by Chris Harries
How will oil depletion affect the Tasmanian economy? Which industry sectors would be most exposed? What can be done to build resilience into vulnerable sectors? Are there opportunities for economic growth in a post carbon future? How can the state economy be geared to help protect the livelihoods of the Tasmanian people?
What we do know is that our economy is critically oil dependent. We produce no liquid fuels and import all that we use. If oil prices rise there will be a significant cost burden to the entire economy and to individual sectors.
Most exposed will be those sectors that are utterly dependent on oil – that is, those that rely on significant imports and exports of goods, those that have high fossil fuel inputs and those that rely on the movement of people. We could point specifically to agriculture, freight and tourism industries, but all sectors would be implicated in so many ways.
A comprehensive understanding of all such factors is required in order for responsive action to be taken but that should not stop decision makers from taking obvious steps to help build resilience into our state economy.
In the longer term, it will be necessary to foreshadow how the whole world economy will inexorably change in the aftermath of oil decline, because our own economy will be forced to adjust accordingly.
What does seem certain is that much of the thrust towards a globalised economy will retreat to some extent, as long distance transport costs may become prohibitive, and this may then alter the economics of local production. We may even see some restoration of localised production – especially of agricultural produce and some manufacturing – that has been whittled away during the past three decades.
Building resilience into the economy will have the spin-off effect of building resilience into the Tasmanian community. Being almost totally reliant on a fragile world economy will not be healthy. Goods and services that we rely on for our sustenance and livelihoods should be, as far as practicable, produced locally. There are inspirational efforts already being made in many areas of Tasmania to that end.
The Tasmanian government’s Oil Price Vulnerability Study will help to establish an information base that can answer some of the pertinent questions at the head of this page, but it is in the interest of all citizens and businesses not to sit and wait for government action, there are many steps that can be taken now to build opportunities and minimise risk.