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'Australia's environmental and economic future': address to the National Coal Week conference, Sydney

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Keynote Address




to the

National Coal Week Conference


15 April 1991

There is no shortage of explanations for Australia's economic malaise.

. We don't save enough.

. We don't invest enough.

. We don't work long or hard enough.

. We consume more than we produce.

. We are over governed.

. We don't have an industrial culture.

. We can't bring together our disparate policies in industry and the environment.

. We think short term.

. Our costs are too high.

. There is no incentive.

. We don't change fast enough.

When we do tackle some of the issues it's always a case of 'too little too late', such as we saw in the Prime Minister's economic statement last month.

I am relieved to find at this conference a concentration on more than one issue. While there is a worthwhile and necessary focus on environmental issues you are also examining vital questions of human relations within your industry, management skills, and marketing in a very competitive world, which some of you are helping to make even more competitive by your investments abroad.

My relief stems from the conviction that examination of free standing issues in isolation can lead to absurd outcomes and a highly artificial debate.

Changing Australia from a country that has lost its way into a country of purpose and optimism requires the establishment of a framework of national goals and values within which the debate can be shaped and kept relevant. The alternative is a country which may be full of clever ideas and analysis but where the clever ideas endlessly conflict and lead to paralysis.

The environment debate in this country is a good example of the tendency.

Too often issues are debated in a social and economic vacuum.

The failure to consider the fact that issues are inter-related leads to artificial and erroneous outcomes.


Our democratic politics, with its necessary attention to public opinion, plays a part in creating the problem. A limited number of issues can occupy the public agenda at any time. Those ideas in good currency at any time are likely to be crucial to what decisions are made.

Rapidly increasing public concern for the environment through the 1980s undoubtedly led to opportunistic decision making on resource issues in both mining and forestry before the 1990 election.

That is not an isolated example, however. Since 1983, decision making on uranium mining in Australia has been dominated by political factors rather than rational analysis.

The Government allows the development of one of the world's biggest uranium mines to save a State Labor government's skin while attempting to appease ideological opposition to mining by blocking any other developments. Perhaps the current

review of Labor's policy may result in a more rational approach. I am not holding my breath.

But economic success since the Second World War has in fact been a feature of democratic societies rather than dictatorships, Marxist or otherwise, so it is wrong to brand democracy as the villain.

Australian failures are just that, Australian failures, and we need to address their myriad causes.

The central point I wish to make today is that we have to break out of the pattern of considering problems in isolation and develop a more holistic approach if Australia, and its component parts, including your industry, are to succeed.

In urging a changed approach I want to put a number of propositions before you.

The first is that concern for the environment is a critically important issue, and it will remain so.

The second is that we will not deal with the environment or other key issues satisfactorily unless we define some common ground and some agreed objectives.

The third is that government, of necessity, has a key role to play and to illustrate that by reference to the greenhouse question.

After all that, I want to say something about the general policy framework needed for your industry.



There is no room within the national policy framework for carelessness about the environment.

That point has to be made because although almost everyone pays lip service to the concept of sustainable development, attitudes in industry vary widely. There are those who accept that there is an ongoing need to continuously improve

environmental standards and industry performance. But there are also those who, still, see all this as a passing fad, as just the latest scare campaign which will be overtaken by other fads in due course.

After all, if you stir the white backlash long and hard enough you can turn back government determination to enact national land rights legislation. All you have to do is to change public opinion to convince the Prime Minister of the day that

the Australian people are now less compassionate. Perhaps I should add I am not disagreeing with the final decision on that particular issue. What I am looking at here is the way issues move in and out of fashion.

The loss of public and political support for that bete noir of some miners might be regarded as a talisman. In fact, even that area confirms the long term resilience of issues which derive their permanence from an inescapable fact base.

The ongoing failure of our community to find a successful accommodation with a displaced Aboriginal population means that their continuing presentation of often appalling social conditions acts as a constant reproach to each emerging generation - including each generation of journalists and other opinion leaders. The wave of sympathy may subside and even appear to die but it rises again. Public opinion may be

fickle but it can be moved again by grim reality.

