CSIRO’s ludicrous 2050 Australian economic fantasy

I don’t mind a bit of hope. But that’s different to the complete rot that the CSIRO pumped out today:

The Australian National Outlook is a new initiative by CSIRO, which is intended to contribute to the evidence base and understanding required for Australia to navigate the complex and often intertwined challenges involved in achieving sustainable prosperity.

This first National Outlook seeks to provide a better understanding of Australia’s physical economy. It has a particular focus on understanding two aspects: The ‘water-energy-food nexus’ and the prospects for Australia’s materials-and energy-intensive industries, which account for one quarter of economic value and employment, but around three quarters of our use of energy, water and materials.

The National Outlook and science in general can contribute evidence and analysis to inform the national conversations. However it cannot determine the choices we have to make as a community. They will – and should – be shaped by our values and collective imagination.

While this outlook identifies national opportunities, achieving these benefits will require considerable further consideration and action. The investments and other changes required will not happen overnight. There is no overstating of the challenges for policymakers, industries and communities in navigating the transitions needed to secure our future prosperity.

Sounds good. Let’s see what it looks like.

Key messages and findings Australia’s choices will shape our prosperity.

Australia has the capacity to pursue economic growth, sustainable resource use and reduced environmental pressures simultaneously. Policies and institutions will be essential to realise Australia’s full potential and manage the associated trade-offs and risks. Australia can benefit from the positive outlook for our living standards and natural assets, while contributing to a secure and prosperous world.

Global demand for our exports is projected to treble through to 2050 as global per capita income also trebles. While we can be confident in some high level trends, such as long term growth of world energy and food demand, the risks and opportunities facing specific sectors of our economy are less certain. Demand for specific materials and energy exports will vary with international developments. Flexibility in the deployment of its natural and institutional resources will be needed for Australia to prosper across a diverse range of global scenarios.

Agricultural export prices are likely to trend upwards over coming decades reversing a long historical decline. Our analysis shows that Australia’s total output of food and fibre can increase – even in scenarios with significant shifts of land out of agriculture – if agricultural productivity growth is restored. However, we have not fully explored the complex distributional implications of these scenarios, and we do not yet fully understand the potential cascading impacts of future climate change and extreme events on farms, sectors, and regions. The scale and multiple complexities of these potential changes could raise unprecedented challenges for landowners and regional communities.

The future of our nation, industries and communities will depend on how we position for change, and adapt as the world around us evolves. In most cases, innovation and improving productivity are no regret moves that will help to create a better future.

Sustainability and economic growth can be partners not competitors.

Our research suggests that Australia can achieve economic growth and improved living standards while also protecting or even improving our natural assets. However this will not happen automatically. Australia’s economy is projected to treble by 2050, while national income per person increases by 12 to 15% above inflation per decade (assuming no major shocks) – with different choices about working hours accounting for two-thirds of the range of projected outcomes.

Energy and transport can remain affordable, with energy efficiency offsetting higher prices for electricity and fuel (including in low carbon scenarios), and better management of peak demand and improved electricity network operations and investment discipline could deliver further benefits. By 2050, electric vehicles and biofuels could reverse our mounting transport fuel imports, as well as reducing costs, improving air quality, and reducing greenhouse gas emissions.

Business, individuals, and government all need to be involved in lifting productivity and enhancing our shared social, economic and natural capital. Efficient and responsive institutional settings can turn challenges into opportunities, and have a vital role in managing tradeoffs and promoting longer term sustainability and prosperity.

Decisions we make as a society matter – and will shape Australia’s future more than decisions we make as businesses or individuals.

Policies and institutions are central to unlocking potential benefits and managing trade-offs and risks. Collective decisions account for 50-90% of the differences in resource use and natural assets across the scenarios in the National Outlook, resulting in synergies in some cases and trade-offs in others. Institutional settings are crucial to support the deployment of existing and new technologies that match our economic and environmental aspirations in energy, water, transport, agriculture and other industries.

Managing the water-energy-food nexus will produce challenges and opportunities for rural land use and communities. We can transform and enrich our economy and regional communities by meeting national and global food, fibre, energy, carbon sequestration, and conservation needs through new land sector markets, if we manage these transitions well.

