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Apr 26, 2013

Curbing population to cut emissions lazy and damaging

Curbing population growth will reduce Australia's greenhouse emissions but at a profound economic cost -- and it won't decarbonise our emissions-intensive economy. There's a more viable solution.

Advocates of curbing population growth as a means of reining in Australia’s greenhouse emissions ought to be careful what they wish for. They might indeed reduce our emissions, but at significant economic cost, when Australia has already embarked on a process to reduce emissions growth in a way that will have minimal impact on economic growth.

First, yes, our relatively high population growth, both by birth and immigration, is a key driver of Australian emissions growth. And as anti-migration pundit Bob Birrell argued in 2009, high population growth cancels out the ongoing emissions-reduction benefits of energy efficiency. Moreover, immigration to Australia is a net addition to global emissions. Outside oil sheikdoms, Australia has more or less the highest emissions per capita in the world. Anyone who migrates here, unless they’re coming from the US or Canada, is likely to significantly lift their net emissions, especially if they came from a less developed country. The more people who become Australians, the higher global emissions, all things being equal.

So, cut population growth, cut emissions, right?

If climate change were mostly a positive, we wouldn’t be too fussed about curbing emissions. But climate change is already inflicting significant economic damage, and its damage will grow, probably more rapidly than we expect, as the century progresses. Cutting emissions is a tool for managing both our own and coming generations’ economic welfare.

An effective carbon pricing model will deliver significant (80%, compared with 2000 levels) cuts in emissions with minimal economic impact — Treasury estimates the Clean Energy Future package will produce a gross domestic product 2.8% lower in 2050 than business as usual (that is, GDP of $3.56 trillion, not $3.66 trillion), with no impact on employment and annual household consumption growth at 1.1% rather than 1.2%. Moreover, it can relatively easily be scaled up to meet more ambitious reduction targets.

That’s all based on a 2050 population of 36 million.

What are the costs of slamming the brakes on population growth instead? Because of our ageing population, Australia already faces a decline in its annual real GDP growth over the next 40 years from 3.3%, the annual average since 1970, to 2.7%. Again, that’s based on a population of 36 million people. With a smaller population, the decline in real GDP growth will be more rapid as the workforce ages and shrinks and participation falls more rapidly. The tax base will also shrink more quickly with fewer workers, while there’s proportionally greater expenditure per worker in areas like health. It might seem good for those who remain in the workforce, as employers bid for a diminishing pool of labour and drive up wages, but this will in turn feed into costs and drive up inflation.

Low population Australia will thus be grey, low-growth and expensive.

But easier to get to work, right? Curbing population growth will ease pressure on infrastructure in our big cities, yes? In fact, with less tax, and pressure to spend more on health, governments might not even be able to keep current levels of infrastructure investment and might settle for maintaining existing infrastructure over building expensive new networks or expansions of existing ones, particularly given the cost of labour. In fact, the conviction that Australia’s transport infrastructure groans under the weight of too many people is primarily the perspective residents of the east coast capitals. Many regional communities and cities in the smaller states are crying out for more people, not whingeing about how long it takes to get to work.

Reducing population growth to reduce emissions will work, but at a significant and long-lasting — indeed, effectively permanent, given our lifespans — cost to Australia. It would be a variant on the current European approach to curbing emissions — plunging the economy into a depression — only it would take longer to reverse. And unlike a carbon price, cutting population growth would be a blunt tool, with changes in immigration levels harder to scale up to meet more ambitious emissions reduction targets.

More to the point, it wouldn’t curb emissions for the right reasons. It would remove the need to undertake the necessary decarbonisation of the Australian economy, to bring us back to per capita carbon emissions levels comparable with other industrial countries, rather than being the world leader we are. Australia would remain a high-emissions economy hiding behind slower population growth. It’s the lazy option.

A strong immigration program has been a key part of Australia’s economic, civil and social success. In September, it’s likely that for the second election in a row, two immigrants will vie for the prime ministership. Strong immigration has helped deliver us one of the strongest economies in the world, and provided a home for millions of people from around the world who have sought a better life. It can continue to do that into a low-carbon future.

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50 thoughts on “Curbing population to cut emissions lazy and damaging

  1. Mark out West

    HI Bernard

    Let’ Think out the square, how about the underemployed?

    How about mandatory car pooling, pulling two thirds of the cars off the road and no need for those expensive upgrades. Truckies happy and people will have on average $5,000 dollars extra to spend. A spend boost for the economy.
    Pollies would now have to spend money on education and infrastructure to boost productivity.

    Maybe even a GREAT public transport system so even more people won’t need a car and the poor won’t be disadvantage due to their no so horrendous social isolation at the edges of the city fringe.

    Population growth and the housing industry are the lazy mans answer to everything, was the article sponsored by the ANZ, CBA, or Jennings??

  2. prembrowne

    Bernard, it looks like you’ve done your homework and I’m sure you’re right in many ways, but… where will population growth end? I understand you’re only looking at Australia, but from a global perspective, surely there must be a threshold for how many people the planet can sustain comfortably. You’re talking about gross domestic product and employment rates in 2050 – I’m talking about 100, 200, 500 years in the future. As a global community, shouldn’t population growth – and resource consumption – be something we are talking about more, and planning for?

