Australia / From the Founder
Climate change: rising urgency

What information do you want to see from IBISWorld on COVID-19? We'd love to hear from you

by Phil Ruthven AM, Founder IBISWorld
Jan 28 2020

Climate change, or global warming, has polarised societies in recent decades. A vast majority have become concerned and fearful. The impassioned plea of 11,000 scientists in November last year, predicting more dire warming and ecological damage than previously forecast, has increased those concerns. The fear has grown with a more comprehensive coverage of associated disasters. This greater media exposure, however, can distort the actual frequency of some disasters over long periods of time.

The frequency of most natural disasters—earthquakes, volcano eruptions, landslides and avalanches—hasn’t changed in decades.

But storms, hurricanes, ice melts, temperature rises, bushfires and droughts have been on the rise.

In Australia, the devastating bushfires in New South Wales, Queensland and Victoria over the past two months have brought back memories of Victoria’s Black Saturday bushfires in February 2009, nearly 11 years ago, when there were 173 fatalities, 414 injuries, 3,500+ buildings (over half being houses) burnt down, and a damage bill close to $5 billion.

The economic cost of the current drought to farmers and dependent rural businesses in New South Wales and other states—but not to the population at large—is debilitating to those on the receiving end of the drought.

Australia’s three worst drought periods on record are said to be: the 1895-1903 drought (8 years); the 1958-68 drought (10 years); and the Millennium Drought, 1997-2010 (over a decade).

The 1890s drought came at a time when agriculture normally contributed between 20-25% of the nation’s GDP, so that drought added to the 1890s Depression, which had begun in 1890 and was the longest and worst depression in our history. By the 1960s, agriculture had shrunk to 10% of the nation’s GDP, so the drought did relatively less damage, with no depression and only one year of recession (not due to the drought, however).

The Millennium Drought came at a time when agriculture had shrunk further to 3% of our GDP, so the impact of that drought on the overall economy was negligible. And no resultant recession occurred, let alone a depression. The GFC in 2008 did far more damage.

The current drought and bushfires, while regional-specific, are again unlikely to make any sizeable dent in our already-slow economic growth. But there is wide-felt compassion for the life, health and financial losses of the victims.

Scientists are of one voice that we humans are the main culprits, although some in the business and government sectors disagree—perhaps for reasons of self-interest, or due to personal convictions.

That said, there are few that dispute a target of cleaning up our planet—to address pollution, ecological damage and other bad habits, such as excessive waste. Moreover, there’s a universal acceptance that we must move towards renewable energy, including wind, hydro, solar and tidal. There’s also a slow but growing acceptance of non-polluting energy—nuclear and mini-nuclear, and maybe, one day, fusion energy—particularly if it can be done without too great an impost on cost.

The polarisation of opinions has intensified to something of a class war among believers (including the extreme ‘extinction’ prophets) and the agnostics, or don’t-cares.

In the meantime, let’s look at what progress is being made on renewable energy. Nowhere near enough, as the chart below suggests, and it’s too slow for many of us, especially younger generations.

World Primary Energy Demand

However, there are bright spots. For example, there’s the rapid growth of electric vehicles, hopefully using increasing amounts of renewable energy electricity, rather than petroleum.

A renewed interest in mini-nuclear generation (as we see in new-age submarine units) is also encouraging. It is ironic that nuclear energy, despite the three disasters (Three Mile Island in the USA in 1979, Chernobyl in Ukraine in 1986, and Fukushima in Japan in 2011), doesn’t deserve the bad rap it gets. Chernobyl, with 42 deaths—and a probable eventual total of as many as 4,000—has been most shocking. Fukushima could end up with fewer than 600 deaths, while Three Mile Island has, as yet, no attributed deaths.

Those deaths probably make nuclear energy the safest energy ever used in terms of deaths per million megawatts of energy produced. Ironically, our first energy source, wood, may have been the most dangerous! Facts usually destroy a good story, in this case the exaggerated danger of nuclear energy.

Increased efficiency and cost-reduction in renewable energy is contributing to an evolution/revolution in energy production. This includes solar energy becoming highly popular with homes and business premises.

All the above, and perhaps an acceptance of medium-term price rises, could augur well for the planet and the growing number of worried inhabitants.

Many remain very worried about the current status and pace of change. We need to plan for life on a warmer planet—with rising sea levels—if we fail to make changes fast enough. Then again, if there are other reasons that are causing these changes as well as—or instead of—human activity, then it would be prudent to work out how to live in the climate-changed world anyway.

But the need to make our planet cleaner and safer should not be in question. It is tragic that across the world, political leaders are so short-term/election-cycle oriented—often in blatant denial of any energy problem—and are resorting to populism, rather than rationality. The planet and its 7.8 billion inhabits need more rationality, vision, better strategies and more courage from political leaders.