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Research as a Form of Infrastructure By Geoff Edwards President Royal Society of Queensland 13 June 2014.

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Presentation on theme: "Research as a Form of Infrastructure By Geoff Edwards President Royal Society of Queensland 13 June 2014."— Presentation transcript:

1 Research as a Form of Infrastructure By Geoff Edwards President Royal Society of Queensland 13 June 2014

2 One Point Two I blinked. Had I misread the decimal point - was it 12? No, the benefits of upgrading the Pacific Highway from Newcastle to the Queensland border are estimated to outweigh costs (benefit-cost ratio BCR) by a factor of only 1.2. Cost - $5.6 billion. Little better than the benefit-cost of the failed Airport Link Tunnel – estimated in 2006 at 1.1 even using traffic projections that turned out to be wrong by a factor of more than three.

3 Benefit-cost analysis  Benefit-cost analysis is replete with assumptions and approximations, but it is the orthodox tool that promoters of transport infrastructure use to justify their projects – if BCR is greater than 1, it is claimed that the project creates economic value.  So we are entitled to apply it test these claims compared with BCRs of alternative uses of public funds.

4 PM Announcements Around budget time 2014: Brisbane Gateway Motorway upgrade $1 bn – BCR 4.9 Duplicate Pacific Highway NSW $5.6 bn – BCR 1.2 * West Connex Sydney $1.5 bn – BCR 1.5 * Package of other roads in western Sydney – $3.5 bn * East West Link in Melbourne – $3 bn – BCR 1.4 * Did not appear on Infrastructure Australia’s 2013 list in the top two levels of priority. Infrastructure Australia was established to advise the national government on prioritising hard infrastructure !

5 Infrastructure Australia’s 2013 List Brisbane Cross-River Tunnel $4.4 bn – BCR 1.34 Pacific Highway upgrade NSW $6.4 bn – BCR 1.2 Melbourne Metro $9-11 bn – BCR 1.2 Oakajee Port WA, mainly for iron ore $5.4 bn – BCR 1.2 More than $26 bn of projects in the two highest priority categories have a BCR lower than 2.0.

6 Three Forms of Infrastructure “hard” or “economic” infrastructure such as roads and ports – mostly entrenching consumption of fossil fuels; “soft” infrastructure such as scientific research, information systems and education; “green” infrastructure such as the natural resources on which all economic activity ultimately depends. Current public commentary tends to confine the term to hard infrastructure.

7 BCR of Soft Infrastructure Productivity Commission reviewed >100 case studies of publicly funded research and development grants (2007) – average BCR 40. SGS Economics estimate of value of health libraries (2014) noting the time saved by medical practitioners hunting down latest research – BCR 9. Queensland Dept NRM (2005) found coordinated land mapping had BCR at least 50, up to 150 (avoids developing unsuitable land and saves developers the costs of project- by-project environmental assessment).

8 Opportunity cost One per cent of the cost of the proposed Brisbane Cross River Tunnel would allow the government to re- engage 400 scientists, to improve policy in mining, energy, health and environment – and low-carbon transport; A life-changing week-long science camp for every Year 12 student (49,000) in Queensland could be funded by delaying the tunnel by one week.

9 Why? do governments consistently confine the term “infrastructure” to concrete forms - roads and ports and wires - and ignore the contribution of the soft and green forms?

10 Attitudes “I want to see cranes in the sky and bulldozers on the ground because that means economic growth” - Tony Abbott 2012. “I want to be known as an infrastructure Prime Minister and I want building the roads of the 21st century to be a hallmark of my Government” – Tony Abbott Sep. 2013. “Governments don't employ people per se, the private sector employs people” – Joe Hockey May 2014.

11 False theory of prosperity Limb 1 GDP counts value added by private sector but not value added by public service (outputs don’t appear in commercial markets); Scientific research by companies adds to GDP but public good science appears as cost without downstream benefit; Limb 2 Scientific literacy within Parliament is low; Scientific literacy at senior levels within the public services is low (economics, law and management are seen as the requisite disciplines); Scientific literacy at senior levels within business is low.

12 Cth Parliament’s scientific literacy Natural and physical sciences3.2 Information technology0.6 Engineering and related technologies1.4 Architecture and building Agriculture, environmental and related studies0.9 Health3.1 Education6.9 Management and commerce (incl. economics)19.9 Society and culture (26% law)59.5 Creative arts0.9 Food, hospitality and personal services0.3 Trade and certificates3.1 Total99.8 (Members and Senators with qualifications)(180/226 = 79.6) Field of 2008 Parliamentarians’ Qualifications

13 Conclusions Given that many emerging serious policy issues are environmental (climate change, health, land degradation, food production, peak oil, peak minerals), our policy leadership must become familiar with the environmental limits to growth. Scientists must become literate in policy analysis and volunteer themselves for public discourse. Governments must generously fund scientific research, both pure and applied. Given that governments are not generously funding scientific research, initiatives by civil society to keep this flame alive are essential. ends

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