Capitalism and Freedom

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Capitalism and Freedom

Author	Milton Friedman
Cover artist	Steven Cheung
Country	United States
Language	English
Genre	Non-fiction
Publisher	University of Chicago Press
Publication date	1962
Media type	Print (Hardback & Paperback)
Pages	202 (Fortieth anniversary edition)
ISBN	0-226-26421-1 (40th anniversary edition)
OCLC	49672469
Dewey Decimal	330.12/2 21
LC Class	HB501 .F7 2002

Capitalism and Freedom is a book by Milton Friedman originally published in 1962 by the University of Chicago Press which discusses the role of economic capitalism in liberal society. It sold over 400,000 copies in the first eighteen years and more than half a million since 1962. It has been translated into eighteen languages.

Friedman argues for economic freedom as a precondition for political freedom. He defines "liberal" in European Enlightenment terms, contrasting with an American usage that he believes has been corrupted since the Great Depression. His views are especially popular among American conservatives and libertarians.

The book identifies several places in which a free market can be promoted for both philosophical and practical reasons. Among other concepts, Friedman advocates ending the mandatory licensing of physicians and introducing a system of vouchers for school education.

Context

Capitalism and Freedom was published nearly two decades after World War II, a time when the Great Depression was still in collective memory. Under the Kennedy and preceding Eisenhower administrations, federal expenditures were growing at a quick pace in the areas of national defense, social welfare, and infrastructure. Both major parties, Democratic and Republican, supported increased spending in different ways. This, as well as the New Deal, was supported by most intellectuals with the justification of Keynesian economics. Capitalism and Freedom introduces the idea of how competitive capitalism can help to achieve economic freedom.

Chapter summaries

Introduction

The introduction lays out the principles of Friedman's archetypal liberal, a man who supports limited and dispersed governmental power. Friedman opts for the continental European, rather than American, definition of the term.

i. The Relation between Economic Freedom and Political Freedom

In this chapter, Friedman promotes economic freedom as both a necessary freedom and also as a vital means for political freedom. He argues that, with the means for production under the auspices of the government, it is nearly impossible for real dissent and exchange of ideas to exist. Additionally, economic freedom is important, since any "bi-laterally voluntary and informed" transaction must benefit both parties to the transaction. Friedman states that economic freedom protects minorities from discrimination since the market is apathetic to, "their views or color."

ii. The Role of Government in a Free Society

According to the author, the government of a liberal society should enforce law and order and property rights, as well as take action on certain technical monopolies and diminish negative "neighborhood effects." The government should also have control over money, as has long been recognized in the constitution and society.

iii. The Control of Money

He discusses the evolution of money in America, culminating in the Federal Reserve Act of 1913. Far from acting as a stabilizer, the Federal Reserve failed to act as it should have in several circumstances. Friedman proposes that the Federal Reserve have a consistent rule to increase the money supply by 3–5% annually.

iv. International Financial and Trade Arrangements

This chapter advocates the end of the Bretton Woods system in favor of a floating exchange rate system and the end of all currency controls and trade barriers, even "voluntary" export quotas. Friedman says that this is the only true solution to the balance of trades problem.

v. Fiscal Policy

Friedman argues against the continual government spending justified to "balance the wheel" and help the economy to continue to grow. On the contrary, federal government expenditures make the economy less, not more stable. Friedman uses concrete evidence from his own research, demonstrating that the rise in government expenditures results in a roughly equal rise in GDP, contrasting with the Keynesian multiplier theory. Many reasons for this discrepancy are discussed.

vi. The Role of Government in Education

The policy advocated here is vouchers which students may use for education at a school of their choice. The author believes that everyone, in a democracy, needs a basic education for citizenship. Though there is underinvestment in human capital (in terms of spending at technical and professional schools), it would be foolish of the government to provide free technical education. The author suggests several solutions, some private, some public, to stop this underinvestment.

vii. Capitalism and Discrimination

In a capitalist society, Friedman argues, it costs money to discriminate, and it is very difficult, given the impersonal nature of market transactions. However, the government should not make fair employment practices laws (eventually embodied in the Civil Rights Act of 1964), as these inhibit the freedom to employ someone based on whatever qualifications the employer wishes to use. For the same reason, right-to-work laws should be abolished.