While water use is projected to double by 2050, this growth can be met while enhancing urban water security and avoiding increased environmental pressures through increased water recycling, desalination and integrated catchment management. We find water demand and supply are shaped by complex interactions between food production, energy-intensive industries, energy and water efficiency, and new carbon plantings – all against a background of regional constraints on rain-fed water resources and a growing population and economy.

We can reduce our greenhouse gas emissions significantly through energy efficiency, carbon capture and storage, renewable energy, and land-sector sequestration. In the case of concerted global action on climate change, this could see Australia reduce its per capita emissions to below the global average by 2050, down from five times the average in 1990, while maintaining strong economic growth. Actual costs and benefits would be highly dependent on the details of domestic policies, and how these interact with international actions.

Australia’s ecosystems are unique and globally significant. At payments for carbon farming around A$40-60 per tonne of CO2e by 2030, carbon credits could be harnessed to reward landowners for restoring ecosystems, increasing native habitat by 17% and decreasing extinction risks by 10%, without large additional government outlays.

Here is the key assumption:

Global population is projected to rise by 14 to 56% by 2050, from 7 billion people today, in line with UN projections. However, the transformational shift will be the projected tripling (from one billion to three billion) of the number of people in nations with annual income comfortably above the World Bank’s 1.1 Projected global demand for our exports trebles to 2050 high income threshold of US$12,000 per capita (see Figure 5). As a result, the size of the global economy and its global demand for food, energy and energy-intensive materials is projected to more than double. Due to that demand, agriculture, energy commodities, aluminium and steel will remain important export earners for the Australian economy. Meanwhile, Australia’s population is projected to grow by 64% to reach 36 million in 2050 – a slightly slower rate than the four decades to 2010 (where population increased 76%), but still significantly higher than the global rate.

In short, Australia’s population skyrockets over thirty years along with global population growth. Sydney and Melbourne double populations to 8 million in thirty years. Although it took 220 years to accommodate 4 million, we’re going to do it again in 30 years as strain on the environment falls. Water supply is absolutely no worries as we double demand and rainfall craters with climate change.

Not only that, as coal exports collapse and we stuff in all of these new people, a relative shrinking income pie is miraculously divided into larger per capita slices. And while this income magic pudding manifests, we’re all going to work less as well! I’m also especially fond of the assumption of a high income economy in China, with its one trillion old folks earning $35k per annum each without doing any environmental damage at all.

Now let me tell you what this future is really going to look like. We know exactly what extreme levels of population growth do to the Australian economy because we’ve just run an sixteen year experiment in the same. Per capita GDP gets wiped out:

And without some 150 year mining boom in full roar, per capita income falls:

At least the f’wits that composed the report had the decency to draw a slower line of ascent for per capita income and GDP than the historical trend. But that is the best I can say for its attachment to reality.

The report is pure fantasy. If its assumptions about population growth locally and globally prove correct then Australia will be in a permanent state of class, borders, environmental and political crisis so extreme that it is difficult to see the nation holding together at all.

Sadly that does not fit the contemporary social justice mission statement.

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

Comments

    • DominicMEMBER

      Couldn’t agree more. F*tards every one of them

      And those population growth claims — what baloney. Did these tards miss the fact that there is only significant population growth on the Continent of Africa these days? China, Japan, Europe, even N America are very challenged demographically.

      • Lol. He sure has a broad smile in his Uni profile mugshot — doesn’t look like a guy who’s too concerned about AGW, I must say.

        That threat must be compensated for by all the cash and kudos he’s raking in for being an ‘expert’ on the subject.

        Ah, it’s good to be king.

    • That is exactly right: after Abbott & Pyne took away $200 milion/year from CSIRO (and gave those to school chaplains), the best people left the agency. The worst were made redundant. Alll that is left is just impotent mediocrity.
      That is, essentially, why the CSIRO “predictive model” predicts so well into Australia’s recent past and present.

  1. Your “uck” key seems to be broken on your keyboard. 🙁

    The language just isn’t the same without it.

    Firetr’
    Donald D’
    M’raking
    Good l’
    F’noodle

    Just not the same!

