WHAT IS A LOW-CARBON ECONOMY?
Introduction
I am not confident that my understanding of macro-economics is sufficient to fully address the question
posed for this assessment task, so I have chosen to use my experience with the micro-economy of my
household as it moves towards having a carbon neutral impact on the world. As I examine my own
efforts to create a low carbon lifestyle I will necessarily consider how that would reflect a low carbon
macro-economy.
I aim to limit my carbon footprint as much as possible and ideally would like my impact on the world to
be carbon neutral. There are a number of areas in which I have taken action to address my aim of having
a carbon neutral lifestyle and I believe that in a low carbon economy it will be the responsibility of
individuals, businesses and different levels of government to take similar actions. I will also address the
barriers to my own efforts, and draw parallels with the barriers to developing a low carbon macroeconomy.
Lifestyle choices in a low carbon economy
How I live my life is determined by what I believe is ethical behavior, which balances my personal
wishes, needs/wants with the needs and wellbeing of my local and wider community.
The economy is made up of individuals and groups making decisions about low carbon or high carbon
options. As an individual I have to make those decisions daily. Should I catch the bus, or cycle to my
destination, or if there is the option of taking the car part of the way, should I use it. Do I need to have a
shower every day, perhaps using the gas booster to my solar water heating, or do I have a cooked meal
for breakfast, which might contain meat and thus contribute to greenhouse gas (GHG) emissions of N2O
or CH41 and the pollution of rivers by cows that graze close to river banks2 or should I eat a bowl of
muesli with organic fruit and nuts (maybe bought in bulk and made at home to reduce the use of
wasteful packaging).
In a low carbon economy, the majority of such individual decisions must be made with the aim of
mitigating GHG emissions foremost in people’s minds. Frequently, the low carbon decision will cause
some form of discomfort, of loss of face – what are you doing riding to work in the rain when you have a
perfectly suitable 4WD in the garage?!
When shopping, we have the choice of buying your fruit and vegetables in the supermarket (where you
will get the cheapest price, but in the knowledge that the products have been picked before they are
ripe so that they will travel large distances with the minimum of spoilage), or to shop locally for organic
vegetables, where fertilizers that degrade the soil are not used, and if you know your producer, you can
check the processes used from seed to table.
1
“only by also assuming reduced meat and dairy consumption do we find agricultural emission levels that do not
take more than half of the total emissions space in 2070. We therefore conclude that dietary changes are crucial for
meeting the 2 °C target with high probability.” (Hedenus, Wirsenius & Johansson, 2014)
2
Victoria squanders the chance to help its rivers :
http://www.abc.net.au/environment/articles/2014/10/20/4108584.htm
When you discover that your house is not energy efficient you have the choice of a retro-fit or to move
house, which are both expensive, or to stay put make as many savings as you can. Retro-fitting LED
down lights, purchasing solar PV and then cooking with electricity rather than gas, and switching off all
appliances at the mains when not in use, are all valid ways of reducing consumption, but they do require
an adjustment to lifestyle that makes life more complicated and for some more stressful.
Many people crave a larger screen TV with greater colour definition, a smarter phone, a faster car, more
choice of clothes, more stylish shoes, more “stuff” generally. In a low carbon economy people will have
to put up with less choice and look for quality and durability, which will require initially greater cost, but
more sustainability, with those quality and durable items being passed from person to person.
In Australia, people love to mow their lawns with fossil fuel driven mowers, blow the cut grass away and
trim the edges of their lawn with a fossil fuelled appliance. In a low carbon economy people will have to
brush the grass and leaves away, take off the ear muffs and get out the shears and use their muscles.
There will be fewer obese people because of this and because the food they eat will be healthier in a
low carbon economy.
In a low carbon economy more waste will be recycled or converted to re-usable products. Using waste
as a resource for fuel will contribute to GHG reduction, reduce the need for food crops as feedstock for
biofuels such as ethanol and reduce the amount of waste going to land fill. Even then the gas that is
given off by landfill can be captured and utilised for many different purposes, including for electricity
generation. This solution does take away from the personal responsibility that everyone has to reduce
their own waste, particularly when the waste is a pollutant also. Cigarette butts end up in the sea and
kill fish. Plastic and other packaging is washed up on the beaches where I leave regularly, because this is
a throw away economy at the moment. Let someone else clear it up is the model. Similar I suppose to
the free pollution of the atmosphere by GHG emitters. So individuals will reduce their waste in a low
carbon economy and we will all have a cleaner environment.
