YOU'RE WRONG IF YOU THINK WE'RE LEADING
10 July 2008PETER NEILSON
Leading the world with forward-thinking carbon emissions strategies makes sound economic sense.
One tragic aspect of the emissions trading scheme debate has been the break-up of cross-party support. Less than a year ago almost all parties in parliament supported the scheme.
Moving New Zealand's economy to a highly competitive low-carbon model to protect and boost our trading position is vital. This will trigger and underpin new low-carbon investment, worth more than $12.3 billion during the next 10 years. This will be crucial to create new jobs paying more than $5.5b a year in wages - and to keep and broaden our overseas market access.
The problem needs solutions spanning the life of 20 parliaments: solutions such as emissions trading which incentivises emitters to cut emissions and others to invest in cleaner technology and new industries.
Yet Mark Franklin, chief executive of New Zealand's carbon-trading platform, NZX-owned TZ1, was driven to remark last month: "When I think of [some] MPs . . . a lot of people have got very strong self-interested views. I see too much conformism and too much lobbying." Franklin said New Zealanders were still debating climate change science, when the rest of the world had moved on.
Don't make the mistake of thinking New Zealand is leading in this area, or has any time to spare. Recently we have seen:
* California unveil its own draft cap and trade scheme to meet the goals of a 2006 law requiring the state to slash greenhouse gas emissions to 1990 levels by 2020.
* Tokyo's metropolitan assembly approve plans to force 1300 major businesses to cut emissions blamed for global warming 25% by 2020 compared to 2000 levels. The Japanese government has also committed to introduce a cap and trade scheme.
* China's Central Bank launch an investigation into how it might run a cap and trade scheme.
* Australia's federal government require compulsory annual emissions recording data from major emitters. First reports are due in October next year - a year before it hopes to start its emissions trading scheme.
* The European Union (EU) affirm it will impose emissions charges on airlines.
* Some 250 United States dairy industry leaders announce an industry-wide commitment to reduce fluid milk's carbon footprint.
This comes on top of US presidential candidates affirming they will back cap and trade bills if elected, and the US Senate considering bills that provide for imposing a carbon price on imports from countries which don't have one.
The EU will have an even more stringent and expansive scheme than it has now. The European Parliament has voted for a report which will lead to carbon footprint labelling on all goods and services across Europe, including imports. A British standard for carbon labelling has been on trial for more than a year - and will be made final this month.
In New Zealand our major response, the emissions trading scheme, is bogged in backrooms while the government tries to gather a majority to get it through.
If National forms the next government and is persuaded to wait for Australia to put its scheme in place, the opportunity for New Zealand to enter world climate-change agreement talks advocating for other countries to include agriculture and forestry in their cap and trade schemes will be diminished.
While our food exports are believed to have lower emissions than northern competitors, it pays to play the strongest hand we can to persuade others to include agriculture in their emissions reduction scheme. Why should we surrender our competitive position to the American dairy farmer, or the 1000 farmers in Australia already creating and selling voluntary emission credits by applying carbon-capturing bio char to their soils?
The debate over the emissions trading scheme shows the country needs a permanent New Zealand Incorporated forum to make the right decisions for the country long-term. The Climate Change Forum, bringing together 34 individuals from all business sectors, the unions, non-governmental organisations and senior government officials, shows it can work. After six months of talks only one significant issue separated the people in the room.
Policy-makers should consider establishing an on-going pan-sector sustainability commission, and ensure the country does the right things to seize the billions in business opportunities arising from the climate-change response.
Some of the new clean technology, owned in New Zealand, will have multibillion-dollar markets overseas.
Vast sums in emissions credits will also be earned through Kyoto-linked schemes as New Zealand deploys technologies into developing and developed countries.
For example, the answer to lowering ruminant animals' methane emissions will have a market of a billion farm animals worldwide.
In August the New Zealand Business Council for Sustainable Development will stage a "Clean Billions" symposium - bringing technology developers, policy-makers and investors together to help trigger faster growth.
Realising the potential to live up to our clean green image is bigger than politics. It needs a custodian that can take the long-term view.
Peter Neilson is chief executive of the New Zealand Business Council for Sustainable Development.
(c) 2008 The Independent Business Weekly
The Independent Financial Review
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