  2. “…Agricultural export prices are likely to trend upwards over coming decades reversing a long historical decline…”

    This too is based on “Chicken Little” assumptions about the actual agricultural producing capacity of the planet. The long historical decline is because so many of the developing nations have resolved their situations politically to the extent that they became able to feed themselves. The agricultural revolution helped too.

    Imagine the bread-basket of Africa getting back into production, possibly with Chinese “help”; and understand that Brazil is coming up right now as a major exporting power – and global warming may render a LOT of Russian territory productive – look at a map!

    • Yes, I can just see it.

      The graindole being reinstituted as Egypt swings back into full production, with Libya nipping at it’s heels.

      Who will be the latter day Augustus to oversee and govern this golden age?

      • Someone without the cringe of the post-colonialism west. A Chinese Augustus would be a good bet. Things are developing that way already, for those watching. And the Chinese aren’t much involved in Egypt and Libya, and these locations were never part of what was known as “the bread basket of Africa”.

    • good points all. The Black Sea area is caning us in wheat production atm. Breeding works and you don’t even need to understand genetics to do it.

  3. JunkyardMEMBER

    Just like the ABC, they don’t have a choice. It’s all aboard the big Australia train or the government cuts your funding.

    • Then Australians that understand the issue should be pushing for that defunding.

      Better to have no info coming out than lies the electorate believe.

  4. I think you’re right about their economic assumptions. They’re crap.
    But their science is good. Everything they said can be done, can be done. It almost certainly won’t because our politicians are rubbish at the moment.
    But that’s not their fault.
    It also should be said that because science makes something possible that doesn’t necessarily mean it’s the most desirable path.
    Definitely, the lowest risk path is to cut the population ponzi and work our way out of this mess.

      • Interesting, in some ways what you’re talking about is the re-birth of Trade Unionism, but without the Trade unions. How exactly can this happen, where’s the social cohesiveness to ensure that this “work” doesn’t happen without your participation and more importantly does this “Work” really need to be done at all?
        I’ve kinda come to the conclusion that Labour can’t be properly rewarded in asset Inflation adjusted terms if the work is of zero value. Like it or not that’s what we have in Australia we’ve perfected a system where the reward for our collective work product is indebtedness.
        This outcome is only possible if our work product has negative value, maybe we all need to start the ball rolling by discovering intrinsic value in our own work product. ….Just an idea…and maybe a rebirth for the Utilitarian school of consequentialism.

    • DominicMEMBER

      Yeah nah. Why don’t they just cut straight to the chase and say that Straya’s path to prosperity is via more borrowing and spending – both public sector and household. You see, the more you spend, the more jobs you create and the more jobs you create and the more the economy grows you create even more jobs, and so on. You end up creating your very own perpetual motion machine. It says so in the Bible of Keynes, so it must be true.

      (Oh, and don’t worry about the debt — it really doesn’t matter)

  5. We’re just lucky they were able to find a left handed mouse otherwise the report would be covered in it ’cause I know for damn sure what the right hand was doing.

    • Use the world’s biggest supercomputer to predict essentially straight or simple curved lines of complex/chaotic phenomena based on preconceptions. Science indeed.

  6. Stewie GriffinMEMBER

    CSIRO are being re-populated by the same Cultural Marxists globo-thinkers as has started to permeate many other Science based studies – it anyone follows astrophysics then they will know that now the Social Sciences have been completely dominated, this is the new battle ground for the left actually re-framing science and fact to accord with their social theory.

    The reality is that the world is at the Easter Island tipping point as we move from an economy based around abundant resources to once based around scarcity. The Hubble Oil peak is here and the rising instability around the world and many of the economic conundrums we are currently facing, eg the Bond Nuclear winter, all have their roots in the gradual changing of this equation.

    If Aust has a population of 35m in 2050 than any remote chance that Aust will be able to avoid the worst of the world of scarcity and be a life boat for the hope and stability perpetuating some small part of combined human achievement will be lost by 2100.