  3. Matt Moran

    Actually Bernard, stable populations have a far better track record for a balanced economy with better population to resource ratios and better worker to dependency ratio. I wonder what audience you’re writing this for? Our GDP may be increasing (because we have a warped system which rolls up the costs of population growth into it – want to grow your GDP, just keep populating – private contracts funded by the taxpayer will make it all look rosy).

    I wonder how much longer do you think we can continue with an infrastructure bill of anywhere between 75 and 150 billion a year which we are primarily paying for by selling off our finite assets including our prime farmland.

    What about future generations? What resources will we leave them with? Why must our wildlife be forever shoved aside to blindly follow an uneconomic policy which is failing drastically.

    If you actually properly costed population growth, you’d actually realise how silly your article is.

    All you’re doing is fueling ruin for Australia and it’s people by allowing continued manipulation of the labor market and ensuring development and mining continue to run our “economy” into the ground. But what’s happening should be of interest to you – it’s not working any more. Your workers are also your customers – if you’re driving up the cost of living through population growth – they have less disposable income as wages never keep pace. If you’re driving up the unemployment queue faster than you’re creating real jobs, you’re driving up your costs.

    Here’s a note that makes your argument even further nonsensical. Japan pushed their population up aggressively from 60 million to over 130 million. They crammed their people into trains like sardines (as we are doing) and increasingly are struggling to meet resource needs. Japan invaded China for resources and tensions remain high – not good. They built Nuclear power plants in the wake of Tsunamis – the costs are still being counted. But they have at last turned the corner on population growth. And look what’s happening. No need for costly infrastructure expansions. More affordable housing. A better worker to dependency ratio. More participation in the workforce. Above all, they are happier.

    So my dear Bernard. Endless population growth has no future, none. It makes people miserable, it wipes out wildlife, poisons the environment, spreads resources ever more thinly. My question for you is, what do you have against people being happier, protecting wildlife and the environment?

    In relation to aging, are you aware that we are spending 30 times more in growing our population to offset the fact that we’re happily living longer than the ageing demographic is costing? Further, what about our young? Where are their opportunities? Aren’t they after all our true dependents. Yet we are decreasingly unable to provide opportunities for them. They are increasingly in competition for low-skilled jobs where they get a foothold into he workforce.

    Time to get a grip Bernard.

  4. wilful

    This is incredibly lazy thinking. It boils down to an argument that we must keep on growing, forever. There’s no suggestion in teh article that we get to stop growing at 36M, because the arguments that Keane applies at 23M still apply then.

    I don’t know why so many otherwise sensible people can’t get this simple fact. Kenneth Boulding’s quote, anyone that believes in infinite growth in a finite world is a madman or an economist, remains apposite.

  5. Mike Flanagan

    Yes Matt, both you and Bernard have some intersting and emotive points.But the political impracticality of selling a bedroom tax is obvious, in a democracy. The murdoch redtops and broadshits would have a field day with salacious headlines and leaders.
    Perhaps we would have to introdusce a ‘cap and trade’ market mechanism into our sexual activities.
    The mind bogles, as to how the tax departmrent might enforce a Wickenby style enforcement regime, or the tax consultants plans for its’ evasion.
    The story is a furphy. Our immediate and forthcoming problem is the redistribution of populations around the globe, created by the impacts of Climate Change.

  6. Microseris

    I expected Crikey to consider both sides to an issue, but instead we get MSM fluff. Growth, both population and economic is a ponzi scheme which is going to end in tears.

    Aside from increasing carbon emissions, not a single mention of other environmental costs of our third world level population growth. Deteriorating environment, mass extinction of our fauna, urban sprawl, more competitive for scarce water resources, future agricultural production with climate change and peak oil starting to bite, etc.

    The following is a world comparison in terms of growth:

    World 2008–09 1.6%
    Least developed countries 2008–09 1.8%
    Most developed countries 2008–09 0.4%
    Europe and the New Independent States 2008–09 0.3%
    North America 2008–09 0.9%
    ESCAP region* 2008–09 1.0%
    Indonesia 2008–09 1.1%
    Australia 2008–09 2.1%

    Anyone who pumps up the tyres of population growth without consideration of the carrying capacity of the land not just now but into the future is a fool. It is this fluff coverage which is lazy and damaging.

  7. Tabitha

    Matt Moran for PM!

  8. Tabitha

    And by the way Bernard, you need to read ‘Overloading Australia’ by Mark O’Connor and William Lines.

  9. Achmed

    Abbott is all for increasing immigration. His comment that the number of 457 visas should be increased because most become citizens,

  10. Stephen

    Bernard’s got the perfect answer for indefinite growth on an Australian continent with infinite resources in habitat and biodiversity.

    Unfortunately, Bernard, the continent we’ve got is the driest, has the worst soils, is past its carrying capacity, has an appalling extinction record, and has iconic species on the managed extinction track right now.

    This article is essentially running the magic-pudding argument that endless economic growth will generate bigger and better opportunities for greenhouse abatement.

    Agree with Tabitha, read O’Connor and Lines, and have another go when you have some faint idea what you’re talking about. The Treasury forecasts in the Clean Energy package are just a fairy story for the young at heart.

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