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WA: the unsustainable state?

By Peter McMahon - posted Monday, 27 July 2009


Western Australia is currently presented as the great economic success of the nation. Driven by the mining boom, WA has experienced sustained growth in exports and economic growth when the rest of Australia has been faltering. In addition, a dramatic influx of immigrants sent house prices and rents sky-high before they came down somewhat due to the economic crisis. But this success may be short-lived if WA cannot adjust to the imminent arrival of a number of issues that constitute a threat to ongoing sustainable development.

In addition to the well known global threats of climate change and peak fossil fuels, Western Australia faces its own unique problems. These revolve around the key characteristics of life in WA: the reliance on cheap and readily available oil; the volatility and fragility of WA climate and environment; and WA’s (and more particularly Perth’s) isolation.

It faces particular problems due to location and past practice, including worsening salinity, declining bio-diversity, water shortages and changing rainfall patterns. WA also has one of the most energy-intensive and car-dependent populations in the world.

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A long way from anywhere with a mostly harsh climate, little water and generally poor soils, WA was never a strong candidate for European-style development. When it was settled in 1829, thanks mainly to misleading assessments by that young man on the make, Captain Stirling, the Swan River Colony struggled to survive due to an inability to achieve a critical mass in terms of economic development. For more than 50 years WA was the Australian colony most likely to fail.

It was the ready availability of reasonably cheap fossil fuel energy (initially in the form of coal) and the discovery of gold that turned WA into a genuinely promising economic prospect. The reliability and relative ease of travel by steamship and train opened up WA to the world as well as exposing the interior at a time when people and wealth flooded into WA to exploit the gold finds. In the 1890s the state’s population increased fourfold, a flourishing capital city grew up and the gold-derived wealth spread throughout the state promoting development of various kinds. When gold faltered in the early 1900s, the maturing agricultural sector took up the lead thanks to astute government policy and a comprehensive rail system.

For several decades after 1910 WA relied on farming, especially sheep and wheat, to generate income until oil and metal ores were discovered in large amounts in various regions of the state, most notably in the northwest in the 1960s. Thanks to government initiatives, commercial mining operations (mostly, iron ore, nickel and bauxite) got underway which increasingly led the WA economy. Soon oil and natural gas would be added to the mix of natural resources.

The energy and mining boom was built on cheap oil. Oil for exploration, mining, processing, transportation to ports and then overseas, and to carry people and goods to and from the mine-sites. Perth, which was increasingly shaped by the boom, was also reliant on cheap oil for transport and production. Perth was an LA-style city based in motor vehicle traffic and WA increasingly relied on road and air transport to carry goods and people interstate and overseas. The still important agricultural sector continues to rely directly on cheap oil for farm and processing machinery, transport and fertilisers.

But the age of cheap oil is coming to an end, and so WA is facing some very serious challenges. Oil prices can only rise, and as last year showed, those rises can be steep and rapid. Ultimately, oil supplies may not be assured and alternative energy sources will have to be found. The state has some reserves of oil and abundant natural gas, but as Western Australians have already found out, unless these reserves are preserved for local use global prices will make them increasingly difficult to access cheaply.

In addition, any measures to limit carbon pollution (such as a “cap and trade” or tax scheme) must drive fossil fuel prices sharply upwards, affecting industrial production and transport along with industrial and domestic electricity and gas provision.

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If WA is to survive as a viable state at some point in the not too far distant future socio-economic activity will have to be reorganised to accommodate this new reality of energy scarcity. Urban development will have to be rethought, likely by in-filling the inner suburban areas and fast-tracking mass-transport systems. Agriculture needs to be moved away from its heavy reliance on fossil fuels (including for fertiliser) and additives like superphosphate. Mining, typically a boom and bust industry anyway, will likely decline as energy costs rise, and especially if overseas demand falters. As a general trend, increased transport costs will promote a return to local flows in goods and people.

There are signs that an awareness of these new conditions is seeping into the WA population and being reflected in political matters. The previous Carpenter Labor Government had a reasonable global warming policy and was planning some notable developments in public transport, building on the immediate success of the new Perth-Mandurah line, but in general it failed to establish its green credentials. The increasingly high profile of Planning and Infrastructure Minister Allannah McTiernan, who pushed through the new rail line, was also indicative of this growing focus on planning for change. Labor, having suffered a surprise loss last year, is currently in turmoil, with McTiernan contemplating a shift to Canberra and the current leader and ex-Treasurer Eric Ripper very much seen as a caretaker leader. Whoever emerges in the new Labor leadership are likely to be decidedly greener than in the past.

The current Barnett Liberal government, only in office thanks to a deal with the remnant Nationals, must attract Green votes if it is to stay in office. As for the Greens, with two Federal senators, four State Upper House members (and official party status) and their first Lower House member in Fremantle, they are clearly in the ascendancy.

Government has always played a critical role in the development of WA, building necessary infrastructure, providing scientific back-up and actively promoting commercial development. The rise of national centralism has diminished the role of state governments to some degree, and the growing importance of huge firms like BHP-Billiton and Rio Tinto along with foreign investors like the Chinese and Russian governments present new challenges for local control over local resources.

In the past, state governments (at least since self-government) have been reasonably effective in maintaining a balance between the various interests driving development. However, in the last two decades a less interventionist approach became the norm as successive governments fell under the sway of the China-driven resources boom. It was just too easy to sit back and count the royalties as they rolled in.

The fast-emerging challenges to sustainable development in WA require a new level of engagement by government to assure not just adequate economic activity, but the overall survival of this highly vulnerable settlement. WA is still a huge, mostly sparsely populated place a long way from anywhere, and if costly fuel makes access difficult, the old problems of isolation will quickly reappear. Its economic mainstays - mining and agriculture - are highly exposed to fluctuating energy costs and overseas demand, and if these begin permanently trending in the wrong direction things look bleak indeed under the current policy orientation.

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About the Author

Dr Peter McMahon has worked in a number of jobs including in politics at local, state and federal level. He has also taught Australian studies, politics and political economy at university level, and until recently he taught sustainable development at Murdoch University. He has been published in various newspapers, journals and magazines in Australia and has written a short history of economic development and sustainability in Western Australia. His book Global Control: Information Technology and Globalisation was published in the UK in 2002. He is now an independent researcher and writer on issues related to global change.

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