Australia has one of the lowest levels of energy productivity in the developed world. We use more energy to make a dollar’s worth of gross domestic product than the countries we typically compare ourselves to. But while labour productivity, multi-factor productivity and the productivity of our ports elicit interest from our political and business leaders, wasting energy has never rated too highly.
The fact Australia has lots of coal, oil and gas is often used as an excuse for squandering it but as economists and politicians who pride themselves on their economic acumen should know, the fact you have lots of something doesn’t mean you should waste it, particularly when it is a finite resource. Obviously, the more we use something, the scarcer it becomes.
Like all scarce resources, fossil fuels have an “opportunity cost”. Every tonne of coal we burn is a tonne we can’t export to another country. Wasting coal by lighting CBD towers at night and oil by slowly commuting through traffic jams consumes resources that could be used for higher-value purposes.