Four big bugs threaten our comfort zone  

Posted by Big Gav

Ross Gittins has been in good form lately - from his newest article at the SMH - Four big bugs threaten our comfort zone.

The first force is population. We're still only in the early stages of the ageing of our population, the significant implications of which are starting to dawn on us.

But this story has been overtaken by a more dramatic one. On the basis of the Rudd Government's preference for very high levels of immigration, Treasury is now projecting that the population will grow by 60 per cent over the next 40 years to 35 million.

You've heard that before, but I doubt if you've thought much about its implications. Treasury has. It foresees Sydney's population increasing by more than half to 7 million. Melbourne's population could increase by three-quarters to make it the same size as Sydney. Brisbane could more than double to 4 million (with Perth not far behind).

This prospect raises many questions, including: ''Are Australia's natural resource endowments, including water, capable of sustaining a population of 35 million? What are the implications for environmental amenity of this sort of population growth? Must it mean an even greater loss of biodiversity?''

Henry says his private view on these matters is pessimistic. ''Our record has been poor and in my view we are not well placed to deal effectively with the environmental challenges posed by a population of 35 million.''

His second long-term force bearing on us is climate change. So far, the main thing occupying the minds of our business people and politicians is how we can introduce an emissions trading scheme without hurting anyone.

Henry offers the tart observation that the introduction of such schemes ''is intended to cause a significant shift in the structure of the Australian and global economies over coming decades; quite possibly the largest structural adjustment in economic history. That is the point of doing it.''

Translation: It's meant to hurt because that's what changes people's behaviour. If it doesn't hurt it won't work.

Even if the world does get its act together on fighting climate change, we're in for a fair bit of it anyway. And if the rest of the world is being led by far-sighted leaders like Kevin Rudd, with oppositions like ours, the likelihood is the world won't get its act together.

If so, we'll reap the whirlwind. If we find the consequences of mitigating climate change so daunting, what's it going to be like adapting to it? Our already dry continent will become drier. It's likely some of our agriculture will be wiped out, with much of the rest having to move north.

It could be that much of the population has to move from the south-eastern corner of the continent. You think we've got a problem with boat people? Can you imagine how many there'll be if the Pacific islands and half of Bangladesh are under water?

Henry's third long-term force is the information and communication technology revolution. If you think this one sounds reasonably benign - more iPhones, Twitter and suchlike gadgetry and gimmickry - you haven't thought about it. History says the advent of such ''general-purpose'' technology can be changing the face of industries decades later. For openers, it could wipe out the newspaper industry (present company excepted, of course).

The fourth long-term force is the re-emergence of China and India. Their rapid progress on the path of economic development has hugely increased the value of our mineral deposits and will be a major source of export income for decades.

And don't worry about us running out. Henry says our remaining reserves of iron ore are expected to last another 65 years, black coal another 90 years, alumina another 85 years and brown coal another 500. Wow, that long, eh?


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