viii. Monopoly and the Social Responsibility of Business and Labor

Friedman states, there are three alternatives for a monopoly: public monopoly, private monopoly, or public regulation. None of these is desirable or universally preferable. Monopolies come from many sources, but direct and indirect government intervention is the most common, and it should be stopped wherever possible. The doctrine of "social responsibility", that corporations should care about the community and not just profit, is highly subversive to the capitalist system and can only lead towards totalitarianism.

ix. Occupational Licensure

Friedman takes a radical stance against all forms of state licensure. The biggest advocates for licenses in an industry are, usually, the people in the industry, wishing to keep out potential competitors. The author defines registration, certification, and licensing, and, in the context of doctors, explains why the case for each one of these is weaker than the previous one. There is no liberal justification for licensing doctors; it results in inferior care and a medical cartel.

x. The Distribution of Income

Friedman examines the progressive income tax, introduced in order to redistribute income to make things more fair, and finds that, in fact, the rich take advantage of numerous loopholes, nullifying the redistributive effects. It would be far more fair just to have a uniform flat tax with no deductions, which could meet the 1992 tax revenues with a rate only slightly greater than the lowest tax bracket at that time.

xi. Social Welfare Measures

Though well-intentioned, many social welfare measures don't help the poor as much as some think. Friedman focuses on Social Security as a particularly large and unfair system.

xii. Alleviation of Poverty

He advocates a negative income tax to fix the issue, giving everyone a guaranteed minimum income, rather than current measures, which he sees as misguided and inefficient.

xiii. Conclusion

The conclusion to the book centers on how, time and time again, government intervention often has an effect opposite of that intended. Most good things in the United States and the world come from the free market, not the government, and they will continue to do so. The government, despite its good intentions, should stay out of areas where it does not need to be.

Influence

The effects of Capitalism and Freedom were great yet varied in the realm of political economics. Some of Friedman's suggestions are being tested and implemented in many places, such as the flat income tax in Estonia (since 1994) and Slovakia (since 2004), a floating exchange rate which has almost fully replaced the Bretton Woods system, and national school voucher systems in Chile (since 1981) and Sweden (since 1992), to cite a few prominent examples. However, many other ideas have scarcely been considered, such as the end of licensing, and the abolition of corporate income tax (in favor of an income tax on the stock holder). Though politicians often claim that they are working towards "free trade," an idea the book supports, few American politicians have considered taking his suggestion of phasing out all tariffs in 10 years. Nevertheless, Friedman popularized many ideas previously unknown to most outside economics. This and other works helped Milton Friedman to become a household name. The Times Literary Supplement called it "one of the most influential books published since the war."

Capitalism and Freedom, along with much of Milton Friedman’s writing, has influenced the movement of libertarian and conservative philosophy in America. Milton’s philosophy of economic and individual freedom has pushed similar thinking political parties to emerge, such as the Libertarian Party and the Tea Party.

Capitalism and Freedom made the Intercollegiate Studies Institute's 50 Best Books of the 20th Century and also was placed tenth on the list of the 100 best non-fiction books of the twentieth century compiled by National Review. In 2011, the book was placed on Time Magazine's top 100 non-fiction books written in English since 1923.

Balance of trade

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Balance_of_trade

 

Cumulative current account balance 1980–2008 based on International Monetary Fund data.

 

Cumulative current account balance per capita 1980–2008 based on International Monetary Fund data.

The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance of trade for goods versus one for services. The balance of trade measures a flow of exports and imports over a given period of time. The notion of the balance of trade does not mean that exports and imports are "in balance" with each other.

If a country exports a greater value than it imports, it has a trade surplus or positive trade balance, and conversely, if a country imports a greater value than it exports, it has a trade deficit or negative trade balance. As of 2016, about 60 out of 200 countries have a trade surplus. The notion that bilateral trade deficits are bad in and of themselves is overwhelmingly rejected by trade experts and economists.

Explanation

Balance of trade in goods and services (Eurozone countries)

 

US trade balance from 1960

 

U.S. trade balance and trade policy (1895–2015)

 

U.K. balance of trade in goods (since 1870)

 

The balance of trade forms part of the current account, which includes other transactions such as income from the net international investment position as well as international aid. If the current account is in surplus, the country's net international asset position increases correspondingly. Equally, a deficit decreases the net international asset position.

The trade balance is identical to the difference between a country's output and its domestic demand (the difference between what goods a country produces and how many goods it buys from abroad; this does not include money re-spent on foreign stock, nor does it factor in the concept of importing goods to produce for the domestic market).

