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The Confessions of a Conservative Environmentalist

Most of us when we are younger are more idealistic. We see the world embodied in a framework of rights and wrongs, black and white with very little grey! With little understanding of how the world works we believe our idealistic stances will change everything and then all will be well.

I was little different. In my early twenties I joined the Littoral Society. Like most idealists my motives weren’t entirely idealistic. As a keen fisherman I was concerned about the degradation of the coastline, the impacts of overfishing, the pollution of our rivers and the damage done to our mangrove swamps and estuaries. In time the Queensland Littoral Society morphed into the Australian Marine Conservation Society.

At the same time I was moved by the plight of people in the developing countries who were desperately poor, with poor hygiene, inadequate food and polluted water. I contributed to organisations that purportedly improved the lot of such people and I remember railing against pet owners who spent large amounts of money on their cats and dogs when people were suffering inordinately.

One of my more significant early career moves was spurred by this idealism. I was a young engineer but I was more interested in people than plant and equipment and consequently wanted to escape into management, even though at this stage I had no idea about what management entailed. But management opportunities arose in power stations. I chose to begin my management career in a hydro power station because of my environmental concerns. Today even hydro power stations are abhorred by environmentalists because of the impact of dams on the natural water flows of rivers. But in my youthful idealistic mind I could make a better contribution by improving the management of a hydro power station than a coal fired one. In my environmentalist zeal I even became an Honorary Fauna and Flora Protector!

When I felt my work was done in the hydro power station I looked around for other management opportunities. The only option I now had was to manage a thermal power station. Could I put aside my environmental idealism to take up this challenge? In the end I did so because the enterprise had been so poorly managed that the welfare of the people working there had been compromised. So here I was managing a coal fired power station. How could I reconcile that with my ideals? Well after some consideration it seemed apparent that coal in Australia was a relatively cheap fuel and into the foreseeable future it was unlikely that we could do without it. So now my environmental idealism was becoming compromised with my concerns about the economy and the welfare of workers.

I had by this time earned a degree in Economics, but being disillusioned to some extent by both Engineering and Economics began to read extensively in the fields of psychology, human relations and management. Despite this my environmental ideals were quite strong and where possible I ensured the enterprises I ran paid due attention to environmental outcomes.

I subsequently managed a number of new power stations. As community standards were improved we had to work harder at environmental compliance. But with an idealistic young workforce, supported by my own beliefs, compliance was not enough. We tried to do as well as we could within our economic capability. We also had the perverse belief that if we could raise the environmental standards, we were setting new targets for our competitors virtually keeping them playing “catch up”.

Finally, my management career culminated in my being appointed as CEO to Stanwell Corporation. After a board retreat focussed on strategic planning, we committed to pursuing renewable energy developments. Of course without some assistance it was difficult to make renewable projects stack up economically. We initially were able to commission a couple of mini-hydro schemes, a couple of windfarms and a biomass plant. We were also exploring gas fired plant. Gas powered plant reduces considerably less emissions than coal and was, we felt, an appropriate transitional technology.

We began lobbying the Federal Government for a Renewable Energy Target. This was subsequently legislated in 2000. The Legislation has been subsequently superseded but being able to sell renewable energy certificates to retailers opened up more scope for development. Unfortunately after I resigned from Stanwell a year or two later, the Stanwell Board opted to stick to conventional technologies and greatly curtailed their business development efforts. But for a time Stanwell was one of the main proponents for the development of renewable energy in Australia.

Renewable technologies are far more expensive than coal fired generation. Consequently the shift to renewables has had an impact in raising electricity tariffs. Probably the biggest distortion has come from domestic photo-voltaic installations. Householders have been offered very attractive feed-in tariffs for their output. It has had the perverse effect of greatly reducing electricity costs to wealthier households that can afford such installations but raising tariffs for poorer domestic consumers.

At this time I was also invited by the Industry Minister, Nick Minchin, to be part of a working group advising the government on the opportunities for developing renewable technologies in Australia. We made recommendations to the Government that there were considerable opportunities in establishing an industry based on renewable technologies..

During the early years of my tenure as CEO of Stanwell I was approached to chair the board of the Institute of Sustainable Regional Development based at the Central Queensland University, an invitation which I duly accepted. Shortly after, the Director of the Institute resigned to go elsewhere. In due course he was replaced by Professor Bob Miles. Among the research interests of the Institute was climate change. We analysed the streamflow and temperature data and became convinced that a significant change had occurred since the mid 1950’s on Australia’s eastern seaboard with streamflows reducing and temperatures increasing.

In climate terms the data we had was of course limited. In general there was probably not more than a hundred years of reliable records which constitute a very brief snapshot of climate experience in Australia. But Bob took a very pragmatic approach. He was regarded as something of an expert in this field and spent considerable time educating industry in general but particularly primary industry about the concerns of climate change. Whilst supportive of efforts to reduce our carbon footprint, Bob argued that the more important response was adaptation – being ready to face a future where temperatures might be higher and rainfall less. In this regard Bob was very level-headed and instead of railing against climate change, focussed us on how we might accommodate it and ensure its impact on regional economies was minimised.

