Population curbs not the answer to emissions cuts

Crikey

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 per cent, 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 per cent 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 per cent rather than 1.2 per cent. 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 per cent, the annual average since 1970, to 2.7 per cent. 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.

This article was originally published by Crikey on April 26. Republished with permission.