It’s obvious to anyone who cares to look that the Adani rail-mine-port project is an environmental and economic disaster area, and that claims that it will generate thousands of jobs and billions of dollars in revenue are nonsense. But that’s little comfort to people in the region, facing high unemployment following the end of the mining boom and the general slowdown in the economy. What’s needed is a positive alternative, and a development strategy that’s adapted to the future rather than the post. Adani’s application for a $900 million concessional loan from the Northern Australia Infrastructure Facility to finance the rail component of the project raises the obvious question: if this money is available, what more productive ends could it be used for?
Farmers for Climate Action commissioned me to do a report on this, focusing on alternative investments in the agricultural sector. It was release at the weekend, and got some coverage, including in The Guardian. The report is here, along with a summary
John Quiggin 
‘Opportunity cost’ raises its rather handsome head, again. Economics 101, but why isn’t this question asked more often, and sooner? Too easy, too obvious?
The report only considers alternative investment in agriculture: fair enough, since it was commissioned by farming interests. One can also think of tourism and solar energy. The former may be a long shot in the interior, and the latter creates few jobs after the installation phase, but both are worth looking at. Solar electricity also has the potential to lower energy costs dramatically for remote farming communities, for irrigation, cool storage for crops, a/c for humans, and eventually truck transport to market.
Large-scale CSP is still very much an option for balancing wind and pv solar on a high-renewables grid, and it is more sensitive than PV to insolation. Inland Queensland looks a good place for it: you can presumably get even more sun in Northern and Western Australia, but they are very remote from centres of population. I assume CSP is slightly more labour-intensive and job-creating than PV because of the more complex technology.
Re Adani (JQ report page 7): “the corporate restructuring is designed in such a way as to allow part of the Adani Group to fail without exposing the Group as a whole to unsustainable losses.” Quite so. But on the no-free-lunch principle, building corporate bankruptcy firewalls between the components of the Adani group should increase the risks to bank lenders and bondholders, leading to more scrutiny and higher interest rates for the weaker members like Adani Mining.
The even more outrageous Foxconn deal in Wisconsin leads to the thought that we are seeing the emergence of a new form of political economy, Sucker Socialism, in which taxpayers assume al the risks, put up all the money, and get none of the profits. All in the name of a handful of Real Jobs (that is, semi-skilled jobs for poorly educated white men).
A nice and useful name, James – “Sucker Socialism” goes along nicely as a companion to “Crony Capitalism”. It’s a nice name, too, for all those dodgy privatisations.
Of course SS is only a consequence of CC in politically democratic countries, where it is necessary to sucker the rubes. In other places the rubes’ opinions don’t enter into it.
At last a detailed well presented response to the job creation mantra and dodgy stats associated with the Adani juggernaut. As commented earlier, this report deals mainly with projects associated with agriculture. Imagine what job creation is possible with a similar focus on investment in tourism and clean energy. Just one question though ? What sort of a run did Quiggin’s proposal get in the Courier Mail or any of the other Murdoch owned provincial dailies in central and north Queensland ?
John although I haven’t read the report in its entirety, I would have thought given the lack employment an economic opportunities within the region, the Queensland government would have chucked their lot in with the National Trunk Rail.
For those of you who are unfamiliar with NTR, it’s a proposal by a Brisbane based consortium and the eminent Ken Davidson to establish a freight and high speed rail network the length and breadth of Australia, see: http://nationaltrunkrail.com/
66 jobs during the operational phase of Adani!!!
That is about the same number as an average McDonalds franchise (that cost about $1.5 – $2.0 million to set up). And just think of the long-term flow on employment benefits in the health sector!! Perhaps the Coalition should develop a regional fast food strategy…..
But seriously, the region has little (if any) competitive advantage in agriculture outside beef production and associated inputs (e.g. irrigated fodder and feedlots). Granted there are niche exception, but Governments are typically a hindrance to niche developments. If the focus must be agriculture, a better way to spend the money would probably be on intensifying beef, while accounting for climate change and reducing secret loss onto the GBR at the same time.
Algae-based bio-sequestration of CO2.
This easily fits the rubric of agriculture (strictly ‘aquaculture,’ but anyway), can be carried out on land available, benefits from high insolation and proximity to stable and already excavated geological strata, is relatively low tech — allowing semi-skilled folk to participate, would require only limited if any imported products, can make use of strong supplies of organic waste locally meets a need for carbon offsets (both locally and internationally), and is easily scaleable. Indeed, given the lipid content in algae, one can even derive non-petroleum-based polymers from them for packaging.
What’s not to like?
Having been back and forth to NQ for some time I would say that the alternatives are meagre, the climate and the distance make it a great destination for winter holiday makers, and grey nomads, and not much else. They’ve introduced the hardy droughtmaster cattle but nobody owns up to eating them – they seem destined for sate and rendang markets further north.
Given the resources the current population seems excessive, those pumping (or pimping) up new mines don’t guarantee longevity and the landscape of FNQ is dotted with ex mines.
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