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Wednesday, November 04, 2009

Military budget could pay for renewables by Renfrey Clarke


Renfrey Clarke

Admit it: you’re just a little disturbed when industrialists, fossil-fuel lobbyists and the Liberal and National parties thunder that big, quick cuts to carbon emissions would bankrupt Australian business. Well, aren’t you?

Rest easy. Australian capitalism has ample money — and ample technical resources too — that could be used to cut emissions drastically in as little as a decade.

The Rudd government says it plans to make business spend billions of dollars each year to cut emissions, but many times that sum is now spent on purposes that contribute nothing to practical human welfare.

Indeed, a good portion of this money is spent on the military — that is, on products designed to be blown up.

In May, the Australian government announced it would spend $24.6 billion on the military in 2009/10 (and more than $300 billion on the military in the next 20 years). Before you exclaim that our armed forces are needed to keep us safe, reflect that the rationale used by other regional powers to justify their military spending is the same.

Safe from whom, if not from people like us? The Australian military is the only one in the region with a serious remote deployment capability. Reflect, too, that Australia’s military spending last year was more than four times higher than Indonesia’s. The US spent more than nine times as much as China.

Granted, some of the present outlays of the Australian military are for items such as wages, rather than for the weapons and equipment needed to make wars overseas. So let’s take another approach.

Defense News on May 18 said the federal budget allotted $6.27 billion to buy new or upgraded equipment, and $5.47 billion to take care of in-service gear.

If we stopped arming up, and trimmed our forces to a non-threatening equivalence with the armed forces of other countries in our region, at least $7-8 billion a year would be freed for useful purposes.

On top of this, there’s $1.7 billion a year, not included in the military budget, that Australia now spends on foreign military operations. That suggests potential annual savings of perhaps $9 billion.

How does this compare with the sums that Australia is to spend on combating global warming? Here, a note of caution. Of the $4.5 billion over six to nine years announced by the government in May for its Clean Energy Initiative, only about $3.5 billion is new money.

And of this $3.5 billion, $2 billion is not for clean energy at all. This $2 billion is the sum assigned over nine years to the CCS Flagships program, aimed at developing “clean coal”.

As Green Left Weekly has explained in detail, “clean coal” will not help stop global warming, since the timelines are too long and the emissions that would still reach the atmosphere are enough to cook the planet.

That leaves new federal government funding for renewable energy of just $1.465 billion over six years, mainly in the Solar Flagships program.

In addition, the government estimates the renewable energy industry will receive a cross-subsidy of more than $20 billion by 2020 under the government’s Mandatory Renewable Energy Target (MRET) scheme. Under this program, electricity wholesalers will be compelled to derive 20% of their power from renewable sources by 2020 (although many loopholes remain).

The renewables industry is also expected to receive a transfer of wealth under the government’s proposed Carbon Pollution Reduction Scheme (CPRS), when and if this becomes law.

Under the CPRS, renewable energy firms are supposed to benefit as fossil fuel-burning competitors are forced to buy emissions permits, raising the selling price of their energy.

The CPRS is complex, and the actual flow of wealth to Australian renewable energy producers is impossible to predict accurately. In theory it could be as low as zero, since polluters will be allowed to buy “carbon offsets” abroad to meet their emission targets.

However, here we are trying to be kind to the government, so we shall make the (almost certainly, highly optimistic) assumption that the transfer of wealth to renewables firms from the CPRS will resemble that from the MRET scheme — about $20 billion by 2020.

From the MRET scheme, the renewables industry would thus have about $2 billion a year, and from the CPRS, a further $2 billion. Direct government grants under the Clean Energy Initiative would come to about $250 million.

Together, that’s still less than half the $9 billion or so that could readily be saved each year just from military spending.

Nor is that the whole story. The Rudd Labor government doesn’t just prefer guns to renewables. It also hands over huge sums in tax breaks, subsidies and concessions to the fossil fuel corporations that are primarily responsible for Australia’s world’s-worst per capita carbon emissions.

Estimates of the annual total of these effective subsidies in recent years have ranged as high as $10 billion. On May 13, soon after the 2009 budget was released, Crikey.com said that Greenpeace climate and energy campaigner Julien Vincent had calculated that about $7 billion in subsidies remained in place.

To this can be added the $200 million-plus the government plans to spend each year chasing the “clean coal” illusion, and the sum — clearly very large — the government eventually agrees to pay the big polluters as “compensation” for losses under the CPRS. Together, that could easy be a further $8-9 billion.

These are largely “ball park” figures, but the general scale of the sums involved is clear, as is the conclusion.

If Australian capitalism gave up its aggressive military posturing and stopped paying fossil fuel corporations to pollute, funding for renewable energy could be multiplied, probably at least four times over.

The economy would not collapse. Coal-burning power producers might go broke, leaving governments to take over the plants and organise their phasing-out. But almost all of the private investment in Australia’s coal-fired generating capacity has occurred since the 1980s, when scientists were already saying bluntly that burning coal was dangerous and needed to stop.

If you ignore evidence and invest recklessly, the neoliberal textbooks insist, you should take the consequences.

In an Australia that gave up foreign wars and stopped paying carbon polluters, and put its money into renewables instead, job numbers and popular living standards would almost certainly improve.

In a September 24 speech, federal energy minister Martin Ferguson ridiculed the German government for giving generous support to solar power, even though sunlight from Germany’s soggy skies provided only about half of 1% of its electricity in 2007.

The point of Germany’s solar feed-in tariff has been to create a world-class centre of solar power research and manufacturing that now provides export sales and as many as 40,000 well-paid jobs.

Australian universities have a strong record of solar power innovation. But notoriously, the innovators have had to move overseas to find the funding needed to develop their discoveries. With appropriate support, the solar industry could be developing right here.

However, the truth is that military aggression and high fossil fuel use aren’t just the result of ignorant bloody-mindedness — common as this is among Australian politicians and corporate leaders.

This country’s elites decided long ago that their position in regional markets had to be backed up by the credible threat of armed aggression.

Meanwhile, gaining export income the hard way, by developing world-leading expertise in areas like solar technology, is something Australia’s capitalists are content to leave to others. “Blessed” with some of the Earth’s largest and most accessible coalfields, our local elites prefer easier pickings, even if damage to the planet is colossal.


From: Comment & Analysis, Green Left Weekly issue #816 4 November 2009.


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