The Clean Industrial Revolution

The problem with cutting greenhouse gas emissions is that it will harm economic growth. Right? No, quite the opposite, says Ben McNeil in his book The Clean Industrial Revolution. It’s an age-old myth that doing good for the environment is bad for the economy. He’s addressing Australians, but what he has to say will arrest readers from many countries. It has certainly grabbed the attention of some prominent New Zealand businessmen who have presented every MP with a copy of the book and used it to back a call to the Prime Minister for a joint business/government task-force to focus attention on emerging clean technologies.

McNeil is a senior research fellow at the Climate Change Research Centre at the University of New South Wales. Besides a PhD in climate science he also holds a Master of Economics degree.  The two worlds are bridged in this energetic book.  Australia is very vulnerable to climate change through sea-level rise, rainfall changes, storms, and a decrease in food production. It is also highly carbon-intensive in its economy and its export industries will suffer as a consequence when the world starts to move heavily to reduce carbon emissions and impose carbon tariffs.

Such consequences can be pre-empted by a clean-energy revolution, one for which Australia is well-endowed. That hot arid interior is the potential source of vast quantities of high capacity solar power. The use of mirrors to concentrate sunlight so perfectly that the ultra-high temperatures convert water to steam is one way. Another, already under construction in north-west Victoria, uses mirrors to concentrate the sunlight on to high-performance photovoltaic panels. Solar power could replace the need for coal-fired power stations. A massive underground “hot rock” heat source can be tapped to create steam for power generation, a technique already being worked on by a number of companies at several sites throughout Australia. Wind power in the south could supply 20 percent of the country’s needs. Advanced biofuels that do not impact on food can be produced.  Biomass-fuelled electricity is already generated in some parts of rural Australia. Carbon capture and storage may hold some hope for the continuing use of coal, though not while coal companies put a miserly 0.3 percent of their production value into research, apparently believing that governments will do the work for them.

McNeil argues that Australia must take up a forefront position in the low-carbon economic future if it wants to remain prosperous. At the time of writing in 2009 he expected the emissions trading scheme to kick in, putting a price on carbon and pointing the economy towards investment in clean energy. This has been delayed, but even without it there is ample reason for the change of focus away from the carbon-intensive economy (carbon obesity he calls it).  The world will soon be crying out for clean energy technology.  Australia will continue to prosper in the future if it has used research and development to drive down the cost of renewable energy technologies, and investment to commercialise them and prepare them for export.

McNeil illustrates this with a striking imaginary scenario. A series of climate catastrophes hit the world in the 2020s. Global greenhouse gas sanctions quickly followed. Those nations with expanses of desert which had been working on the development of solar power became the energy superpowers of the 21st century. Australia led in the building of the Asia Pacific Electricity Grid following a breakthrough in transport efficiency for transmission cables discovered by Australian researchers. The grid connected Australian energy supply to its Asian neighbours.  The scenario is much more elaborated than this, but it all certainly sounded feasible.

Back to present reality. McNeil is adamant that there are solid employment opportunities in an economy focused on clean energy. More than offered by the present carbon intensive economy, and jobs which can’t be outsourced. Creating energy-efficient homes and buildings, for example, is a proven source of increased jobs. The European Commission suggests that energy efficiency creates three to four times the level of employment as an equivalent investment in a new coal-fired power station. Renewable energy requires two or three times more people for operation than an equivalent coal-based energy project. A comparison between Denmark’s wind industry and New South Wales coal industry clinches that. A renewables manufacturing industry is feasible kept based in Australia by a strong domestic market.

McNeil provides a wealth of illustrative material from many countries and forward-looking firms. He instances General Electric’s ‘Ecoimagination’ programme launched in 2005, aimed at developing low-carbon solutions. The company reports that it has never had an initiative that generated better financial returns so quickly. Cloudy Germany is the world’s largest market for solar energy and German solar manufacturing companies produce over half the world’s solar panels. German companies are positioning themselves for the burgeoning global clean-tech market. Tiny Denmark manufactures over half the world’s wind turbines, obtains 20 percent of its electricity from wind and plans to increase that to 40 percent. McNeil notes dryly that contrary to some prophesies Danes are far richer than Australians by GDP per capita, while cutting their carbon intensity by over one-third in less than ten years.

Innovation needs science, and McNeil titles one of his chapters “How Science Must Save Us”. If Finland can produce Nokia, Australia also can help shape the world, not by raw military or economic might but by “the seeding of ideas in an interconnected world.” Education and research funding are crucial for the development of science and he discusses how they can be expanded. Scientists and engineers will not only develop new generation clean energy but also seek to understand and monitor the effects of climate change on the natural ecosystems of Australia with its immense variety of specially evolved plants and animals. They will also continue to seek the development of techniques for reducing methane emissions from livestock, which produce 10 percent of Australian greenhouse emissions.

McNeil knows first hand how serious the implications of climate change are.  The disease has been diagnosed but his attention in this book is on the cure. He matches the environmental imperative of emissions reduction with the economic benefit of entering wholeheartedly into a new, clean, low-carbon industrial revolution. Climate change poses a great risk to the Australian economy, and so does their over-reliance on fossil fuels. They need to embrace the change to clean energy. The costs of not doing so will far outweigh the cost of making the change.

One doesn’t need to be an Australian to be cheered by much that the book has to say and the detail with which it is illustrated.  But the final sentence has to be conditional:

“If Australia sets strong greenhouse gas emission targets and invests in unleashing clean-technology innovation,…”

Unfortunately it’s still a big if, not only for Australia.  But here’s the rest of the sentence:

“…not only will Australia help the world as it makes the transition towards a low-carbon development pathway to solve climate change, it will bring new prosperity and employment growth to a country desperately needing economic reform in its energy policy.”

Note: There’s a short relevant interview with Ben McNeil here on YouTube.

[Check out this book at: Fishpond, Amazon.com, Book Depository]