AUGUST 2013 RESTORING THE FOUNDATIONS FOR A BETTER AUSTRALIA

AUGUST 2013 RESTORING THE FOUNDATIONS FOR A BETTER AUSTRALIA

Kathryn McCallum environment economy Rebecca Walton

CONTENTS AN ENVIRONMENT FOR LIFE 1 Environment 1 ENSURE A SAFE CLIMATE FOR THE FUTURE 2 Environment 2 PROTECT OUR NATURAL ENVIRONMENT TO SUSTAIN AND SUPPORT LIFE 3 Environment 3 INVEST IN A SUSTAINABLE FUTURE FOR NORTHERN AUSTRALIA BASED ON THE RIGHTS AND INTERESTS OF INDIGENOUS PEOPLES 4 AN ECONOMY FOR LIFE 7 ECONOMY 1 TAX POLLUTION MORE, AND PRODUCTIVITY LESS 8 ECONOMY 2 INVEST IN SMART, CLEAN INDUSTRIES AND INFRASTRUCTURE 9 ECONOMY 3 A BETTER WORK-LIFE BALANCE AND SUSTAINABLE LIFESTYLES 10 We depend on clean water, air, soil, forests and oceans. This life support system provides us with food, jobs, wealth and the places we love.

People are at the heart of every environmental story. The choices we make affect the natural environment so fundamental to our wellbeing and survival. Bruce Paton

AN ENVIRONMENT FOR LIFE People are at the heart of every environmental story. The choices we make affect the natural environment so fundamental to our wellbeing and survival. Our life support systems healthy rivers, productive soils, clean air, and a safe and stable climate are essential to sustaining our economy and a healthy environment. The threats to our environment are growing and it s not enough for governments to just try to fix the consequences of bad choices made in the past. We also need to change course and confront the underlying causes that drove those past mistakes, and which still reward behavior that damages our environment, undermining the future for our children, and grandchildren. ACF s vision is for a prosperous society where ecological sustainability and human wellbeing are central to decision making by governments, businesses, and local communities. The business as usual approach to economic development in Australia continues to hurt people and our environment: Over allocation of surface and groundwater has degraded our rivers and wetlands; Australia s unique biodiversity and the health of our environment is in decline, reducing our quality of life; Increased congestion and waste is reducing liveability and wellbeing in our cities and towns. We need to learn to live off the interest provided by a healthy environment, not run down the environmental assets of our country. Australians have a track record of innovation and leadership that s been applied to solving environmental problems. We need to build on the best in our country and reward those who invest in protecting and regenerating our environment. WE MUST CHANGE COURSE, BY RETHINKING THE WAY WE MANAGE OUR ECONOMY AND THE ENVIRONMENT ON WHICH IT DEPENDS, TO IMPROVE THE WELLBEING OF PEOPLE AND COMMUNITIES. TO BEGIN CHANGING COURSE WE NEED TO: 1. Ensure a safe climate for the future; 2. Protect our natural environment to sustain and support life; 3. Invest in a sustainable future for northern Australia based on the rights and interests of Indigenous peoples. RESTORING THE FOUNDATIONS 1

Environment 1 ENSURE A SAFE CLIMATE FOR THE FUTURE TESTS FOR REAL PROGRESS Will the policies and programs proposed by our leaders: Ensure greenhouse pollution is falling with the urgency required? Demonstrate international leadership for strong global action on climate change? Increase renewable energy at the scale and urgency needed to achieve pollution-free energy? Remove incentives for fossil fuel use and reinvest the savings for more productive use? Australia needs to do its fair share toward achieving effective global action on climate change. We will pay a heavy price unless we take effective action now. And our children will wonder why we did not act strongly when we had the chance. Australia produces more greenhouse pollution, per person, than any other country in the world. So we need to walk the talk and set firm science-based targets to reduce pollution. Why would other countries act strongly if we don t? This means we need to set long-term legal caps on pollution and shift quickly from a polluting economy, based on burning fossil fuels, to a more efficient clean energy economy. Next steps 1.1 Retain a carbon price, commit to set science based caps on greenhouse pollution in 2014 based on advice from the independent Climate Change Authority, and commit to our equitable share for an effective global agreement to reduce the impacts of climate change. 1.2 Complement the carbon price with a suite of policies that drive reductions in domestic emissions intensity by accelerating renewable energy deployment, increasing energy efficiency and ensure declining pollution from fossil fuel use while the carbon price matures. 1.3 Reform wasteful government incentives to produce and use fossil fuels, and reinvest the savings into a cleaner economy, better community services and a healthier environment. 2 RESTORING THE FOUNDATIONS