    • I agree Stewie. We have to accept that the pollies won’t save the planet, and our universities are more concerned with most social topics vs real education. It’s similar in the schools, but there is a push for STEM at least, but as any in industry will tell us there are few jobs for the grads as they go up against more qualified people. We can’t even discuss the issues so no solutions will be found. Australia is not going to fare well in the near and long term nor will most western countries as extreme neo lib and globalism still prevails, and you can’t quickly recover from the hollowing out of everything science. So we have a strong AI push coming and increasing global population with the planet dying from the excesses. The band aids won’t stop the final outcome if real change isn’t adopted, but personally I can’t see any real change. In 2008 there was a good opportunity, but the norm continuied and in fact got way worse …

      • Personally I struggle with the concept that this is a collective problem.
        If I individualize this problem the question than I ask Myself is: What can I do to be part of the Solution?
        I kinda believe that if more Aussies were asking themselves this question than there’d be less Aussies worried about their future. It’s as simple as Future-Proofing yourself which always translates skill wise into remaining Valuable.

      • Stewie GriffinMEMBER

        The report is pure fantasy. If its assumptions about population growth locally and globally prove correct then Australia will be in a permanent state of class, borders, environmental and political crisis so extreme that it is difficult to see the nation holding together at all.

        This is exactly what I have been saying, but suddenly it becomes a possibility…. really I question at what point do my fears tip over into being possible realities in other peoples minds.

        How many more culturally diverse immigrants and the insertion of Multicultural communities and their divided loyalties into Australia are needed before someone flips to the views I’ve been stating?

        100k?
        1 million?
        10 million?
        100 million?

        At what point do my supposed racist, white supremacist ravings become reasonable fears that other people who speak in more circumspect tones start to agree?

        Regardless, while I have hopes of one day being able to help shape public perceptions, I am at the same time taking private steps to anti-fragile proof my own future and that of my family, which involves getting out of Sydney.

      • @fisho.. I’m not sure what it is, but I made the decision a few years ago to be more self reliant, and that was partly out of the need to anyway, but also switch off from the madness and use all my time developing new skills. I’m way happier, and I’m never short of work to do, and seeing my food growing skills improve. I’m not self sufficient, but with more time I can be pretty close. I’m getting most of my s/w work overseas, and that’s worked well so far. I’m pretty close to going full hermit from mainstream, but still do charity to put somethuing back. I know individually I can’t do much, but what is is is much biggest than I expected. It really get exciting when you can get into a co-op.

        @Stewie .. the globalist rule, so like you I’m either off to the country here, or go back to the OS when I can get lots of work and buy a real cheap farm house and do my farmining self suatainable thing. That’s my future out of the gridlocked polluted city…I’m in Melbourne and I struggle daily to say, but have family commitments which will finish at some point, and then I’m off.

    • It’s not just astrophysics Stewie, it’s the same in my corner of STEM. I walk out of my office and there are literally posters for Marxism on the news boards, posted by management because they’re the only ones with the key to the cabinet. I can post you some pics on Twitter if you want. I participate in a little counter-propaganda here and there, where there are no cameras in the halls, but my posters are quickly ripped down.

      We have to attend mandatory social justice propaganda sessions to, for example, learn about our subconscious bias, toxic masculinity and white privilege. With the written and verbal rhetoric going around, sometimes it feels like I’ve parachuted in behind enemy lines. It’s only in engineering that I find a decent number of people saying F this, but even then they keep a low profile if they know what’s good for them.

      • Medio, you forgot to start your message with a recognition of the traditional owners from where you so type, past present and future.

    • I’ve looked into what it takes to start a party – fairly straight forward.

      Anyone else want to help start the Reduce Immigration Party with a focus on getting into the Senate, for starters?

      • Stewie GriffinMEMBER

        I’ve been thinking about the same. Been looking into Nigel Farage’s model that is built around Italy’s Five Star movement.

        This appears to be a very successful model in order to bootstrap a party up in short order.

  7. The CSIRO leadership has been politicised like much of the public service. Frank and fearless to accomodating and forelock tugging.

    • St JacquesMEMBER

      Precisely.
      The document is just RBA Future Boom mumbo jumbo dressed up as “objective science”.Dangerously hopium ridden garbage.

  8. So yes it looks like CSIRO has been captured. It would be worth looking at the similar document they out out 20 or so years ago- just before Howard opened the floodgates.

  9. So the best way is to pose a bank of questions they have no hope of adequately answering.

    That’s what separates publications like MB from MSM.

