Asia needs a clamp on consumption

Chandran Nair
The Age

The region will soon have to find a sustainable path, writes Chandran Nair.

AS AUSTRALIANS vigorously debate the issue of a carbon tax, they should take a minute to ponder the huge challenges facing Asia. After all, this is the region that has propelled - through its thirst for resources - Australia's prosperity. It is a delicate decision, to be sure.

Asia, on the other hand, faces a starker choice. It can pursue the consumption-fuelled capitalism that has driven much of world growth in the past few decades, driven in no small part by Australian fossil fuels and other resources. Or it can take a deep breath, change direction, and find a genuinely sustainable path.

Under the economic orthodoxy that held sway until the global financial crisis, the region had no options. Intellectually subservient to Western ideas, countries had to follow the "Washington consensus" - of ever-freer markets and ever-shrinking governments.

But it is now clear there must be alternatives, even if many are in denial. If Asia follows the Western route of ever-expanding private consumption, the world faces a bleak future. Australians are lucky to have the luxury of ignoring this dilemma but on the other hand may want to grasp the opportunity to act responsibly. This is a choice needing a mature political debate.

In Asia, governments should stop waiting for the West to set the agenda. Instead, they should each stand up and take responsibility for their own futures, accepting that it is they alone who must set the parameters for what happens within their borders and there is much they can get started on.

To guide them, they must accept the scientific evidence that resources are constrained, that their use must be shared equitably between current and future generations, and that repricing them through emission and usage taxes is the key to producing sustainable economies and fairer societies.

To some extent this is already happening. China has started to explore carbon and resource taxes. It must adopt these, as must India. Both must also ensure their farms remain labour-intensive, forgoing the industrialised, energy and chemical intensive practices of Europe, America and Australia.

If adopted on a broad enough scale, such measures alone would go a long way towards ensuring that local businesses are forced to redirect their efforts towards developing low-energy, low-carbon goods and services.

Activities that now are subsidised because of the exclusion of their environmental and other long-term costs, such as private car ownership and meat consumption, would become far more expensive.

But in compensation, societies would not only be fairer, but real prospects of improvement would be offered to the billions of people marginalised at present - the less well off, especially farmers and other countryside dwellers. This is central to tackling the issue of poverty and thereby affording greater legitimacy to governments.

While taxes would be high on energy (and resource-intensive activities) and possibly on financial transactions, too, certainly where they contribute to economic activity that promotes unsustainable economic activity, they could be slashed on salaries, particularly for those on low incomes.

To adopt such policies, strong government will be needed. But there is no reason why freedoms should be restricted, or why governments need necessarily be bigger. Their task would not be to run their economies directly, but to redirect them away from the free ride much of business has been given in its use of the environment and resources and their effects. A more honest debate needs to take place in Australia, especially in the mining sector.

Technology will have a role, but it cannot be Asia's saviour alone. It, too, will have to be redirected, from producing more iToys and towards finding ways of minimising our environmental footprint. Research should be directed towards developing smart public transport, efficient water management and farms that produce high-quality food.

Incentives must be put in place that encourage resource conservation/avoidance, reuse of materials and the recycling of products, and that also integrate cities with their surrounding countryside without calling for massive programs of urbanisation.

Instead of encouraging greater individual consumption, the governments of Asia must use the tools they already have at their disposal to reshape capitalism and give form to a new set of economic incentives that emphasise sustainable development.

If, by 2030, a new model of development can be found that allows the people of China, India and the rest of Asia simultaneously to prosper and minimise their environmental impact, then the future may not be bleak.

If no such alternative is adopted, and instead growth is pursued on a rising tide of consumption, then we must say goodbye, not just to the goal of achieving prosperity

for all, but to achieving any form of prosperity at all.

Taking these measures will upset many. Not just those companies and countries with huge vested interests in today's model of economic growth, but the billions of Asians who have been told that they too can aspire to a Western way of life.

Yet, if the countries of Asia are to have viable futures, change must come. Governments, citizens and companies must accept the resource and environmental constraints that confront them - and fast.

Even in the "lucky country", the debate about a carbon tax should not mask the real need for constraint on consumption.