Environment 2 PROTECT OUR NATURAL ENVIRONMENT TO SUSTAIN AND SUPPORT LIFE TESTS FOR REAL PROGRESS Will the policies and programs proposed by our leaders: Reverse the decline of our unique biodiversity and the health of our natural environment which sustains and supports life? Protect the special places we love from development and degradation? Restore the natural connections between rivers, floodplains and estuaries? Value the economic and social benefits of a healthy environment and embed these into the heart of decision making by governments and business? Report after scientific report in Australia is revealing how our unique biodiversity, and the health of our natural environment, are in serious decline. The impacts of climate change are now hastening this decline. For our own wellbeing and long term quality of life, we need to turn this around. The good news is that we have the tools to do this. A continent-wide assessment in 2012 on the impacts of climate change on biodiversity by the CSIRO found that our National Reserve System (including National Parks, Indigenous Protected Areas and other private reserves), along with the newly expanded Marine Reserve System can build environmental resilience and help us adapt to some of the impacts of climate change. But we need to connect these special high conservation value places, and invest more in their protection and recovery to make sure our life support systems stay healthy. Next steps 2.1 Connect and expand our national protected areas by working together with Indigenous communities, private land holders and others to build continental scale conservation initiatives. 2.2 Strengthen our national environmental protection laws and improve the effectiveness of their implementation and monitoring. 2.3 Renew Australia s national reform agenda to protect clean water from pollution and over-use. RESTORING THE FOUNDATIONS 3

Environment 3 INVEST IN A SUSTAINABLE FUTURE FOR NORTHERN AUSTRALIA Based on the rights and interests of Indigenous peoples TESTS FOR REAL PROGRESS Will the policies and programs proposed by our leaders: Properly recognise the rights and interests of Indigenous people and support Indigenous groups to manage their land and resources sustainably? Protect and maintain the outstanding natural and cultural values of northern Australia from the Kimberley to Cape York? Provide long term jobs and livelihoods in northern Australia which are compatible with maintaining its outstanding natural and cultural values? Reduce and phase out Australia s participation in the dangerous global nuclear industry? Glenn Campbell/Fairfax 4 RESTORING THE FOUNDATIONS

Australia s tropical north is internationally renowned for its outstanding natural and cultural values. Its unique landscapes support multibillion dollar tourism, fishing, pastoral and conservation (land and sea management) industries. While Indigenous culture and heritage across the north is diverse and strong, Indigenous communities still face severe economic disadvantage. Plans for the north need to recognise the connectedness of Indigenous people to land and water, and to the impacts of unsustainable land uses, invasive species and climate change. To avoid repeating mistakes made in southern Australia, we need to build a shared vision with Indigenous people and map pathways for economic development in the north which are fair and sustainable. Australia also needs to urgently review and withdraw from our role in the global nuclear industry, in the shadow of the ongoing nuclear disaster in Fukushima, fuelled with Australian uranium. Uranium mining in Australia has a history characterised by a pattern of underperformance and non compliance (2003 Senate Inquiry) which creates long term threats to the environment and to people. In the words of a senior Mirarr Traditional Owner speaking against uranium mining on her country in Kakadu none of the promises last, but the problems always do. Next steps 3.1 Invest in a sustainable economic future for northern Australia, guided by the findings of the 2009 Northern Australia Land and Water Taskforce report, and recognising the rights and interests of Indigenous peoples to make decisions regarding their traditional lands. 3.2 Protect the outstanding natural and cultural values of the Kimberley, Cape York and other special places in northern Australia, based on the free, prior, informed consent of Traditional Owners, including to boost investment in Indigenous Protected Areas and the successful Working on Country (Indigenous Rangers) program. 3.3 End plans for new or expanded uranium mining, promote responsible radioactive waste management, and commit to withdraw Australia from the dangerous nuclear industry. none of the promises last, but the problems always do. Mirarr Traditional Owner RESTORING THE FOUNDATIONS 5