The environment impacts much more broadly and hence has much greater claim to permanence in the political, administrative and popular landscape.

Consider the underlying fact base.

The key driving factor is population. Present world population at 5 billion plus may well double.

The report of the United Nations World Commission on Environment and Development, chaired by Norway's Gro Harlem Brundtland and published as "Our Common Future", puts it succinctly:

"Our human world of 5 billion must make room in a finite environment for another human world. The population could stabilise at between 8 billion and 14 billion sometime next century, according to UN projections."


That population should not be seen as an amorphous blob.

The gross figures can obscure the fact that each human being is an instrument and a force for change. At present, more than 5 billion individual forces for change.

Human beings, unlike plants and other forms of animal life, do not necessarily choose to maximise their physical utilisation of the available environment. But all seek to survive and most try to ensure that they enjoy the best material standards

available. Who can begrudge or deny the demand by large numbers for lives which are more human than they at present enjoy?

That reality underpins the constant pressure for change and growth. It will continue to ensure that the physical environment is under pressure and to demand our attention.


The failure to deal satisfactorily with environmental issues flows from both political opportunism and a fragmented approach to policy consideration.

I have already touched on political opportunism and this audience would be familiar with that aspect. But the fragmentation of policy has received less attention.

It is fashionable to decry the economic success of the fifties and sixties. Mr Keating does it all the time and blames Sir Robert Menzies for the debt crisis that has developed under his own stewardship.

Yet at the end of the Menzies era we had lots of confidence and little debt. Our confidence was born of nearly a generation of steady growth in living standards and based on our economic position which must have been the envy of our region.

As a student and young man in that period it seemed that we knew what sort of country we were and where we were heading.

The fragmentation of policy approaches which is so much part of our present problems came into favour in the Whitlam period. A plethora of inquiries probed the "needs" of various sectors of Australian life.

A need once found was a need to be met. There was an explosion of government programmes and government expenditure.

The curse of a fragmented policy approach is a little analysed legacy of that period.

As a lawyer - or rather an ex-lawyer - I have described it before as bringing the skills of a barrister to the business


of government without the skills of an administrator. The individual briefs on aspects of Australia may be mastered to perfection and the arguments may have irrefutable logic but the end result may produce not a piece of a jigsaw but a contribution to overall incoherence.

In fact, the law provides some nice analogies for the point I am trying to make.

On an individual case basis, who can deny the justice of bringing a negligent medical practitioner to account for his actions? There is room to doubt, however, that the profusion

of medical malpractice suits in USA has contributed to a better health care system in that country or that it will do so here.

Each case may be individually justifiable. The total impact on society may be quite bizarre.

The impact of the disparate decisions of Australian governments is also bizarre. Our rich and favoured country is debt laden and at risk.

The dangers of procrastination and paralysis and the role of government in avoiding paralysis were brought home to me by the reported comments of a biologist turned philosopher Dr Humberto Maturana who visited Australia last month to discuss his work on how humans comprehend reality. "The Age" reported on his views in the following terms:

"...each human constructs a personal model of reality and coordinates responses with that model. Humans disagree with each other because their realities differ.

Dr Maturana's philosophy flows from this conclusion. There is no objective reality, and while all individuals continue to believe that their views of reality are objectively correct there will always be conflict.

The only way to solve the problem is to do what babies do, learn from the examples of others; or, through direct training, alter the brain's view of reality until some degree of concordance is achieved between the realities of teacher and learner.

Turning to a real-world example, Dr Maturana says the conflict between conservationists, developers and politicians stems from very different views of reality. The conflict cannot be resolved unless all three parties agree on a common purpose; all must accept that their own views of reality are imperfect. 'Without coincidence of purpose, there can be no coincidence of action.'"

