role of coal as a primary cause.
Something not mentioned in the essay is the predatory delay which the industry has used successfully since the 1990s: publicly supporting climate action, but privately doing their utmost to prolong the life of the fossil fuel industry before the shutters finally come down. The latest manifestation is the current fashion to commit to net-zero carbon emissions by 2050, which even coal industry players enthusiastically support.
This target is wholly inadequate if potentially catastrophic climate risks are to be avoided; net-zero must be reached far sooner, as close to 2030 as possible. In reality, net-zero by 2050 is just more predatory delay, kicking the can down the road to gain a few more years of cashflow from a gas and coal-led recovery.
This is important, for what the essay’s economic history tells us is that an economy can grow, hit barriers, collapse, innovate, recover and grow again, as Australia did in the 1980s. However, if an economy persists with rigidities which generate extreme risks, potentially endangering the environment and ecosystems upon which the economy depends, then the collapse may be catastrophic and recovery impossible. That is exactly the position we now face.
Early action is also essential because the global climate system has built-in inertia, so that the impact of increasing carbon emissions today is not seen for years to come; by then it will be too late to avoid bad outcomes. Panic ensues, and all resources then become committed to handling the immediate crisis, with no resilience to take longer-term mitigating action to avoid even worse consequences. In turn this leads to spiralling social collapse, a taste of which we received during the 2019/20 bushfires.
As Judith Brett concludes, all the evidence indeed points to the fact that, despite the pandemic emergency experience, governments will continue to act in lockstep with the coal and gas industries, to squeeze as much as possible out of fossil fuels financially, irrespective of the damage to society. Which is particularly irresponsible when we now have far more economically attractive low-carbon alternatives, and our future lies in innovation around them.
In so doing, governments are abrogating their first responsibility, which is to safeguard the people and their future well-being. So the risk managers of last resort will not be governments, but the community, acting in concert with the non-fossil fuel businesses, finance and investment sectors who now stand to be destroyed if the stranglehold of the fossil fuel industry is not rapidly broken.
“There go the people – I must follow them, for I am their leader”
- Alexandre Auguste Ledru-Rollin