Measuring the balance of trade can be problematic because of problems with recording and collecting data. As an illustration of this problem, when official data for all the world's countries are added up, exports exceed imports by almost 1%; it appears the world is running a positive balance of trade with itself. This cannot be true, because all transactions involve an equal credit or debit in the account of each nation. The discrepancy is widely believed to be explained by transactions intended to launder money or evade taxes, smuggling and other visibility problems. While the accuracy of developing countries statistics would be suspicious, most of the discrepancy actually occurs between developed countries of trusted statistics.

Factors that can affect the balance of trade include:

• The cost of production (land, labor, capital, taxes, incentives, etc.) in the exporting economy vis-à-vis those in the importing economy;
• The cost and availability of raw materials, intermediate goods and other inputs;
• Currency exchange rate movements;
• Multilateral, bilateral and unilateral taxes or restrictions on trade;
• Non-tariff barriers such as environmental, health or safety standards;
• The availability of adequate foreign exchange with which to pay for imports; and
• Prices of goods manufactured at home (influenced by the responsiveness of supply)

In addition, the trade balance is likely to differ across the business cycle. In export-led growth (such as oil and early industrial goods), the balance of trade will shift towards exports during an economic expansion. However, with domestic demand-led growth (as in the United States and Australia) the trade balance will shift towards imports at the same stage in the business cycle. 

The monetary balance of trade is different from the physical balance of trade (which is expressed in amount of raw materials, known also as Total Material Consumption). Developed countries usually import a substantial amount of raw materials from developing countries. Typically, these imported materials are transformed into finished products, and might be exported after adding value. Financial trade balance statistics conceal material flow. Most developed countries have a large physical trade deficit, because they consume more raw materials than they produce. Many civil society organisations claim this imbalance is predatory and campaign for ecological debt repayment.

Examples

Historical example

Many countries in early modern Europe adopted a policy of mercantilism, which theorized that a trade surplus was beneficial to a country, among other elements such as colonialism and trade barriers with other countries and their colonies. (Bullionism was an early philosophy supporting mercantilism.) 

Merchandise exports (1870–1992)

 

Trade policy, exports and growth in selected European countries

 

The practices and abuses of mercantilism led the natural resources and cash crops of British North America to be exported in exchange for finished goods from Great Britain, a factor leading to the American Revolution. An early statement appeared in Discourse of the Common Wealth of this Realm of England, 1549: "We must always take heed that we buy no more from strangers than we sell them, for so should we impoverish ourselves and enrich them." Similarly a systematic and coherent explanation of balance of trade was made public through Thomas Mun's 1630 "England's treasure by foreign trade, or, The balance of our foreign trade is the rule of our treasure"

Since the mid-1980s, the United States has had a growing deficit in tradeable goods, especially with Asian nations (China and Japan) which now hold large sums of U.S debt that has in part funded the consumption. The U.S. has a trade surplus with nations such as Australia. The issue of trade deficits can be complex. Trade deficits generated in tradeable goods such as manufactured goods or software may impact domestic employment to different degrees than do trade deficits in raw materials.

Economies which have savings surpluses, such as Japan and Germany, typically run trade surpluses. China, a high-growth economy, has tended to run trade surpluses. A higher savings rate generally corresponds to a trade surplus. Correspondingly, the U.S. with its lower savings rate has tended to run high trade deficits, especially with Asian nations.

Some have said that China pursues a mercantilist economic policy. Russia pursues a policy based on protectionism, according to which international trade is not a "win-win" game but a zero-sum game: surplus countries get richer at the expense of deficit countries.

In 2016

Balance of trade in some geographic zones

Country example: Armenia

In March 2019, Armenia recorded a trade deficit of US$203.90 Million. For the last two decades, the Armenian trade balance has been negative, reaching the all-time high of –33.98 USD Million in August, 2003. The reason of trade deficit is because Armenia's foreign trade is limited due to landlocked location and border disputes with Turkey and Azerbaijan, from the west and east sides respectively. The situation results in the country's usual report of high trade deficits.

Views on economic impact

The notion that bilateral trade deficits are bad in and of themselves is overwhelmingly rejected by trade experts and economists. According to the IMF trade deficits can cause a balance of payments problem, which can affect foreign exchange shortages and hurt countries. On the other hand, Joseph Stiglitz points out that countries running surpluses exert a "negative externality" on trading partners and pose a threat to global prosperity, far more than those in deficit. Ben Bernanke argues that "persistent imbalances within the euro zone are... unhealthy, as they lead to financial imbalances as well as to unbalanced growth. The fact that Germany is selling so much more than it is buying redirects demand from its neighbors (as well as from other countries around the world), reducing output and employment outside Germany."