In this fragmented debate on the environment each of us, the botanist, the biologist, the economist, the miner, the demographer, the agricultural scientist, the conservationist,


the artist and the politician all bring an individual view of reality. The debate between them may never lead to a conclusion because they are in part discussing different subjects. It is like the debate on abortion. It is like

ships passing in the night. One protagonist argues about women's bodies and the evils and dangers of illegal abortion. Another talks of the separate biological life of the foetus. Usually each side talks in terms of absolutes between which

there can be no reconciliation.

In resolving the environment/development debate the role of government is in fact the key role. It is government which must provide Dr Maturana's "coincidence of purpose" by defining where the parameters of reality are. To fail to do

this can result in a debate which is endless and leads nowhere.

That is why the Opposition has urged a more defined approach to the ecologically sustainable development (BSD) process. It is not a process which can proceed at large because to allow all views equal validity is to permit stalemate.

I have suggested to the Government that if it is to break out of the present appearance of drift in the BSD process it needs to establish both its economic and environmental bottom lines.

At a minimum I suggest that the Government should, in terms of its environmental objectives, set targets as proposed by the Opposition as part of a national action plan for the 1990s.

These should include:

. A soil conservation strategy that specifies the percentage of our land we seek to rehabilitate to productive use

. A target for the number of species of Australian plants and animals which have been safeguarded to the point where they can be removed from the endangered list

. A timetable for the achievement of national minimum standards of pollution control particularly focussing on discharges into the atmosphere and waterways

. A target for the amount of energy consumption derived from alternative fuel sources and a commitment to a minimum energy use reduction of 20 per cent within the public sector as part of an overall plan for more

efficient use of energy.

On the economic front, the Government must harden up some of the propositions advanced in its BSD discussion paper.

It should make it absolutely clear that the promotion of economic growth is a non-negotiable part of the sustainable development process.


Those environmentalists who wish to pursue negative growth objectives are free to do so outside the working party process. Their work within that process must be focussed on getting the best possible approach within a growth-oriented

framework that enjoys bipartisan political support.

The Government should now say that it will vigorously promote continued resource development and exploration and, most importantly, give top priority to value-adding through more processing of Australian raw materials.

Finally, it should give wholehearted support to the concept that the combination of Australia's geography and efficient processing can make a major contribution to reducing pollution and energy waste in other parts of the world.

That it is government which must, in the end, determine our "coincidence of purpose" is clear.

Recently, I provided a room at parliament house for Professor S. Fred Singer at the request of John Stone on behalf of the IPA where Singer expressed scepticism about ozone layer depletion being affected by CFCs. I was struck by the

following comment of Singer's from an article headed "My Adventures in the Ozone Layer":

"Science is supposed to be value-free. I learned differently when I conducted a modest survey among my colleagues during the SST controversy. I found that those who opposed SSTs for economic (or less valid)

reasons also tended to believe that the environmental effects would be serious. Those who liked the idea of supersonic transportation tended to belittle the ozone effects; they turned out to be right a few years later, but how did they know?"

Crudely paraphrased, that amounts toi Pick your expert depending on his or her prejudices!

That is too much part of the pattern of debate in Australia.

It is instructive to compare that with what happens in countries with more successful economies.

A Harvard Business School view of Japan, presented by Professor Ezra F Vogel of that School in the book "Ideology and National Competitiveness", suggests:

"Companies are considered responsible for meeting and adapting to the requirements of the surrounding community. They are praised for providing recreational and educational facilities that are beneficial to the employees and others in the communities in which they

live. Since 1970, companies have been held responsible for the effects of pollution. Government and business associations work together in trying to promote research


and new technology to speed the development of pollution control equipment, reduce pollution, and spread the expense of installing controls among the polluters.

At the local level new mechanisms enable community representatives to present the needs of their community to relevant business and government bodies. Leaders of protest movements are generally co-opted to work within

government and business organisations. If the prgtest group is considered too uncompromising, an effort is made to isolate it, reduce its base of power, and limit its room for manoeuvering."


"Labor and management, government and business leaders, and leaders of competing companies in the same sector work together for common purposes much more than in most Western countries. Great efforts are made to cultivate

strong informal ties and to create a climate of human warmth and udnerstanding that will make it easy to find new flexible ways to solve problems. In the Japanese view, many Westerners are excessively rigid,

conservative, unimaginative, legalistic, and egotistic when they deal with common problems."