What about the infrastructure
I cannot address the issue of electricity generation in detail, but in a low carbon economy all current coal
and oil reserves will remain in the ground and the “appalling blight on the Australian country”
(Australian Federal Treasurer:
http://reneweconomy.com.au/2014/hockey-repeats-wind-farmsappalling-blight-on-landscapes-99121) will be wind farms and solar towers.
Most of the choices identified above are able to be made by individuals at present. I have the choice to
take the train or go by car. Trains in Melbourne where I live are powered by electricity that comes from
predominantly the burning of coal. The train is a better choice the car, but it would be better still if the
electricity for the train came from renewable sources. In a low carbon economy, all electricity
generation would be renewable. There are also choices to be made about the kind of car to drive.
According to Peter Seligman (Seligman, 2010) we should drive a hybrid now and a fully electric car
charged from the grid when in a low carbon economy there is sufficient renewable energy for the CO2
emissions from electricity production to be less than that from a fossil fuel-efficient car.
But what about the bus? A paper prepared for Prepared for the Victorian Department of Transport
in 2011 stated that “despite offering significant potential benefits in terms of GHG emission reduction
and/or future transport fuel security, the nature of the current market barriers to the market adoption
of alternative fuels and vehicle technologies is sufficient to prevent near-term adoption by the Victorian
bus industry” (Rare Consulting Pty Limited, 2011). More optimistically, a wide range of alternative fuels
and technologies, are now available for bus operators in Europe, where it is recognized that, “If CO2
emission and local pollution targets are to be met it is clear that alternative vehicle solutions must be
found.” And “all new bus models sold in Europe since 1 January 2014 must meet the stringent Euro VI
standards for harmful emissions” (Clean Fleets, 2014). This is an example of a regulatory strategy that is
having an impact.
Generation of wealth
Above I have described a range of choices people can make in their everyday lives, many of which
involve decision about how to spend income but this ignores the question of how income is to be
derived. As I am retired, I am dependent on a pension from investments in the macro-economy. Every
day in Australia we hear on the news about the enormous profits that our four main banks make. They
and the miners (though not so much recently) are the mainstay of many pensioners incomes. But the
miners are driving GHG emissions through the roof and the “big four” banks are investing in them – as
well as tobacco companies, gambling, armaments.
In a low carbon economy, people must invest differently and it is possible to derive an adequate
investment income from pension funds that apply positive and negative screens to the companies that
they invest in, an example of which is shown below.
Conclusion
There are an increasing number of reports being published that seek to demonstrate how countries and
the world can move to a low carbon economy while continuing with economic growth, for example the
authors of a report by the Climate Policy Initiative states, “…we find that transitioning to a low-carbon
electricity system could actually increase the capacity of the global financial system by as much as $1.8
trillion between 2015 and 2035.” (Nelson et al., 2014, p iii). These reports attempt to demonstrate the
possibility there is ‘gain without pain’, but I believe that there is ’NO gain without pain’, and although
not easy, the decisions that individuals make about what they value more, Gross Domestic Product
(GDP) which means more pollution and the possible end of humanity, or Gross Domestic Happiness3 will
determine whether a low carbon economy is ever achieved.
REFERENCES
Clean Fleets (2014). Clean Buses – Experiences with Fuel and Technology Options. Downloaded from the
internet on 19 October 2014 at: www.clean-fleets.eu (All new bus models sold on the market since 1
January 2014 must meet the stringent Euro VI standards for harmful emissions.
– www.clean-fleets.eu.
Hedenus, F., Wirsenius, S., & Johansson, D. J. A. (2014) The importance of reduced meat and dairy
consumption for meeting stringent climate change targets. Climatic Change. DOI: 10.1007/s10584-0141104-5
Nelson, D., Hervé-Mignucci, M., Goggins, A., Szambelan, S. J Zuckerman, J (2014). Moving to a LowCarbon Economy: The Financial Impact of the Low-Carbon Transition. Climate Policy Initiative, October
2014, downloaded on 20 October 2014 from: http://climatepolicyinitiative.org/wpcontent/uploads/2014/10/Moving-to-a-Low-Carbon-Economy-The-Financial-Impact-of-the-Low-CarbonTransition.pdf .
Rare Consulting Pty Limited (2011). Assessment of alternative fuels and vehicle technologies for the
Victorian bus fleet. Downloaded from the internet on 19 October 2011 at:
http://www.dtpli.vic.gov.au/__data/assets/pdf_file/0006/220587/Assessment-of-alt-fuels-and-vehicletechnologies-for-the-Vic-bus-fleet_Rare-Consulting_Jan-2011.pdf .
Seligman, P (2010) Australian Sustainable Energy by the numbers. Melbourne Energy Institute,
University of Melbourne.
Tony
3
See: http://www.grossnationalhappiness.com/