Even Thatcher realised the need for govt action on climate

Opinion: Last week a record was broken. Not at the Olympics, but off the Wellington Coast. At Baring Head, the concentration of carbon dioxide in the atmosphere reached an all-time high – and, ominously, the data shows that the pace of increase is now accelerating. In the same week the globe recorded its hottest day on record – twice.
There was something deeply troubling in the voice of climate scientist James Renwick as he spoke about the implications of this new record. He urged New Zealanders to voice their concern about climate change and demand that politicians and big business take action. Renwick – a Prime Minister’s Science Prize winner, lead author for the Intergovernmental Panel on Climate Change, and a former climate change commissioner – has been sounding the alarm for decades. His tone was plaintive; he sounded utterly defeated.
And he has good reason for this deep sense of despondency. Last month, the Government released the second draft Emissions Reduction Plan, as it is required to under the Zero Carbon Act. As the centrepiece that sets the pathway for our country to contribute to global mitigation efforts and meet our international obligations, this plan should be momentous and bold. But it fails the most important test: to take the increasingly real prospect of catastrophic climate change seriously.
As outlined in this recent Newsroom analysis, the plan must set out how it will achieve targets for each budget period. Though the plan is projected to meet the (unambitious) target for the first budget period, it looks shaky on the second and falls short on the third. And as for the longer term target of net zero by 2050 – New Zealand is now dangerously off-track. There is no surprise here, because the fundamental approach underpinning the plan is fatally flawed. That is because it envisages a minimal role for government in combating climate change – this, an unprecedented, all-pervasive and irreversible threat to our society, economy and way of life.
The multi-billion-dollar Climate Emergency Response Fund established under the previous government to fund climate mitigation policies has been scrapped, and instead this Emissions Reduction Plan anticipates the private sector will fund and finance the transition to a low-carbon economy, incentivised by the opaque workings of the Emissions Trading Scheme. This is the same scheme that has failed to achieve meaningful emissions reductions to date, largely because of an insufficiently high carbon price, meaning it is cheaper to pay for offsetting than reduce emissions at source.
The ‘market-led approach’ allows the Government to claim that the plan offers the ‘least cost approach’ to climate pollution reduction. But this only holds true – and only then on a knife’s edge – if we take a very narrow view of what is meant by ‘cost’. That is, merely the short-term, quantifiable monetary costs to the government, businesses and householders. It ignores the longer-term social, wellbeing and economic costs, or the social, health and economic co-benefits of many of the now-discontinued policies under the previous plan.
The less we do now, the more greenhouse gases will continue to accumulate in the atmosphere, the greater the cost to society in five, 10, or 20 years – especially as we factor in the cascading effects precipitated by tipping points and feedback loops. Because this plan defers these costs – of ever-increasing magnitude – to the future, it is actually the ‘greatest cost’ approach. Of course, many of these costs will be social or environmental (though all ultimately having an economic cost), which are often harder to quantify and therefore easier to dismiss, but it is baffling that the Government would be so wilfully blind to the economic costs and risks of its approach.
These economic costs will take at least three forms (though there will be many more). Because the pathway set by this plan is increasing the gaping chasm between our projected emissions reductions and our nationally determined contributions under the Paris Agreement, when the time to pay our ‘climate bill’ rolls around in 2030, we will have a huge liability on our hands. Cost estimates for the previously projected shortfall range between $3.3 billion and $23.7 billion, depending on the cost of carbon at the time of purchase. And the longer New Zealand leaves negotiations to buy credits, the higher the prices are likely to ramp up, as other countries also join the scramble for a limited pool of credits associated with authenticated climate-reducing projects. The deadline is not very far away, and it’s a big bill to pay.
Second, a failure to take our climate commitments seriously means a very real potential of jeopardising our free trade agreements, including with the EU, under which a failure to meet our Paris Agreement obligations could lead to trade sanctions. This should be especially concerning for our biggest emitting sector, agriculture, which continues to be granted immunity from the Emissions Trading Scheme – the Government’s primary tool for reducing emissions across the economy. Far from doing this sector ‘a favour’, it is doing it a tremendous disservice. The Government is failing to encourage the necessary and urgent shifts that need to be made to adapt to a climate- and technology-disrupted future, in which our low-value agricultural export commodities will become much more expensive to ship, less attractive to climate-conscious markets, and increasingly substitutable by the likes of precision fermentation of alternative milk proteins.
Third, but possibly most critically in terms of our economy’s long-term viability, the approach represents a huge missed opportunity: to diversify our economy and shift away from low-value commodities and sectors such as milk powder, unprocessed logs and high-volume/low-value tourism, towards a knowledge-based economy. With the right investment and policy settings, New Zealand could nurture a science and innovation community that produces climate solutions that can be sold to the rest of the world, helping other countries to push their emissions down. We could become contributors to a ‘net-positive’ world.
The Emissions Reduction Plan talks a big game on innovation. One of the five pillars of the Government’s climate strategy is ‘World-leading climate innovation boosts the economy’. But in the meantime the public science sector is being forced to cut costs and shed staff as Crown Research Institutes are told that, just like a business, they have to run a budget surplus. Recently announced cuts at Niwa and GNS Science including climate modellers and scientists who help predict and respond to natural hazards. This just exacerbates long-running under-investment in science and innovation: New Zealand lags behind our OECD cohort when it comes to public investment in research and science, as it does with private sector investment. This is not an environment in which ‘world-leading climate innovation’ is going to flourish.
Much more can be said about the plan’s failure to take climate change seriously. One is its continued heavy reliance on plantation forestry to offset emissions elsewhere in the economy. In fact, New Zealand is the only country that imposes no limits on forestry units in its ETS. The reliance on forestry has been criticised as risky and unsustainable by the OECD and the Climate Change Commission, among others. The plan’s claim that forestry can ‘lock carbon away’ is a patent untruth, because as we see unfolding right now in Canada, forests can be destroyed by wildfire, by pests and disease, or – simply – harvested. The only way to assuredly ‘lock carbon away’ is not to burn fossil fuels in the first place.
Rather than focus on reducing emissions at source, the plan creates another distraction by promising to investigate carbon capture and storage and projecting that this will reduce emissions by 4.6 Mt CO2-e over the next 10 years. This is a highly speculative technology, which even if found to be scalable, is eye-wateringly expensive. It is also very risky, because any failure will lead to a sudden and large-scale release of carbon into the atmosphere. It is also questionable why any quantum of emissions reduction would be associated with its ‘investigation’. Methane-inhibiting vaccines have been ‘investigated’ in New Zealand for over two decades, supported by generous government funding, but are predicted to be at least another decade away.
The central premise of the Emissions Reduction Plan is that government has a minimal role in combating climate change. Yet, even neoliberalism’s most ardent acolyte Margaret Thatcher argued, passionately, that governments must step up to fight the “insidious danger” of global warming to prevent “irretrievable damage to the atmosphere, to the oceans, to the earth itself”.
This plan takes ‘small government’ to an unprecedented new level – in doing so, neglecting its duty to protect the wellbeing and livelihoods of New Zealanders and abrogating its responsibility to be a good global citizen. But above all, its blindness to the economic dangers of this ‘least cost’, market-led approach is baffling. Make your voice heard by making a submission on the Emissions Reduction Plan by August 17, 2024.