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Learned Academies Put Economics Ahead of Sustainability

By Ian Lowe

Australia’s learned academies have set income increases as the nation’s major priority.

I was recently involved in a discussion about a new report by the Australian Council of Learned Academies. Australia’s Comparative Advantage ( set out to identify Australia’s distinctive strengths and comparative advantages, before suggesting policy settings that could help the nation to thrive. The project was set up by the Chief Scientist in 2012.

The framework for the project was an assessment of Australia’s “environment, biodiversity, location, cultural composition and other distinctive contexts” to enable assessment of strategies to improve “productivity, innovation, fairness and equity”, so I was disappointed to see the approach used increasing average income as the highest priority. Its economic modelling showed that average annual income is likely to rise from $36,000 to $45,000 by 2030, but this could increase to $55,000 with “a major reform package”.

The report accepted a business-as-usual projection that sees the national population increase 40% in the next 20 years. Assuming no significant change in the pattern of consumption as incomes increase, the total human impact on Australia’s environment would increase by about 75% without the proposed major reform, but would more than double if the reforms were implemented.

To put this in context, four national reports on the state of the environment over the past 20 years have all concluded that we are not living sustainably, with serious environmental problems that need to be addressed. Recently a study by the Australian Academy of Science found strong support for a future Australia that is more caring, community-focused and fair. So it is quite surprising that the working group from the learned academies put such an emphasis on crude economic measures of well-being, with little serious consideration of the environmental or social impacts of accelerating growth.

The report does recognise that inequality will undermine social cohesion, but ignores the hard statistical evidence of rapidly increasing inequality in Australia and the political consequences of the resulting feeling of growing discontent. It also recognises that “our quality of life and environment are great legacies we have inherited from future generations,” but fails to consider the impacts of the sort of “major reform package” proposed by economists.

The idea of an ecological footprint, the area of productive land required to fulfil our consumption, has been used to quantify the pressure we put on natural systems. A recent international comparison appeared to provide some good news on that front. Globally, it concluded, the footprint per unit of economic output shrank dramatically in the first decade of this century. While 4.9 m2 of land was used to produce every dollar of wealth in 1999, by 2009 the figure was down to 2.3 m2.

However, when the details of the analysis are examined, it becomes clear that the environmental impact of human society is not shrinking. It is still growing. Basically what has happened since the turn of the century is that the wealth being produced has increased faster than the amount of productive land being used, giving an improved ratio. The overall footprint has been reduced in only four countries: Norway, New Zealand, Japan and the UK.

Australia’s footprint per unit of wealth produced per person was reduced from 3.3 m2 to 1.3 m2. But the GDP per capita almost doubled in that period, while the number of Australians also increased by more than 20%, so the overall environmental impact of Australians got worse.

The same is true globally. In the decade studied the population grew by 13% and the average wealth produced per person also increased by 10%, so the overall impact expanded.

However, the good news is that our impact is no longer increasing as fast as the global economy is growing, as had been the case in the second half of the 20th century. The analysis provided new hope that it could be possible to improve living standards without a proportional increase in the damage we are doing to natural systems. That does require conscious policy choices rather than a naïve approach of embracing globalisation.

Ian Lowe is Emeritus Professor of science, technology and society at Griffith University.