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Sustainable Economics for Sustainable Communities – from the macro to the micro


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Simon O’Connor, Economic Adviser with the Australian Conservation Foundation (ACF) was the speaker at a public meeting presented by Sustainable Communities on at 8pm on Thursday 27 May 2010 at Payneham Community Centre, Payneham Road, Payneham. The topic Sustainable Economics for Sustainable Communities – from the macro to the micro reflects the work he has been doing for an economic policy to be published by the ACF titled Better than Growth.

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Sustainable Economics for Sustainable Communities – from the macro to the micro

  1. 1. Sustainable Economics for Sustainable Communities: from the micro to the macro Sustainable Communities NCSP Inc. Public Meeting
  2. 6. ANZ Economist Saul Eslake said the destruction of homes did not count as an economic negative . Building new infrastructure, private and public, was new economic activity. He calculated that it could add between $1 billion and $2 billion to GDP , or up to 0.7% of the state’s economy Interpretation of economic tools: Source: as quoted in The Age, Rebuilding will hand state $2 billion , March 1 2009
  3. 7. 23,000 fewer people will be employed in the mining sector under the proposed ETS – a fall of 11% “ ETS to Shrink Regional Growth” – regional economies will shrink by 20% over the next 40 years under the Rudd government’s ETS Source: The Australian, ETS to Shrink Regional Growth , 26 March 2009 Concept Economics, The employment effects in the Australian minerals industry from the proposed Carbon Pollution Reduction Scheme, a report for the Minerals Council of Australia 21 May 2009
  4. 8. When external costs are added to electricity generation costs, renewable energy is cost competitive: Brown coal – total cost (externality incl.) ~$90/MWh Wind – total cost (externality incl.) ~ $77/MWh Australian Academy of Technological Sciences and Engineering Source: Australian Academy of Technological Sciences and Engineering (ATSE) (2009) The hidden costs of electricity: externalities of power generation in Australia page iii
  5. 9. Better Valuation
  6. 10. Who’s in charge: economics or society?
  7. 11. “ … the gross national product does not allow for the health of our children, the quality of their education, or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages; the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage ; neither our wisdom nor our learning ; neither our compassion nor our devotion to our country ; it measures everything, in short, except that which makes life worthwhile .… ” -- Robert Kennedy, 18 March 1968 The main culprit - GDP
  8. 12. GDP but without Genuine Progress
  9. 13. Economic growth at what cost? Source: Indicators of Australian Environmental Pressure 1951 – 2001 – from Hatfield-Dodds, S.(2008) ‘ Economic Growth, Employment and Environmetnal Pressure: Insights from Australian Experience 1951-2001 ’, Working Paper, ANU Environmental Economics Network, 18 November 2004, calculated from ASFF data CSIRO. % CO2 emissions Material flows, total Material flows, renewable Land degradation Intensive land use Water use
  10. 14. “ Our Government has a new vision for the nation’s economic future. …Boosting Australia’s global economic competitiveness is the touchstone of that vision. And to boost our global economic competitiveness we must boost productivity growth . That is the Australian Government’s central narrative on the economy.” “The immediate and overriding priority for fiscal policy must be to support growth and jobs.” Kevin Rudd 2008
  11. 15. Source: Treasury (2008) Australia’s Low Pollution Future: The economics of climate change mitigation: Summary Report page viii
  12. 16. 0.1% GNP premium per year for a safe climate Australian’s will have to wait an extra 6 months to be twice as rich as we are today
  13. 17. <ul><li>National accounts </li></ul><ul><li>International accounts </li></ul><ul><li>Consumption and investment </li></ul><ul><li>Production </li></ul><ul><li>Prices </li></ul><ul><li>Labour force and demography </li></ul><ul><li>Incomes </li></ul><ul><li>Housing and finance </li></ul><ul><li>- australian bureau of statistics </li></ul>Australia’s “key national indicators”
  14. 18. GDP – what’s the answer? “ Beyond a certain point […] ever increasing material gain can become not a gift but a burden. As people, it makes us less happy, and the environment upon which all of us, and our economy, depend, is increasingly degraded by it” Source: GlobeScan Incorporated, ‘Worldwide Measures: Three Quarters Say Governments Should Look Beyond Economics and Measure Social and Environmental Progress’ (12 November 2007).
  15. 19. Wellbeing tools
  16. 20. ccc
  17. 21. xxxx
  18. 22. From the macro, to the micro Source: New Economics Foundation, Plugging the Leaks, accessed at .
  19. 23. <ul><li>Sustainable local economic development? </li></ul><ul><li>Diverse range of businesses. </li></ul><ul><li>Positive local money and resource flows (a high local multiplier and local re-use of waste). </li></ul><ul><li>Strong local asset base incl. local people's attitudes, skills and knowledge; physical, financial and natural resources. </li></ul><ul><li>Responsive public and business sector working to strengthen and invest in the local economy. </li></ul><ul><li>Strong community incl. local activism, leadership, volunteering, and engagement in debate. </li></ul><ul><li>Sustainability and a reduced environmental footprint. </li></ul><ul><li>Increased understanding of economic, cultural and ecological inter-connections that link communities, span the globe and impact on the future. </li></ul>Source: New Economics Foundation, Plugging the Leaks, accessed at .
  20. 24. Accessed at
  21. 25. Simon O’Connor Economic Adviser 03 9345 1106 [email_address]