The struggle within your industry to come to grips with the Greenhouse issue further illustrates the point.

There was concern from some coal producers when the Opposition - ahead of the Government - announced support for greenhouse gas emission reduction targets. Since I have had responsibility for environment policy I have pointed out the need to retain some flexibility in the pursuit of this target but it remains a commitment.

I said in October last year that;

"... any such goal ... may have to be adjusted into the future. Energy use in Australia over the next 10 or 15 years is not completely predictable but if we are to significantly add value to natural resources the demand will almost certainly increase.

Similarly, it may be desirable for some highly energy intensive industries to be relocated in Australia where our relative efficiency and strict standards may make a net contribution to a better global environment. That would have implications for energy consumption and

generation of greenhouse gases in this country.

It is realistic, also, to relate Australia's efforts to the positions of other countries, some of which have made


their targets subject to broad international action. In the absence of commitments from the United States, the Soviet Union and China there is still some way to go in meeting that condition.

"Having set this target, the Government must now develop effective strategies aimed at increasing energy efficiency and developing alternative energy sources."

I have seen some evidence that the industry retains some of the same concerns now that the Government has announced its (heavily qualified) target of an interim planning target of stabilising emissions of Greenhouse gases, based on 1988

levels, by the year 2000 and reducing them by 20% by 2005.

The objective of reducing Greenhouse gas emissions in Australia is neither a Luddite nor a Club of Rome response to an imagined problem. It is a response that is based on:

1 The knowledge that we face an explosion of demand for the outcomes of energy use as world population grows (and probably doubles) and the mass populations of still poor countries pursue higher living standards, not to mention the desperate need in our own country for more value­

adding processing

2 The knowledge that we are changing the composition of the atmosphere at an historically rapid rate and that the temperature and climate outcomes of that are at best uncertain

3 The knowledge that the projections based on the population and energy explosions referred to in 2 above suggest scales of change which demand prudence rather than the bland assumption that the risks are so small they do not warrant modification of existing practices and trends

4 The knowledge that existing patterns of energy use and generation will dominate what happens as we move into the next century and that the best prospects we have in this decade for improving environmental outcomes in the next century (in this area Of concern) lies in energy conservation

5 A belief that we can continue to advance technologically in our generation and efficient use of energy.

The Brundtland report considers low and high energy use scenarios from 1980 to 2025, without increased per capita use, a global population of 8.2 billion would need about 14

Terawatt years (over 4 TW in developing and over 9 TW in industrial countries) an increase of over 40% over 1980.


"But if energy consumption per head became uniform world wide at current industrial country levels by 2025 that same global population would require about 55 TW."

That is quite a range but in the industry you would know the pressures for continued development in China and India alone will put enormous pressure on any "low" scenario.

The same report gives a high scenario example of a 35 TW 2030 (between the very low scenario based on no per capita increase and that based on an equal per capita use at current industrial country levels) which it points out would involve producing 1.6 times as much oil, 3.4 times as much natural gas and nearly 5 times as much coal as in 1980.

This meeting may have expected me to attempt a scientific assessment of the extent to which measured and anticipated changes to the composition of the atmosphere will cause temperature and climate change. But you, like me, have access to filing cabinets full of reports from the likes of the

Intergovernmental Panel on Climate Change and the CSIRO Division of Atmospheric Research and to the analysis of people like Fred Singer and Brian J. O'Brien.

You, like me, know that there are large uncertainties. But only a crippling example of industry-based notion of "reality" could suggest that the risks are too small to warrant action.

The official response of the NSW Coal Association does not go so far. Instead it suggests (Newsletter Dec 1990) that the setting of a target should have been preceded by the reference to the Industry Commission which is to analyse the economic,

social and environmental impacts of meeting such a target.

Coal industry publications indicate the tensions within the industry on the issue and again illustrate the essential role of government as "keeper of the ring".