A healthy ecology requires a healthy economy, and vice versa. While growth is a fine, universal aspiration, Australia needs to grow better. Leo Farrell

AN ECONOMY FOR LIFE A nation s true prosperity relies not on financial wealth alone, but rather on the degree to which it provides its community, current and future, with the conditions for a good and meaningful life. Prosperity is a fine ambition. Australia can achieve a temporary, fragile sort of prosperity based on unsustainable industries and flawed economic theories that exclude the value of healthy natural systems. Or we can achieve a lasting prosperity based on smart, clean industries and better economic policies. In recent decades, much of our apparent economic growth has come at the cost of environmental assets. According to the Inclusive Wealth Index, despite per capita GDP growth of 2.2 per cent a year from 1990 to 2008, Australia s actual per capita wealth increased by only 0.1 per cent annually. This is because, for every dollar that our GDP per capita increased, we lost nearly a dollar in our stock of natural and ecological resources. And since the IWI does not take account of loss of biodiversity, which is the basic raw material for much innovation and resilience in industries from agriculture to health care, it is arguable that our economy has gone backwards in recent decades. Figure 1: Overall per capita changes in Inclusive Wealth Index, Gross Domestic Product, manufactured, human, and natural capital in Australia, 1990 to 2008 1 CHANGE SINCE 1990 AUSTRALIA 80% 60% 40% 20% 0% 20% 40% 1990 1992 1994 1996 1998 2000 Manufactured capital Gross Domestic Product Human capital Inclusive Wealth Index Natural capital 2002 2004 2006 2008 1. Source for the data is: United Nations Environment Programme & International Human Dimension Programme on Global Environmental Change (2012), Inclusive Wealth Report, Country Profile: Australia (www.ihdp.unu.edu/article/read/iwr-australia The actual graphic is taken from the National Sustainability Council, Sustainable Australia Report 2013, p. 85, www.environment.gov.au/ sustainability/measuring/council.html To re-establish the connection between economy and ecology as the bedrock of a healthy society, Australians should work together to: Tax pollution more, and productivity less Invest in smart, clean industries and infrastructure Measure and invest in wellbeing RESTORING THE FOUNDATIONS 7

Economy 1 TAX POLLUTION MORE, AND PRODUCTIVITY LESS TESTS FOR REAL PROGRESS Will the policies and programs proposed by our leaders: Increase the proportion of government revenue collected from environmental taxes? Reduce fiscal incentives for pollution and resource use? Create systemic fiscal incentives for clean, smart industries? Australia s workers and companies are the building blocks of the nation. They grow, prepare, cook and serve our food. They build our houses and fix our leaky roofs. They put out our fires and care for our children. We rightly seek to encourage these kinds of productive activity. On the other hand, we know that reducing pollution and use of natural resources will be essential to economic success this century. It would be economically more efficient, and fairer, to reduce taxes on productivity, and increase them accordingly on activities that damage the environment. Yet in Australia, taxes on environmentally damaging activities actually fell in the decade to 2011 from 7.9 per cent of the total tax take to 7.3 per cent. In relative terms, Australia s environmental tax levels are now among the lowest in the OECD. Australia grants generous tax breaks for investment in pollution-intensive assets and fuel use, and fuel taxes have fallen in relative terms. These measures are costly and economically inefficient. As a result, even with a carbon price, Australia maintains a net carbon pollution subsidy of around $4 billion, or around $7 per tonne on average. By increasing the relative rate of environmental taxes, Australia would increase industry s incentive to operate sustainably, generating revenue to lower other taxes on people and businesses. Next Steps 1.1 Increase environmental taxes to 10 per cent of total tax revenue (the approximate level among leading OECD nations), while reducing company and income taxes accordingly. 1.2 Phase out current subsidies for fossil fuel-intensive activities. 1.3 Introduce new measures, such as traffic congestion charging, to ensure that environmentally and economically damaging activities are fully priced. 1.4 Extend favourable tax concessions to investments that can help deliver a smart, clean economy. 8 RESTORING THE FOUNDATIONS