A 2018 National Bureau of Economic Research paper by economists at the International Monetary Fund and University of California, Berkeley, found in a study of 151 countries over 1963-2014 that the imposition of tariffs had little effect on the trade balance.

Classical theory

Adam Smith on the balance of trade

In the foregoing part of this chapter I have endeavoured to show, even upon the principles of the commercial system, how unnecessary it is to lay extraordinary restraints upon the importation of goods from those countries with which the balance of trade is supposed to be disadvantageous. Nothing, however, can be more absurd than this whole doctrine of the balance of trade, upon which, not only these restraints, but almost all the other regulations of commerce are founded. When two places trade with one another, this [absurd] doctrine supposes that, if the balance be even, neither of them either loses or gains; but if it leans in any degree to one side, that one of them loses and the other gains in proportion to its declension from the exact equilibrium.

— Smith, 1776, book IV, ch. iii, part ii

Keynesian theory

In the last few years of his life, John Maynard Keynes was much preoccupied with the question of balance in international trade. He was the leader of the British delegation to the United Nations Monetary and Financial Conference in 1944 that established the Bretton Woods system of international currency management. He was the principal author of a proposal – the so-called Keynes Plan – for an International Clearing Union. The two governing principles of the plan were that the problem of settling outstanding balances should be solved by 'creating' additional 'international money', and that debtor and creditor should be treated almost alike as disturbers of equilibrium. In the event, though, the plans were rejected, in part because "American opinion was naturally reluctant to accept the principle of equality of treatment so novel in debtor-creditor relationships".

The new system is not founded on free-trade (liberalisation of foreign trade) but rather on the regulation of international trade, in order to eliminate trade imbalances: the nations with a surplus would have a powerful incentive to get rid of it, and in doing so they would automatically clear other nations deficits. He proposed a global bank that would issue its own currency – the bancor – which was exchangeable with national currencies at fixed rates of exchange and would become the unit of account between nations, which means it would be used to measure a country's trade deficit or trade surplus. Every country would have an overdraft facility in its bancor account at the International Clearing Union. He pointed out that surpluses lead to weak global aggregate demand – countries running surpluses exert a "negative externality" on trading partners, and posed far more than those in deficit, a threat to global prosperity. In "National Self-Sufficiency" The Yale Review, Vol. 22, no. 4 (June 1933), he already highlighted the problems created by free trade. 

His view, supported by many economists and commentators at the time, was that creditor nations may be just as responsible as debtor nations for disequilibrium in exchanges and that both should be under an obligation to bring trade back into a state of balance. Failure for them to do so could have serious consequences. In the words of Geoffrey Crowther, then editor of The Economist, "If the economic relationships between nations are not, by one means or another, brought fairly close to balance, then there is no set of financial arrangements that can rescue the world from the impoverishing results of chaos."

These ideas were informed by events prior to the Great Depression when – in the opinion of Keynes and others – international lending, primarily by the U.S., exceeded the capacity of sound investment and so got diverted into non-productive and speculative uses, which in turn invited default and a sudden stop to the process of lending.

Influenced by Keynes, economics texts in the immediate post-war period put a significant emphasis on balance in trade. For example, the second edition of the popular introductory textbook, An Outline of Money, devoted the last three of its ten chapters to questions of foreign exchange management and in particular the 'problem of balance'. However, in more recent years, since the end of the Bretton Woods system in 1971, with the increasing influence of monetarist schools of thought in the 1980s, and particularly in the face of large sustained trade imbalances, these concerns – and particularly concerns about the destabilising effects of large trade surpluses – have largely disappeared from mainstream economics discourse and Keynes' insights have slipped from view. They are receiving some attention again in the wake of the financial crisis of 2007–08.

Monetarist theory

Prior to 20th century monetarist theory, the 19th century economist and philosopher Frédéric Bastiat expressed the idea that trade deficits actually were a manifestation of profit, rather than a loss. He proposed as an example to suppose that he, a Frenchman, exported French wine and imported British coal, turning a profit. He supposed he was in France, and sent a cask of wine which was worth 50 francs to England. The customhouse would record an export of 50 francs. If, in England, the wine sold for 70 francs (or the pound equivalent), which he then used to buy coal, which he imported into France, and was found to be worth 90 francs in France, he would have made a profit of 40 francs. But the customhouse would say that the value of imports exceeded that of exports and was trade deficit against the ledger of France.

