This week Australia signals to the rest of the world that we, the largest per capita emitters of Co2 emissions amongst the advanced economies, are prepared to play our part in tackling climate change.

The AMWU always puts the interests of our members first. We know there are lots of opportunities for new jobs manufacturing the clean technology and energy efficient products that are in demand as the world’s economies get cleaner. But there also concerns about how a price on carbon might affect businesses today. We have done our own checking and the results are not as scary as is being made out.

The fact is costs for business are always rising. In the last 12 months, our union has negotiated wages increases for our members averaging between 3.5% and 4.5%. Each and every year, wage costs for businesses rise. They don’t go broke.

We compared wage rises to the likely rise in electricity the carbon price will cause. Take the printing industry for example. According to the ABS, the total wages bill of the printing industry is 24.6% of sales and service revenue. According to the Printing Association, the electricity bill for the industry ranges from 0.4% of revenue to 1.3% of revenue.

So take a printer with sales revenue of $25 million, where the wages bill is 24.6% of revenue ($6,150,000) and the electricity bill is 0.85% of revenue ($212,500). At $23 a tonne the firms electricity bill will go up around 10% if it doesn’t become more energy efficient (an increase of $21,250) That is equivalent to a 0.35% wage increase. Last year, wages increased by ten times that and the printing industry did not go broke.

A longer term view shows that the government’s plan to price carbon and fund new technology will have a positive impact on our manufacturing sector and the jobs it provides. The benefits of getting our economy on the path to using energy more efficiently and generating electricity more cleanly will outweigh the initial costs.

The legislation that passed through the Senate this week will do four important things.

First by putting a price on carbon now and commencing a long term, gradual and predictable reduction in budget fossil fuel subsidies we are making old fossil fuel intensive technologies more expensive. At the same time, public funding for basic, applied research, experimental development, demonstration and early stage commercialization on a new generation of emission reduction technologies reduces the time cost and risk of getting these technologies to scale and into the market. This is what the economics of climate change is all about.

Secondly the legislation provides special assistance to steel and other trade exposed emission intensive industries to adjust and protect jobs; and it provides additional support to help industries like manufacturing invest in more energy efficient plant and equipment to reduce their carbon footprint and their long term energy costs. This support package also helps protect the purchasing power of low and middle income families with an assistance package of tax cuts and social wage increases.

Thirdly by acting now we have the opportunity to create new industries and jobs in clean technology. Broadly defined the cleantech/environment industry is estimated as a $6 trillion global industry. This is a game changing opportunity for Australia’s manufacturing industry and for many of our service industries. With the combination of a price on carbon, incentives for new clean technologies and appropriate polices to ensure high levels of Australian industry participation we can create thousands of new jobs and build a cleantech industry of substance in this country.

Fourthly by acting now are we are taking out an insurance policy for the nation against the threat of carbon tariffs and other penalties being imposed on us by our trading partners in the future. To say no and threaten to roll it back  puts thousands of Australian jobs at risk and threatens to push electricity costs far higher then would be the case under a gradual, predictable increase in the price of carbon. To stand still and deny the need to price carbon or even the existence of climate change is a recipe for disaster. We will be forced by the rest of the world to do far more over a much shorter time period of time which will undermine the job security of workers in existing industries and send offshore the jobs from the high growth cleantech industries of the future.

Legislating Australia’s carbon pricing regime this week still leaves important issues to be resolved. We need to ensure our existing manufacturers become more energy efficient and can access the funds to diversify into the new opportunities.  We need to ensure greater collaboration between our engineers and our universities and science agencies that develop the new technologies and our manufacturers and service providers who can make it here. We need to export and attract new global investment to  be part of the world cleantech industry which means making sure we have the right support programs and delivery agencies that work together rather then doing their own thing in isolated silos.

 Much remains to be done to create jobs and build a new cleantech industry in this country and I’m encouraged that this issue is central to the terms of reference of the PM’s manufacturing taskforce.

Dave Oliver
AMWU National Secretary