Research as a Form of Infrastructure

Research as a Form of
Infrastructure
By Geoff Edwards
President
Royal Society of Queensland
13 June 2014
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.
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.
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 !
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.
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.
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 projectby-project environmental assessment).
Opportunity cost
• One per cent of the cost of the proposed Brisbane
Cross River Tunnel would allow the government to reengage 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.
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?
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.
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.
Cth Parliament’s scientific literacy
Field of 2008 Parliamentarians’ Qualifications
Natural and physical sciences
Information technology
Engineering and related technologies
Architecture and building
Agriculture, environmental and related studies
Health
Education
Management and commerce (incl. economics)
Society and culture (26% law)
Creative arts
Food, hospitality and personal services
Trade and certificates
Total
(Members and Senators with qualifications)
3.2
0.6
1.4
0.9
3.1
6.9
19.9
59.5
0.9
0.3
3.1
99.8
(180/226 = 79.6)
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