By reductio ad absurdum, Bastiat argued that the national trade deficit was an indicator of a successful economy, rather than a failing one. Bastiat predicted that a successful, growing economy would result in greater trade deficits, and an unsuccessful, shrinking economy would result in lower trade deficits. This was later, in the 20th century, echoed by economist Milton Friedman. 

In the 1980s, Milton Friedman, a Nobel Memorial Prize-winning economist and a proponent of monetarism, contended that some of the concerns of trade deficits are unfair criticisms in an attempt to push macroeconomic policies favorable to exporting industries.

Friedman argued that trade deficits are not necessarily important, as high exports raise the value of the currency, reducing aforementioned exports, and vice versa for imports, thus naturally removing trade deficits not due to investment. Since 1971, when the Nixon administration decided to abolish fixed exchange rates, America's Current Account accumulated trade deficits have totaled $7.75 trillion as of 2010. This deficit exists as it is matched by investment coming into the United States – purely by the definition of the balance of payments, any current account deficit that exists is matched by an inflow of foreign investment. 

In the late 1970s and early 1980s, the U.S. had experienced high inflation and Friedman's policy positions tended to defend the stronger dollar at that time. He stated his belief that these trade deficits were not necessarily harmful to the economy at the time since the currency comes back to the country (country A sells to country B, country B sells to country C who buys from country A, but the trade deficit only includes A and B). However, it may be in one form or another including the possible tradeoff of foreign control of assets. In his view, the "worst-case scenario" of the currency never returning to the country of origin was actually the best possible outcome: the country actually purchased its goods by exchanging them for pieces of cheaply made paper. As Friedman put it, this would be the same result as if the exporting country burned the dollars it earned, never returning it to market circulation.

This position is a more refined version of the theorem first discovered by David Hume. Hume argued that England could not permanently gain from exports, because hoarding gold (i.e., currency) would make gold more plentiful in England; therefore, the prices of English goods would rise, making them less attractive exports and making foreign goods more attractive imports. In this way, countries' trade balances would balance out.

Friedman presented his analysis of the balance of trade in Free to Choose, widely considered his most significant popular work. 

Trade balance’s effects upon a nation's GDP

Exports directly increase and imports directly reduce a nation's balance of trade (i.e. net exports). A trade surplus is a positive net balance of trade, and a trade deficit is a negative net balance of trade. Due to the balance of trade being explicitly added to the calculation of the nation's gross domestic product using the expenditure method of calculating gross domestic product (i.e. GDP), trade surpluses are contributions and trade deficits are "drags" upon their nation's GDP.

Balance of trade vs. balance of payments

Balance of trade	Balance of payments
Includes only visible imports and exports, i.e. imports and exports of merchandise. The difference between exports and imports is called the balance of trade. If imports are greater than exports, it is sometimes called an unfavourable balance of trade. If exports exceed imports, it is sometimes called a favourable balance of trade.	Includes all those visible and invisible items exported from and imported into the country in addition to exports and imports of merchandise.
Includes revenues received or paid on account of imports and exports of merchandise. It shows only revenue items.	Includes all revenue and capital items whether visible or non-visible. The balance of trade thus forms a part of the balance of payments.

Environmental issues in Australia

From Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Environmental_issues_in_Australia

 

A rabbit-proof fence enforces a barrier to protect agriculture areas in Western Australia. Rabbits are an invasive species in Australia.

Environmental issues in Australia describes a number of environmental issues which affect the environment of Australia. There are a range of such issues, some of the relating to conservation in Australia while others, for example the deteriorating state of Murray-Darling Basin, have a direct and serious effect on human land use and the economy.

Many human activities including the use of natural resources have a direct impact on the Australian environment.

These issues are the primary concern of the environmental movement in Australia.

Climate change

Climate change is now a major political talking point in Australia in the last two decades. Persistent drought, and resulting water restrictions during the first decade of the twenty-first century, are an example of natural events' tangible effect on economic and political realities .

Australia ranks within the top ten countries globally with respect to greenhouse gas emissions per capital.

The current federal and state governments have all publicly stated their belief that climate change is being caused by anthropogenic greenhouse gas emissions. Vocal minority groups within the population campaign against mining and coal-fired power stations in Australia, and such demonstrations are widely reported by the mainstream media. Similarly, vocal minority groups concurrently oppose wind energy schemes, despite being 'carbon neutral', on the grounds of local visual and noise impact and concern for the currently high cost and low reliability of wind energy.