Economy 2 INVEST IN SMART, CLEAN INDUSTRIES AND INFRASTRUCTURE TESTS FOR REAL PROGRESS Will the policies and programs proposed by our leaders: Increase public and private investment in clean industries, infrastructure and conservation? Lead to jobs in clean industry sectors? Reduce Australia s reliance on volatile global energy and resources commodities? Deliver meaningful data on the health of natural systems and their interaction with the economy? Global business leaders believe that ecological decline is at least as important a threat to our long-term security and prosperity as any military threat. So imagine if investment in our environment was as well resourced as defence, whose funding target is two per cent of GDP. That s $30 billion per year or $450 billion over the next 15 years for a cleaner economy. Government investment has the potential to generate increased private investment into new industries. Investment in smart industries and infrastructure would generate economic and ecological returns. Likewise, appropriate measurements and scientific assessments are vital for supporting smart investments. Next Steps 2.1 Energy: The Australian Energy Market Operator estimates a capital cost of $219 - $252 billion to shift to 100 per cent renewable energy by 2030, compared with up to $240 billion needed to meet business-as-usual demand. Maintaining and expanding the Clean Energy Finance Corporation would spur private investment. 2.2 Public Transport: Experts estimate that investment of $50 billion to 2030 would halve the access gap for transport and jobs between suburban and urban areas. Another $50 billion would make our freight and rail systems far more effective and sustainable. 2.3 Electric vehicle network: According to estimates, an initial electric vehicle smart grid could be constructed in major Australian cities for as little as $1 billion. Further investment could help every Australian household switch to an electric vehicle. Money better spent than propping up a flagging petrol car industry? 2.4 Biodiversity protection: Greater investment in biodiversity protection would allow the creation of continental-scale protected areas. This helps agriculture, tourism, biomedicine and education to flourish, building social and ecological resilience and improving our quality of life. RESTORING THE FOUNDATIONS 9

Economy 3 A BETTER WORK-LIFE BALANCE AND SUSTAINABLE LIFESTYLES TESTS FOR REAL PROGRESS Will the policies and programs proposed by our leaders: Assist the 21 per cent of over-employed Australians to have a better quality of life? Reflect measures of economic progress that explicitly recognise human and natural capital? For most Australians, quality of life means more than just money. It means having time for family and community. It means access to parks and transport. It means affordable housing. For people in cities, it means short trips to work, clean air and open spaces. For people in regional and remote areas, it means access to jobs, transport and basic services without trashing their local environment. Yet the impetus to increase production at any cost is immense. This leads to over-employment: people working more hours than they want to, even taking into account the reduction in income that working less would entail. In 2007, 21 per cent of Australian workers were over-employed: that is, they wanted to work fewer hours for less pay. Over-employment is an environmental problem as well as a social one. It creates over-demand for a wide range of goods and services, all of which carry an environmental price tag. It also means a less healthy lifestyle, and can put families and communities under stress. Healthier work and consumption patterns mean consuming a bit less, but having time to do more. For workers who can manage it, shifting to a four-day work week means a 20 per cent reduction in income for a 50 per cent increase in time for family, self and community. Reducing pressure on this group could also create greater employment opportunities, with the workload being spread more evenly across the Australian community. 10 RESTORING THE FOUNDATIONS

Matthew Stanton environment economy Martin Wurt

The Australian Conservation Foundation (ACF) stands for ecological sustainability. We get to the heart of environmental problems by tackling the underlying social and economic causes. We work across society to influence urgent, transformative action to deliver lasting change on the scale required to secure a sustainable environment. We bring people together to champion the true value of our environment and its critical role in sustaining all other systems and in achieving human wellbeing. Australian Conservation Foundation @AusConservation habitat magazine for ipad. Search habitat magazine in the App Store. Australian Conservation Foundation Floor One, 60 Leicester Street Carlton, Vic 3053 Phone (03) 9345 1111 Email acf@acfonline.org.au Web www.acfonline.org.au Cover photo Glenn Campbell/Fairfax Printed on 100% post-consumer recycled paper with vegetable based inks by Moule Print, 77 Queens Parade Fitzroy North VIC 3068. Authorised by Don Henry, ACF 60 Leicester Street, Carlton, VIC, 3053