More than 5000 jobs and $705 million in wages will be lost from the Hunter without investment in new employment and industries over the next two decades, a new report arguing for the need transform the Hunter’s economy away from reliance on coal has warned.
The analysis report “Weathering the Storm: The case for transformation in the Hunter Valley”, models the effect on the Hunter’s economy of a 55 per cent contraction of the coal mining industry by 2040.
It argues the Hunter’s economic future is “intimately bound up with global efforts to prevent dangerous climate change.”
It notes that coal mining contributes 58 per cent of the economic output of the Singleton and Muswellbrook shires.
“This makes the two shires vulnerable to changes in coal demand and markets, particularly in Asia, where close to 90 per cent of the coal mined in the Hunter Valley is burned. For example, when coal demand and prices fluctuated from highs of $166 in 2008 to lows of $83 in 2014, employment in the coal mining industry fell by 25 per cent in the three years to 2014,” the report says.
Commissioned by Lock the Gate and written by University of Western Sydney Senior Research Lecturer on Corporate Social Responsibility and Sustainability Neil Perry, the report draws on modelling by the International Energy Agency that shows the scale of the contraction needed in thermal coal consumption globally to meet the Paris Agreement goal of limiting global warming below two degrees.
“Of course, the International Energy Agency provides other examples of possible future coal production levels and the mining sector may focus on those more favourable predictions. However, given the Australian Government’s commitment to the Paris Climate Agreement and sustainable development goals, it would be strange if they act on the basis that these agreements would not be met,” Dr Perry said.
“Acting on the basis that they will be met requires strong transition strategies for the affected region as covered in the report.”
The report also models how a proactive transition process would result in the creation of 595 more jobs than would be lost from coal mining in the same period. At the same time, local wages and salaries would increase by $315 million in 2040.
This scenario would require significant diversification through building on the region’s existing strengths in the agriculture, wine-tourism and manufacturing industries.
It would also capitalise on the strong skills base of machinery operators and drivers, technicians and trade workers.
In order to achieve this best case scenario the report recommends an independent transition process to ensure resources are invested in the public interest to aid transition in both the electricity and mining sectors; support and subsidies for renewable energy growth industries; support for the development of an environmentally responsible container terminal; collaboration between the state government, AGL and mining companies to ensure investment in renewable energy and to ensure mine site rehabilitation takes place; a review of all exploration and mining titles and the cancellation of titles that deter investment in sustainable rural industries.
“There is hope, but we need our politicians to be upfront with the public and to provide support to start diversifying the economy now,” Lock the Gate spokeswoman Georgina Woods said.
She said previous examples of rapid structural adjustment around the world and in Australia had shown it was crucial to acknowledge and prepare for change in advance, and for governments to provide substantial financial support to affected communities.
“Our elected representatives need to be up front with residents - the time to diversify our economy is now. If we fail to do so, it will be at our peril,” she said.
“The community has been calling for a plan to diversify the Hunter and prepare for coal’s decline and this new analysis confirms that is the only path that can protect the Hunter, it’s workers and communities.”