Despite the publication of the Garnaut report and the Green Paper on the proposed Carbon Pollution Reduction Scheme, public belief in anthropogenic climate change has noticeably eroded following the leaking of e-mails from the University of East Anglia's Climate Research Unit.

There is claimed to be a net benefit to Australia in stabilising greenhouse gases in the atmosphere at 450ppm CO₂ eq in line with the prevailing political stance. Public disagreement with this opinion is generally dismissed as expression of vested interests, for example from the coal industry.

Energy use

Australia is a major exporter and consumer of coal, the combustion of which liberates CO₂. Consequently, in 2003 Australia was the eighth highest emitter of CO₂ gases per capita in the world liberating 16.5 tonnes per capital. Australia is claimed to be one of the countries most at risk from climate change according to the Stern report.

Most of Australia's demand for electricity depends upon coal-fired thermal generation, owing to the plentiful indigenous coal supply, limited potential electric generation and political unwillingness to exploit indigenous uranium resources (although Australia accounted for the world's second highest production of uranium in 2005 to fuel a 'carbon neutral' domestic nuclear energy program.

Conservation

Conservation in Australia is an issue of state and federal policy. Australia is one of the most biologically diverse countries in the world, with a large portion of species endemic to Australia. Preserving this wealth of biodiversity is important for future generations.

A key conservation issue is the preservation of biodiversity, especially by protecting the remaining rainforests. The destruction of habitat by human activities, including land clearing, remains the major cause of biodiversity loss in Australia. The importance of the Australian rainforests to the conservation movement is very high. Australia is the only western country to have large areas of rainforest intact. Forests provide timber, drugs, and food and should be managed to maximize the possible uses. Currently, there are a number of environmental movements and campaigners advocating for action on saving the environment, one such campaign is the Big Switch.

Land management issues including clearance of native vegetation, reafforestation of once-cleared areas, control of exotic weeds and pests, expansion of dryland salinity, and changed fire regimes. Intensification of resource use in sectors such as forestry, fisheries, and agriculture are widely reported to contribute to biodiversity loss in Australia. Coastal and marine environments also have reduced biodiversity from reduced water quality caused by pollution and sediments arising from human settlements and agriculture. In central New South Wales where there are large plains of grassland, problems have risen from—unusual to say—lack of land clearing.

The Daintree Rainforest, a tropical rainforest near Daintree, Queensland covering around 1200 square kilometres, is threatened by logging, development, mining and the effects of the high tourist numbers.

There are some government programs in Australia which are the opposite of conservation (such as killing wildlife); an example of this is shark culling, which currently occurs in New South Wales and Queensland.

Native fauna

The Tasmanian devil, officially listed as an endangered species in 2008.

Over a hundred species of fauna are currently under serious threat of extinction. The plight of some of these species receives more attention than others and recently the focus of many conservation organisations has been the critically endangered northern hairy-nosed wombat, the endangered Tasmanian devil, northern tiger quoll, south eastern red-tailed black cockatoo, southern cassowary, Tasmanian wedge-tailed eagle, Leadbeater's possum and southern corroboree frog.

Australia has a poor record of conservation of native fauna. The extinction of Australian megafauna is attributed to the arrival of humans and since European settlement, 23 birds, 4 frogs, and 27 mammal species are also known to have become extinct.

Marine conservation

Recent climate change reports have highlighted the threat of higher water temperatures to the Great Barrier Reef

 

One of the notable issues with marine conservation in Australia is the protection of the Great Barrier Reef. The Great Barrier Reef's environmental pressures include water quality from runoff, climate change and mass coral bleaching, cyclic outbreaks of the crown-of-thorns starfish, overfishing, and shipping accidents. The government of Queensland currently kills sharks in the Great Barrier Reef using drum lines, causing damage to the marine ecosystem.

Whaling

Whaling in Australia took place from colonisation in 1788. In 1979 Australia terminated whaling and committed to whale protection. The main varieties hunted were humpback, blue, right and sperm whales.

Shark culling

Western Australia culled sharks in 2014, killing dozens of tiger sharks and causing public protest. Later that year it was abandoned, and the government of Western Australia continued to shoot and kill sharks it believed to be an "imminent threat" to humans from 2014 to 2017; this policy was criticized by senator Rachel Siewart for being environmentally damaging.