  10. This is where good economics can actually link in with good science. We know that the practical reality of the extreme growth economics that we are running undermines much of the scientific optimism here. This sort of report needs three models – optimistic, neutral and pessimistic. And we can all decide which one is more likely.

  11. Relevant StakeholderMEMBER

    So even in the ‘slow decline’ (as opposed to ‘outlook vision’ lol) we’re still going to grow GDP 130% while reducing emissions 10% from current levels? no sacrifice is required at all to solve an existential threat?

    Cool, I feel better now.

  12. What are they doing? Aren’t they supposed to be for scientific and industrial research?

    Oh, I know!! It includes financial engineering!!

  13. I thought this was gonna be the best nonsense…

    Efficient and responsive institutional settings can turn challenges into opportunities, and have a vital role in managing tradeoffs and promoting longer term sustainability and prosperity.

    Efficient and responsive institutions? LoLoLoLoL…WF? Like our Universities? And our government at all levels? And the CSIRO? FFS.

    But then I read this far more nonsensier nonsense…

    While water use is projected to double by 2050, this growth can be met while enhancing urban water security and avoiding increased environmental pressures through increased water recycling, desalination and integrated catchment management.While water use is projected to double by 2050, this growth can be met while enhancing urban water security and avoiding increased environmental pressures through increased water recycling, desalination and integrated catchment management.

    Water recycling, desalination and catchment management. Stone the crows and starve the fcuking lizards. Desal only works on the very fringiest coastal fringe. What about everybody else in this giant dry old country? How much sense would it make to pump desal water up the Blue Mountains to Katoomba, for example, let alone to Dubbo? It’s like they think the country extends only to Parramatta. And I believe Sydney’s current desal plant can supply something like 16% of daily requirements, so they better start building a few more pretty damn chop chop.

    And catchment management? What a joke. AFAIK, there are no plans to build more and bigger dams for Sydney, for example. And there’s not a lot of rain happening in the catchment that exists, while the population numbers skyrocket. More people consume more water, and all the catchment management in the world won’t be worth two knobs of goat sh1t if no actual…you know…rain falls in the catchment. Catchments are just paddocks of dirt without rain, and managing dirt won’t put water in a drinking glass.

    Warragamba dam represents about 75% of Sydney’s potential water supply and so is a a pretty good proxy for the whole system. I’ve started tracking the level in that dam. It’s currently at 53.7% full, down 1% from 54.7% on 29-May, and the level is dropping faster than a French rifle. Working out when the Dam will be just a mud puddle at that rate of decline is a pretty simple exercise that is left for the reader. It ain’t a long way away.

    I could go on and on. Absolutely premium bullsh!t, this.

    • bolstroodMEMBER

      No ,no, no….
      It’s all OK.
      This report is to make it look like the gutted and privatised CSIRO led by kingpin Marshal is doing something.
      Don’t you see,? It’s all for appearances.
      That what matters in Australia these days.

    • Excellent comment. The sociopaths at the top of our society are leading us into disaster and not just with respect to water. The people who wrote this CSIRO report must know how worthless it is. Junkyard summed up what must be their real motivation above: “It’s all aboard the big Australia train or the government cuts your funding.”

      • Cheers Tania.

        FWIW, Warragamba dropped by 1043 ML yesterday, which seems to be about average. Some days it gets up to 1500 ML.

        1043 ML represents approximately 417 Olympic swimming pools full of water disappearing from that single dam. Every day. Nobody is making much a fuss of it at the moment, but all those extra bodies in Sydney are slurping through the water at a mind boggling rate, and it just doesn’t look like there are the mammoth rain events coming up that are needed to replenish the supply. The place is going to be on severe water restrictions much sooner than anybody expects, but there’s a good chance that they will be far too little too late. Real economic and social Black Swan stuff.

        More detailed data at https://www.waternsw.com.au/supply/Greater-Sydney/greater-sydneys-dam-levels

  14. Thanks H&H I was in my happy place until you opened your big mouth & ruined my fantasy! 😂

  15. gibber_blotMEMBER

    The “f’wits that composed the report”??

    This blog is a place of excellent economic analysis, but the name calling of anyone who reaches a different conclusion is getting pathetic.