I thought this was a pretty wise response. Whilst Australia is a large-scale emitter of greenhouse gases on a per capita basis, our total emissions are still very minor compared with many other countries. Therefore Australia acting alone can only have minimal impact.

The difficulty of getting international consensus particularly with developing countries was brought home to me by our dealings with the South Koreans. We had a contract to supply electricity to the Sun Metals Zinc Refinery in Townsville. This necessitated going to South Korea for contract negotiations with the Korean owners. They were curious about our move to renewable energy and asked the rationale behind it. We said we were anticipating a move to renewable technologies in response to concerns about global warming. Their reaction was that the notion of global warming was propaganda being promoted by western developed nations to prevent developing countries attaining our standard of living! And while they were wrong it should be conceded that any effective response to global warming will inevitably lead to a change in the wealth distribution around the world. What’s more it is easy to understand their misgivings.

So, if I pause and consolidate, I would summarise my position as someone who is concerned for the environment and the likelihood that climate change will impact our way of life. But I am also aware of the economics involved. Consequently I believe our response needs to be measured. The more radical environmentalists seem to espouse that the environment should protected and restored at virtually any cost.

It was for this reason that I was disappointed at the reactionary response to the Government’s proposition that the University of Western Australia should host a research centre headed by the Danish intellectual, Bjorn Lomborg. Contrary to what many believe, Lomborg is not a climate change denier. He merely proposes that the international community should maximise the return on its investment. He points out for example that expenditure on carbon reduction strategies does not provide the utility that investments in alleviating world hunger and promoting universal education do.

It is unfortunate that our more radical environmentalists believe that our environmental dilemmas are overwhelmingly the planet’s greatest concerns. They are important but there are many other issues as well and Lomborg is right that we should weigh our investment options carefully to gain the greatest benefit.

Another problem that I have encountered with the environmental movement is that they are often so idealistic that they seek for perfect solutions and thus often prevent a lot of good things from happening.

Let me give you an example. In the late nineties at Stanwell we were seeking opportunities to develop cogeneration projects with sugar mills. When sugar cane is processed the juice is extracted from the cane leaving the fibrous organic material which is commonly called bagasse. The bagasse is then used as a fuel to fire boilers to make steam which is used in the refining process. Most mills have surplus bagasse to their needs and as a result they often have inefficient boilers. By improving the thermal efficiency of their processes there can often be substantial capacity to raise more steam for power generation. We worked for some time with the Maryborough sugar factory to put a cogeneration package together. One of the problems encountered in such projects is the inherent low capital productivity. The sugar season is limited and even with storing bagasse it is difficult to run the plant for more than six or seven months of the year. The economic justification of these projects is enhanced if supplementary fuels can be found so that the generation plant can run for longer periods. At Maryborough we thought we had the ideal solution. Quite close to the sugar factory there was a timber mill which routinely disposed of large quantities of sawdust by burning it in pits. This sawdust was a very good supplementary fuel which would have enabled the generation plant to be run for twelve months of the year and would consequently have been profitable enough to warrant our investment.

On hearing of our proposal a prominent environmentalist approached the Labor Government and argued that such an arrangement would only encourage the sawmill to log more native hardwood. The Government consequently intervened to prevent us progressing this project. This was despite the fact that the local economy was at a low ebb following the closure of the Evans Deakin foundry located there and this project would have provided jobs and also help sustain the sugar factory in the long run. And they seemed oblivious to the fact that the sawmill would continue to burn its sawdust, adding to the carbon accruing in the atmosphere. If our project had gone to fruition it would have displaced coal-fired generation elsewhere in the State with a net reduction in carbon emissions. This all seemed to me to be a very poor environmental outcome!

Another issue I have with the more ardent environmentalists is their propensity to catastrophise. Many of the more dire predictions about climate change have failed to materialise. That has provided a platform for the naysayers to discount climate change. That is unhelpful. In their attempt to alarm people they have managed to alienate many in the population. When people take extreme points of view it is difficult to have a rational debate.

So how might I describe my attitude to environmentalism? It would be fair to say that it is neither one of despair nor of complacency. I don’t have the single-minded zeal and fanaticism of many environmentalists largely because I can’t accept that preserving the environment is the only issue of consequence facing modern society. But on the other hand we will be doing successive generations a great disservice if we don’t deal wisely with the degradation of the environment.

(PS. I know many environmentalists take up their cause with religious zeal but for heaven’s sake would those of you who are Catholics petition your pope to stick to his knitting!)

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  1. 1 Comment(s)

  2.   By lynda dowling on Jun 28, 2015 | Reply

    Excellent Ted – well said.
    It reminds me of a quote –
    A man who has not been a socialist before 25 has no heart. If he remains one after 25 he has no head. — King Oscar II of Sweden.

    It concerns me greatly that the Greens global movement focuses on carbon emissions – and taxing energy to solve the so-called climate warming problem, denying those in developing worlds the opportunity to begin a more civilised lifestyle due to increased energy costs.

    I think the problem of dense population should be more the concern, the carbon emitters, rather than carbon emissions. Nobody seems to be talking about that, particularly the Pope who encourages his flock to go forth and multiply.

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