From 1962 to the present, the government of Queensland has killed sharks on drum lines and shark nets, a process that also kills other animals such as dolphins and dugongs. From 1962 to 2018, Queensland's "shark control" program killed roughly 50,000 sharks, including sharks in the Great Barrier Reef. Queensland's shark-killing program has been called "outdated, cruel and ineffective".

New South Wales has a shark net program that kills sharks as well as other marine life. Between 1950 and 2008, 352 tiger sharks and 577 great white sharks were killed in the nets in New South Wales — also during this period, a total of 15,135 marine animals were killed in the nets, including whales and turtles. There has been a very large decrease in the number of sharks in eastern Australia in recent years, and the shark-killing programs in Queensland and New South Wales are partly responsible for this decrease.

Jessica Morris of Humane Society International calls shark culling a "knee-jerk reaction" and says, "sharks are top order predators that play an important role in the functioning of marine ecosystems. We need them for healthy oceans."

Oil spills

While there have been no oil spill environmental disasters of the scale of the Exxon Valdez in the country, Australia has a large oil industry and there have been several large oil spills. Spills remain a serious threat to the marine environment and Australian coastline. The largest spill to date was the Kirki tanker in 1991 which dropped 17,280 tonnes of oil off the coast of Western Australia. 

In March 2009, the 2009 southeast Queensland oil spill occurred, where 200,000 litres were spilled from the MV Pacific Adventurer spilling more than 250 tonnes of oil, 30 tonnes of fuel and other toxic chemicals on Brisbane's suburban beaches. Premier Anna Bligh described the spill as "worst environmental disaster Queensland has ever seen".

Ocean dumping

A serious issue to the Australian marine environment is the dumping of rubbish from ships. There have been a number of cases, particularly involving the navy of Australian and other countries polluting Australian waters including the dumping of chemical warfare agents. Recently documented cases include the aircraft carrier USS Ronald Reagan in 2006 which was found to be dumping rubbish off the shores of Moreton Island. In Victoria, a large number of toxic drums containing 1,2-Dichlorobenzene xylenol, a substance very toxic to aquatic creatures washed up on beaches during May 2009 presumably fallen off a passing container ship.

Invasive species

Introduced cane toads threaten native species

Australia's geographical isolation has resulted in the evolution of many delicate ecological relationships that are sensitive to foreign invaders and in many instances provided no natural predators for many of the species subsequently introduced. Introduced plants that have caused widespread problems are lantana and the prickly pear bush. The introduction and spread of animals such as the cane toad or rabbit can disrupt the existing balances between populations and develop into environmental problems. The introduction of cattle into Australia and to a lesser extent the dingo, are other examples of species that have changed the landscape. In some cases the introduction of new species can lead to plagues and the extinction of endemic species.

The introduced species red fox has single-handedly caused the extinction of several species. Tasmania takes the threat of red fox introduction so seriously that it has a government sponsored taskforce to prevent fox populations from taking hold on the island.

Land degradation

According to Jared Diamond, "Australia's number-one environmental problem [is] land degradation". Land degradation results from nine types of damaging environmental impacts:

• Clearance of native vegetation
• Overgrazing by sheep
• Rabbits
• Soil nutrient exhaustion
• Soil erosion
• Man-made droughts
• Weeds
• Misguided governmental policies
• Salinization

Logging and woodchopping

Clearcutting of old growth forests is continuing in parts of Australia. This often involves the destruction of natural ecosystems and the replacement with monoculture plantations.

Land clearing

In the prehistory of Australia the Indigenous Australians used fire-stick farming which was an early form of land clearing which caused long term changes to the ecology. With European colonisation land clearing continued on a larger scale for agriculture - particularly for cattle, cotton and wheat production. Since European settlement a total of 13% of native vegetation cover has been lost. The extinction of 20 different mammals, 9 bird and 97 plant species have been partially attributed to land clearing. Land clearing is a major source of Australia’s greenhouse gas emissions, and contributed to approximately 12 percent of Australia’s total emissions in 1998.

The consequences of land clearing include dryland salinity and soil erosion. These are a major concern to the landcare movement in Australia.

The clearing of native vegetation is controlled by Federal laws (indirectly), State law and local planning instruments. The precise details of regulation of vegetation clearing differ according to the location where clearing is proposed.

Soil salinity

Soil salinity affects 50,000 km² of Australia and is predominantly due to land clearance.

Waterway health

A Parks Victoria litter trap on the river catches floating rubbish on the Yarra at Birrarung Marr

 

The protection of waterways in Australia is a major concern for various reasons including habitat and biodiversity, but also due to use of the waterways by humans.

