The boom is over, long live the boom.
Such was the central message at the launch of Malcolm Turnbull’s national innovation and science agenda last week. According to the prime minister, “the mining boom inevitably has receded”, but by “unleashing our innovation, unleashing our imagination, being prepared to embrace change, we usher in the ideas boom.”
The constructive tone of the Turnbull statement has been widely celebrated, particularly in contrast to the flag–draped, onion–munching fear–mongering of his predecessor. Having a leader prepared to frame Australia’s future with hope and ambition is a very welcome change. But if Australia is really to swap high vis for high res, then we need to take on the entrenched political economy that is holding things back. Dynamic innovation cannot be unleashed in a country that is captured by the vested interests of the fossil fuel mining industry.
It was Austrian economist Joseph Schumpeter who observed that the “essential point to grasp is that in dealing with capitalism, we are dealing with an evolutionary process.” Turnbull clearly had biological metaphors in mind when he referred to an “ecosystem of innovation right across the economy” this week. But the thing about evolution and ecosystems is that they occur within an environment which conditions how things change and evolve. The same is true of an economy. And the problem we have in Australia is that our economic conditions are being warped by the political dominance of the fossil fuel mining industry that is determinedly inhibiting the potential for innovation.
The hard numbers tell a clear story. The national innovation and science agenda involves the federal government spending commitments of $1.1 bn over four years. This figure is dwarfed by the $18bn in production subsidies to the coal mining industry per annum and the roughly US$30bn or so in fossil fuel subsidies equivalents which Australia gives away every year. And all this for an industry that is shedding jobs by the day.
These subsidies, propping up the worst of the mining industry, are holding back innovation. According to the International Energy Agency, “by keeping prices artificially low, fossil-fuel subsidies encourage wasteful consumption, disadvantage renewable energy, and depress investment in energy efficiency.” The IMF says “it is generally in countries’ own interest to move ahead unilaterally with energy subsidy reform”; eliminate them and “the reform gains are large.” Yet it was just this month that Turnbull declined to sign an important fossil fuel subsidy reform communique in Paris, causing some members of the coalition government to loudly celebrate a moment of old–style industry protection.
The cold dead hand of the fossil fuel mining industry can stifle innovation in other ways. If necessity is the mother of invention, then independence of mind and time and space to think are the progenitors of innovation. But as Carol Richards and Robyn Mayes from Queensland University of Technology Business School argued recently, “Australian universities, from all tiers, often have deep-seated links to fossil fuel mining. These range from training agreements, to research centres funded by donations from multi-national mining companies.” The researchers observed that these ties can impact not only on administrative decisions, but also on research integrity and academic freedom. A key plank of Turnbull’s agenda is increasing collaboration between businesses and universities, but far from guaranteeing more innovation, the risk is that independence of research will be further frustrated. Freeing universities from the vested interests and accompanying managerial ideology that now plague our higher education sector is an essential step to the kind of bolder intellectual freedom and lateral thinking that leads to new ideas.
To truly unleash innovation, the key is to encourage development in areas where the world really needs it. Australia happens to have a great natural advantage, namely the bright horizon of renewable energy technologies. Innovation will also be crucial to secure the availability of good jobs in new industries to make up for the necessary closure of coal mines and power stations.
The national innovation and science agenda offers no specific solace or encouragement to the sustainability sector at large. Although innovation is one essential part of tackling major environmental challenges, it is an imperative that is not reflected in the agenda. There was nothing in Turnbull’s statements to ground the need for innovation in the pressing requirement to decarbonise the economy or respond to other urgent pressures on planetary boundaries. Sustainability was not mentioned once in Turnbull’s speech or in the press conference that followed. Investment confidence in the Australian renewables industry in particular has been shattered over the last few years and while commentators have praised the new agenda as providing some practical help to clean energy start-ups – in common with all others – the vandalism of the Abbott government has not been undone.
We already have the technology to make a full transition to renewable energy in Australia, but much more political courage is needed to phase out fossil fuels and commit the country to this necessary change. Moving beyond the language of innovation, the government should demonstrate its commitment to change with more policies to support sustainable industry development, and firm targets for the phase–in of renewables on a state and nationwide basis. The aim should be a regulatory environment which fosters an ecosystem of innovations in sustainability. Some innovation is good for the environment and society; but some is not and government should take an active role in supporting the former at the expense of the latter.
There was international recognition at the UN climate talks in Paris that a global energy system based on renewables is the foundation for climate action going forward. We saw a slew of renewable energy initiatives coming out of Paris, based on the recognition that it is a cost-competitive source of power in many countries already. Australia is now in a position to lead this shift. It is a shame that the science and innovation agenda did not seize that initiative.
