Australia’s Fires Test Its Winning Growth Formula


Prime Minister Scott Morrison, a conservative leader and political ally of President Trump, came to power in part by defending the mining industry. He sees action on global warming as a substantial threat to an industry that directly employs 250,000 Australians and contributes to the jobs of many more.

The fires have prompted a national discussion about climate change and the country’s economy. In addition to the personal harm and environmental damage caused by the fires, they have taken a toll on tourism, another essential industry for the Australian economy. Already, Mr. Morrison’s standing in public opinion polls is slumping because of his handling of the wildfires.

The fires “are going to have a massive impact politically,” said Peter Drysdale, a professor emeritus at the Australian National University who is one of the country’s most famous economists, and who has barely left his home in Canberra lately because of heavy smoke outside. “Only the most insensitive political system could not respond to this.”

Curbing Australia’s coal dependence would require tinkering with one of the world’s most successful economies.

Australia has not had a recession for almost three decades. While economic growth is slowing, with the retail and construction industries faltering, the mining industry remains a bright spot.

The Australian mining and energy industries have long benefited from China’s spectacular growth. China accounts for almost two-fifths of Australia’s exports. A vast fleet of vessels carries coal from northeastern Australia and iron ore and liquefied natural gas from northwestern Australia to Chinese ports.

Coal narrowly trails iron ore as Australia’s biggest export, with liquefied natural gas close behind. Australia’s combined exports of the three natural resources work out to nearly 7,300 Australian dollars, or almost $5,000, a year for every adult and child in the country, giving broad political influence to the mining industry.

“Our economy is vitally dependent on China, and yet our security ties are with the U.S., and our economy is vitally dependent on fossil fuels, and yet our landscape is relatively exposed to climate change,” Chris Richardson, the chief Australia economist at Deloitte, said.

Shifting the world’s 14th-largest economy would be no easy task, no matter how much the government might do.

Australia not only burns coal to generate most of its own electricity but also exports nearly $40 billion a year of the fuel, mainly to Japan, China, India, South Korea and Taiwan. Though China is by far Australia’s largest trading partner, Japan has long been its largest coal customer.

Opinion surveys in Australia over the years have found sizable majorities who favor action on climate change. But as in the United States with the Electoral College, Australia’s political system gives greater influence to some regions of the country than to others. One beneficiary is the state of Queensland, in the country’s northeast.

Queensland is Australia’s main coal-producing state. It played a key role when Mr. Morrison led his center-right coalition to an unexpected election victory in May.

Jervis Bay, a resort town between Sydney and Canberra on Australia’s southeastern coast, usually boasts beaches of soft white sand and seawater of crystalline clarity. On a recent visit, smoke shrouded the landscape, and the water was murky.

Business owners with fridges full for the summer season worry about the future.

Niel Badenhorst, a cafe owner, said that since the blazes broke out after Christmas, sales were down a quarter. The period around Christmas and January is normally peak season, he said.

“I was worried if the power goes I would have high losses,” Mr. Badenhorst said, adding that the cafe’s refrigerators were full of food that would spoil if extensive nearby power failures spread to his community and persisted.

“I hope it will open some people’s eyes,” he said of the government’s inaction on climate change. He mentioned wind turbines that he recently saw lined up along Germany’s coast, and asked, “Why can’t we do that in Australia?”



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