The Murray-Darling Basin is under threat due to irrigation in Australia, causing high levels of salinity which affect agriculture and biodiversity in New South Wales, Victoria and South Australia. These rivers are also affected by pesticide run-off and drought.

Australian waterways facing environmental issues

Rivers and creeks in urban areas also face environmental issues, particularly pollution.

Victoria

• Port Phillip (contamination - silt; sediment; toxins; household chemicals; garden chemicals; E. coli; litter; flotsam and jetsam)
• Yarra River (contamination - E. coli; litter - 13 traps; logging; erosion; salinity)
• Maribyrnong River (contamination - arsenic and heavy metals; litter - 1 trap)
• Mullum Mullum Creek (contamination - E. coli; litter)
• Murray River (salinity, erosion)

New South Wales

Remediation of soil and sediment from Homebush Bay on the Parramatta River by desorbtion and incineration

• Parramatta River (contamination - dioxins, arsenic, coal tars, chromium, lead and phthalates)
• Darling River (salinity, erosion)
• Murray River (salinity, erosion)
• Cooks River (pollution, algal blooms)

Queensland

• Bremer River (water grading F - lowest possible)
• Brisbane River
• Oxley Creek (water grading D)
• Bulimba Creek (threatened species due to land degradation; pollution; litter)

South Australia

• River Torrens (contaminants - E. coli; algal bloom)

Water use

Water use is a major sustainability issue in Australia in regards to water security. Reliable and safe water sources are threatened by a number of factors. These include climate change, rainfall variability, population growth, economic development, and drought.

Australia also has naturally highly variable rainfall influenced by events such as El Niño and La Niña. An El Niño was declared in May 2015. The El Niño’s likely impact will be drier and warmer conditions across inland eastern Australia. Importantly, the strength of an El Niño does not always indicate how severely Australia may be affected.

Dryer conditions and droughts, such as the one south east Australia is currently experiencing, increase pressure on the water supply of effected regions. In particular, increased water demands and reduced stream flows have seen a decline in surface water storage volumes. 

Urbanisation

The urban sprawl of Melbourne.

Australia is one of the most urbanised countries in the world. Many Australian cities have large urban footprints and are characterised by an unsustainable low density urban sprawl. This places demand on infrastructure and services which contributes to the problems of land clearing, pollution, transport related emissions, energy consumption, invasive species, automobile dependency and urban heat islands. 

A Queensland beach with the skyline of the heavily developed Gold Coast in the background. Formerly swamplands, the city was urbanised on a coastal strip between waterways and the sea and now contains many high rises.

 

The urban sprawl continues to increase at a rapid rate in most Australian cities, particularly the state capital cities, all of which (with the exception of Hobart) are metropoleis. In some centres, such as Sydney and Greater Western Sydney, Greater Melbourne and South East Queensland large metropolitan conurbations threaten to extend for hundreds of kilometres and based on current population growth rates are expected to become megacities in the 21st century. Most Australian cities population growth is a result of migration in contrast to the Birth rate and fertility rate in Australia, which is contributing to the ongoing trend of urbanisation. 

In recent years, some cities have implemented transit-oriented development strategies to curb the urban sprawl. Notable examples include Melbourne 2030, South East Queensland Regional Plan and the Sydney Metropolitan Strategy. There are also population decentralisation programs at state and federal levels aimed at shifting populations out of the major centres and stemming the drivers to rapid urbanisation. Albury-Wodonga was part of the federal government's program of decentralisation begun in the 1970s, which has at times had relocation policies for immigration. The Victorian government has run a decentralisation program since the 1960s, having had a ministerial position appointed and ongoing promotional and investment programs for stimulating growth in Regional Victoria. However policy has swung over the decades, primarily due to local development priorities and agendas and a lack of federal co-ordination to the problem.

Issues include large quantities of e-waste and toxic waste going into landfill. Australia does not have restrictions on the dumping of toxic materials that are common in other countries, such as dumping Cathode Ray Tubes which leach heavy metals into water catchments. Due to the lack of sufficient sites for toxic waste disposal large quantities of toxic waste are trucked between states to remote dumping grounds or exported overseas in ships.

Mining issues

Australia has the largest reserves of uranium in the world and there has been a number of enquiries on uranium mining. The anti-nuclear movement in Australia is actively opposing mining as well as preventing the construction of nuclear power plants.

At least 150 leaks, spills and licence breaches have occurred at the Ranger uranium mine between 1981 and 2009.