It is entirely proper for members of your industry to finance and then promulgate the work of more sceptical scientists like Dr O'Brien.

It is both proper and necessary to draw attention to important economic issues and arguments which must be met but to draw words from one of your own publications:

"The difference of opinion over the severity and timing of the greenhouse effect, leave governments and communities with a difficult question - what reasonable measures should be taken now for a future that cannot be

accurately predicted?

The answer is reasonably clear. The greenhouse effect may eventually cause problems of some magnitude, and preventative actions which can be taken now are being



There is no solace in procrastinating and the world's governments and responsible corporate and private citizens are formulating action plans to protect future generations from the possible impact of the greenhouse effect."

That passage came to my mind when I saw a congratulatory letter from this Association to someone who had expressed scepticism about the Greenhouse impact. At least, I thought, I know what I should say if I want to please my audience!

But if there is any substance in the propositions I have advanced today there is no place for me to just adopt your reality as mine.

I come before you as a representative of the next government of Australia led by John Hewson.

That government will adhere strongly to the keeper of the ring approach to which I referred earlier.

It will be the definer of our national purpose.

It will not be a creature or a captive of any industry or any lobby.

It will be the creature of Australia, the captive of Australia's national interest.

I am optimistic enough to think that you will welcome that - and my perception of Australia in the world's reality is that such a government will offer great advantages to your



You are well served by a number of factors:

. by the imperatives of world demand for energy

. by your capacity to contribute to the restoration of Australia's debilitated economic position and - if I may say -. by the intellectual quality of some of the leaders in

your industry.

You will be greatly aided in both your enjoyment of life and in achieving your objectives if you heed the words of the American historian, Taylor Branch, who wrote in the preface to his engrossing account of the civil rights movement in that country:

"... the truth requires a maximum effort to see through the eyes of strangers, foreigners, and enemies."


If you regard environmental spokesmen as strange, foreign or enemies, let me tell you the truth as I see it.

In the case of the coal industry the framework you need has to include recognition that:

1 Energy use will continue to grow. Note Brundtland suggests it has to accommodate growth of 3% per year for underdeveloped countries.

2 Use of coal will continue to be part of that growth and Australia's balance of payments position and declining share of world trade make continued - if possible, increased - involvement in the world coal trade


3 Australia's share of that growth will be determined by our competitiveness - can we provide the right quality at the right price.

4 Your industry, like all those dealing in commodities, is therefore locked into the demands for macro and micro­ economic reforms required to provide internationally competitive trading conditions.

5 Both energy demand and environmental concerns will not abate. Increased efficiency of coal use and constant improvement in technology to minimise environmental impacts is therefore a sine qua non of continued success.

6 There will be worldwide pursuit of alternative energy sources and research in this area must be a high priority.

7 Local environmental standards will become more not less onerous as will environmental health standards for employees.

8 Global and national environmental concerns including those about possible climate change will exert constant pressure to improve efficiency of utilisation. This should be embraced as an exciting challenge which provides opportunities and not just burdens for Australia.

9 It doesn't pay in the long run to speak with a forked tongue. Paying lip service to other people's realities is not good enough. Environmental concerns need to be your genuine concerns too and to be acted on.



The words of your critics and opponents define the challenges you face.

In meeting them you will require all the vigour and intelligence which has made you such an important contributor to Australia's and the world's economy.

You will also require more wise and resolute government than, you have so far enjoyed.

I confidently leave the first task in your more-than-capable hands.

The second lies squarely with John Hewson, me and the other members of our team.

The best thing we can offer Australia is the determination to govern in the best interest of all Australians.

To know what is in the best interest of all Australians requires us to be open to voices and views of all the competing interests who present their "reality".

We will be greatly aided if at the same time you and other interest groups avoid what Professor Vogel says the Japanese see in us - rigidity, conservatism, lack of imagination and excessive legalism - and follow Dr Maturana's advice as well by accepting that your own view of reality is imperfect.

I hope that this conference will be a step along the track to achieving for Australia the great and sustainable future of which we are capable.