The battle of the climate change numbers resumes today with the lunchtime release of the long-awaited Treasury modelling on the impact of an emissions trading scheme. ETS opponents are already girding their loins to attack Treasury’s work, but it should provide a welcome reality check for the flow of biased and wholly-unreliable “modelling” predicting economic doom coming from rentseekers.
First cab off the rank for those wanting to undermine the Treasury analysis is the financial crisis. As Ken Henry explained at Estimates last week, since the modelling goes out to 2100, the impact of current events is irrelevant. This led to a splendid Spinal Tap-like moment when Ron Boswell insisted that the modelling wasn’t long-term at all, because an ETS would start in 2010.
BOSWELL: You cannot say that it is going to impact long term. It is going to impact in 2010.
HENRY: Sure, but I am saying that our modelling is long term in its focus. The modelling work that are engaged in… is long term. It is modelling of the long-term economic impact. I am not denying at all there would be a short-term economic impact. I am just saying that our modelling… is focussed very much on the long-term economic impact.
BOSWELL: With respect to you, the impact of this will be felt in 2010.
Mind you, Boswell is presumably working hard at his plan for dealing with global cooling. A snow shovel for every household, perhaps.
The Australian Conservation Foundation and the ACTU made their own contribution to the numbers debate with a joint report called Green Gold Rush, which claims that 500,000 “green-collar” (yes, I hate that term too) jobs could be created in six green industries by 2030.
Having previously complained about the mainstream media failing to look behind the numbers offered in consultants’ reports, consistency requires I make the same lament about coverage of the ACF-ACTU effort, although Lenore Taylor in The Oz gives a flavour of the assumptions. The ACF-ACTU consultant, Cambiar, based its modelling on arbitrarily-selected targets for Australia’s share of “green” industries (renewable energy, energy efficiency, water, biomaterials, waste and recycling, and green buildings) — e.g. reaching 5% of the global renewable energy market by 2030, or establishing seven biorefineries by 2030. Reaching those targets relies on a high carbon price under an ETS a range of government “innovation” programs, targeting of skills and training and tax expenditures.
The economic purist in me bridles at the long list of assistance measures advocated by the report, but in the context of a government willing to commit billions to an unviable local car industry — including for the manufacture of hybrid vehicles — such measures look a whole lot better than programs intended to keep the AMWU and a few Labor strongholds happy.
But however heroic the assumptions underpinning the optimistic scenarios presented in the ACF-ACTU report, even the “business as usual” scenario demonstrates the key point that there are substantial growth prospects in green industries. The report’s BAU scenario assumes an ETS from 2010 and the Government’s Mandatory Renewable Energy Target and nothing more, but still yields over 200,000 additional jobs — the bulk in renewable energy — and a five-fold expansion in those industries by 2030.
Emerging as it does from a cooperative effort between the ACTU and a leading environmental group, the report also short-circuits the traditional assumption that union and environmental interest are mutually exclusive. ACTU head Sharan Burrow has worked out that emissions trading is hardly the jobkiller alleged by industry. It’s a time a few of her colleagues in the union movement made the same connection.