It would seem that economies that reduce heavy reliance on the extraction of natural resources and encourage more sustainable industries are justly considered ‘green’. Often, however, the reality of the so-called ‘green states’ differs significantly from the claims of various labelling initiatives. The process of economic greening is somewhat superficial, and heavily based on the outsourcing of emissions. Alice Fitzsimons examines this in the context of two Australian states, and calls into question the legitimacy of ‘greenness’ of South Australia and other pioneer states.
Australia’s economic prosperity is widely ascribed to its abundant natural resources. The development of the mining, processing, and manufacturing industries that utilise these resources have brought considerable wealth to the nation. The response of resource-based economies, such as Australia’s, to the environmental movement is thus of particular interest. Environmentalism has gathered influence in Australian politics and policy from the 1970’s onwards. At the same time, mining booms and subsequent unprecedented economic growth have resulted in large-scale environmental degradation, in turn inspiring a multitude of conservation movements and environmental activism.
The transference of the legacy of this movement into modern policy-making has facilitated the emergence of the so-called ‘green states’, in particular South Australia, which has become a leader in renewable energy and sustainability. ‘Green states’ for the purpose of this article can be defined as geographical areas earmarked as ‘pioneers’ in sustainable development, low-carbon economic policy and energy production systems. In contrast, neighbouring Western Australia is known for its extensive natural resources including considerable fossil fuel reserves, and a burgeoning mining and processing industry that has developed around these reserves. By examining the economies of these two states, in particular their major industries, areas of employment, energy consumption, resource reserves, and production and consumption of fossil fuels, the industry profiles of South and Western Australia can be outlined. The comparison of the two would allow determining the possible circumstances that provoke the emergence of ‘green states’.
Western Australia holds considerable reserves of crude oil, coal, and natural gas. The growth of fossil fuel consumption by the mining, processing, manufacturing and transport industries between 1973 and present is a clear example of localised fuel-based industrial expansion. The state economy has developed a heavy reliance on these cheap and readily available energy sources. Employment is centred around construction, processing, manufacturing, and mining (which has expanded since 2004 in particular), all high energy consuming industries.
In South Australia the picture is quite different. Whilst manufacturing remains a principal industry, from 1984 to 2012 levels of employment have fallen substantially. Mining is a comparatively small industry, with major players being retail, health and social care, construction, and the R&D industries, illustrating a general move away from more energy intensive activities. Resource reserves in South Australia are also significantly smaller than those of its neighbour, and many sites have already been exhausted. This confirms the notion that the ‘green option’ appeals especially to those states with scarce or exhausted natural resources, where shifting of the local economy away from natural resource extraction is much easier to achieve.
In terms of fossil fuels, South Australia produces less crude oil than it consumes petroleum products, whereas Western Australia’s production far outstrips consumption levels. In recent years, South Australian natural gas production has also dipped below consumption levels, whilst in Western Australia both production and consumption continue to rise steeply. Looking at energy intensity measures (units of energy per unit of GSP – gross state product) allows further analysis of the efficiency of fuel consumption. Energy intensity measures are expected to fall over time, as advancing technology increases the efficiency of production processes. Energy intensity rates in Western Australia are considerably higher than those of South Australia due to the prevalence of high-energy consuming industries. The increase of ‘secondary’, or professional industries, in South Australia is parallel with the reduction in extraction industries, and contributes to lower energy intensity rates.
However, models that measure the economies by production emissions do not account for the emissions embedded in imports. Economist Dieter Helm criticises these models for making it easy for nations to ‘green’ their economies by outsourcing their emissions. Helm advocates a consumption-based emissions evaluation policy, whereby the emissions embodied in the production of goods consumed by any country (or internal state) are considered their responsibility. If, for example, this model were applied to China, approximately 19% of production emissions would be exported, whilst 47% of growth in production emissions (2001-6) would be solely due to export industries expansion . If such a model were applied to the expansion of Western Australia’s mining and processing economies from 1980 to present, a similar pattern may emerge.
Investigating the nature of industry and energy consumption across Western Australia and South Australia has provided two distinct conclusions. First, the development of Western Australia’s regional economy around fossil fuel supply, particularly natural gas, indicates that large amounts of capital are invested in supporting infrastructure, for example an extensive domestic pipeline network. Due to its resource dependency Western Australia is not economically or politically predisposed to become an alternative ‘greener’ state, as it would incur great costs for the dismantling of existing infrastructure. In contrast, the South Australian economy is more able to make these structural changes as its domestic production of natural gas and crude oil is dwindling, and the historical interdependence of the state industries and fossil fuels is not as prominent.
The second conclusion relates to the process of economic greening itself. In the case of South Australia, it should be noted that whilst carbon intensive industry is shrinking, goods and energy consumption levels continue to increase. Consumption of major fuels such as natural gas and coal has been rising throughout the 1990s and 2000s, so greening is being achieved by scaling down production sectors in favour of less energy intensive secondary sectors. Removing the production element from the economy, however, does not constitute greening under a consumption-based model. Emissions are not being eliminated, but simply relocated.
Investigation of the Australian resources and industries has confirmed that the emergence of green states is often a circumstantial process that uses outdated and sometimes superficial models of emissions reduction to label regions as green pioneers. In the case of South Australia, although it appears to be a ‘greener’ state than its neighbour, the transition of the economy from resource-based to secondary industries is a prime example of this superficial greening. Production emissions are simply being outsourced, and thus not accounted for in the states carbon profile. These findings illustrate a wider point about the process of green labelling, which, though often well-intended, can be based on shakier foundations than is publicly known or acknowledged.
Alice Fitzsimons is a 4th Year History student at the University of Edinburgh, with interests in environmentalism, artivism, sustainable development and food security and sustainability. @AliceFitzsimons on Twitter.
Featured image by Mattinbgn on Flickr