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The Forum > Article Comments > Cost of living just the symptom > Comments

Cost of living just the symptom : Comments

By John Coulter, published 12/4/2012

Living costs are rising faster than inflation because of a failure to deal with the underlying causes.

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It's very hard to find fault or flaw in this article. Moreover it's hard to disagree with or dismiss the basic premise.
We do not need population growth to stimulate the economy. We just need to reduce and eventually eliminate poverty in all its forms and guises to provide endlessly sustainable economic stimulus.
We need to invest in our own people and their better ideas. We need to step back from this seemingly mad rush to rip all our mineral wealth from the ground; but particularly, when we could achieve even more wealth creation and well rewarded jobs of a much more permanent nature, by recycling stuff currently poisoning groundwater/landfill.
Or flowing wastefully out to sea, damaging the marine environment, with a nutrient overload; all while our land starves and we import ever more expensive hydrocarbons to convert to nitrates etc, utilising scarce potable water supplies.
We don't have adequate infrastructure for the current population. Great for some who like Sydney property developers; see a very rosy future for themselves cramming people into smaller and smaller spaces; that simply cost more and more.
Why, when we already have the highest median house prices in the English speaking world.
We are a net exporter of energy, yet we pay well over the odds in comparison to another large country confounded by the tyranny of distance, America, which still imports around 20% of its fuel/oil requirements. We have abundant NG supplies, enough to last over 700 years if properly husbanded. Hardly a single vehicle currently plying our road or rail systems cannot be converted to run on CNG. One cubic metre of NG has the same calorific value as a litre of petrol, and can be supplied even with a fuel excise added; for around forty cents per cubic metre retail.
Finally, and this is, I believe, the true nub of the problem under discussion, we regularly elect clueless, incompetent or incredibly inept people, whose knowledge of economics and multi billion dollar budget management could be written on a postage stamp, using a crowbar for a pen. Rhrosty.
Posted by Rhrosty, Thursday, 12 April 2012 10:38:04 AM
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What a great article, further to the Oz-centric discussion, the issue of global carrying capacity is one that is fraught with all sorts of technical, scientific and philosophical problems. But the best effort to deal with these various problems and come up with concrete numbers is the one that has been carried out by Mathis Wackernagel who came up with a concept called the global ecological footprint.

In its essence, it converts all of the energy and materials that humanity uses every year from non-renewable sources [such as oil] and makes the assumption that somehow they would come from renewable sources [such as wood or the sun]. Then, it compares our current consumption with what the earth could generate.

The reason we are able to go over the carrying capacity briefly is the same reason that you can for a brief period spend more out of your bank account than you save, if you have come through a long period of thrift. But eventually, of course, you bring your bank account back down to zero and you’re stuck.

That is exactly what is happening to us on the globe. We are living off the savings of biodiversity, fossil fuel accumulation, agricultural soil build-up and groundwater accumulation, and when we have spent them; we will be back down to the annual income.

Sustainable development is an oxymoron. It probably was possible back in the ’70s, but not now. We’re at 150 percent of the global carrying capacity.

We are in an absolute bubble, a bubble in population and in material and energy consumption.

We need to focus our energy on coping with the permanent loss of cheap energy or the permanent change in our climate and what we can do at the individual, the household, the community and the national level to ensure that we will be able to take care of our basic needs.
Posted by Geoff of Perth, Thursday, 12 April 2012 11:06:48 AM
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While this article is about population growth I noted its implications for the Carbon Tax (CT). Given the evidence cost of living is rising at the rate it is, citing ‘electricity prices had risen by 32 per cent in real terms between 2007 and 2010 ''well ahead of the general increase in prices and faster than growth in the average wage''’, question must be raised in relation to what the CT is about.

If the CT is a market tool to prompt consumers to change behaviour then why hasn’t the “electricity prices had risen by 32 per cent in real terms” already achieved that? If one believes in markets then all the signals needed are already in place to change behaviour.

In addition to the rises in cost of electricity there are already cost advantages of gas fired generation over coal; if markets are so effective why aren’t stations already being converted to gas? The cost of replacing coal firing of boilers with gas is about 20% of the capital value of the plant.

If the CT is an income stream what is it being used for and what justifies that use?

In terms of the main point of the article the failure of governments to plan long term is becoming apparent. But the catch 22 for government development of much infrastructure becomes self defeating. Construction of roads generates additional demand. London has realised using both congestion taxing and reduction of capacity is controlling traffic.

The other planning issue is lack of creativity – construction of power stations in the middle of cities to utilise co-generation (electricity and heat that both cools and heats buildings) as well as reduce the 20% power loss in transmission needs to be considered. The other is the absurdity of diseconomies of scale of large cities, companies should be placed where it is economically wise not where executives want to live.
Posted by Cronus, Thursday, 12 April 2012 12:21:21 PM
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Cronin, I suspect the carbon tax WILL change behaviour though it is strange that the prior price rise has not. But there is also a matter of principle - we have to send a message somehow that we must mitigate climate change, otherwise we will have an unliveable planet. As Sir Bob Watson said at a conference in London a fortnight ago: we're going to pass two degrees and we may go to five degrees. Given that at 5 degrees you get the release of methane from the tundra and from methane clathrates in the oceans that will add another five degrees warming, you can kiss the planet as we know it goodbye.
Posted by popnperish, Thursday, 12 April 2012 12:35:17 PM
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Rezoning and development approvals by Local Government becomes very lucrative and corrupt with high population growth. I remember one guy who owned a few acres in a coastal town. He couldn't get his block rezoned for subdivision so he decided to sell. But he found out that the buyer was an entity with a few councillors as silent partners, and the gossip was that they intended to profit greatly from the purchase by rezoning it. So he spilled the beans to the media and the councillors retaliated by subjecting his block to a nature rezoning, which effectively stopped any chance of developing his land.

Severe restriction of development rights of property owners and an obscure development process are important parts of the corruption, but the main driver is population growth.
Posted by Fester, Thursday, 12 April 2012 2:07:46 PM
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A real economics textbook: one written by people who understand and respect physical limitations is the book, Ecological Economics, by Herman Daly and Joshua Farley, and it states in its Note to Instructors:

…we do not share the view of many of our economics colleagues that growth will solve the economic problem, that narrow self-interest is the only dependable human motive, that technology will always find a substitute for any depleted resource, that the market can efficiently allocate all types of goods, that free markets always lead to an equilibrium balancing supply and demand, or that the laws of thermodynamics are irrelevant to economics.

Sounds logical to me!
Posted by Geoff of Perth, Thursday, 12 April 2012 2:14:23 PM
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