4. Managing climate change and building a low-carbon economy

Climate change is both the planet’s greatest challenge and an opportunity for New Zealand. Building a low-carbon economy creates sustainable broad-based economic growth and more jobs, improves economic sustainability and ensures New Zealand has the flexibility to meet new challenges. Countries that reduce their carbon dependency and develop carbon-friendly technologies most quickly will be the most prosperous. To make the greatest gains from a transition to a low-carbon economy we must invest in education, research and development, and our workforce.6

Making the transition to a low-carbon economy needs to be carefully managed to avoid shocks and to ensure the burden does not fall disproportionately on low income families and small businesses. The principles of fairness, participation and adapting social services are an important part of the process of a just transition.

Above all businesses need regulatory certainty and a clear indication of the Government’s plan for reducing emissions. The Government has a long-term target of a 50 per cent reduction in greenhouse gas emissions from 1990 levels by 2050. However the medium term commitment only equates to 11 per cent by 2030 which places a huge burden on New Zealand for the following two decades.7

There is also no strategy of how we can reach our targets which will mean we will end up being forced to buy international credits from other countries to cover the cost. Paying for carbon credits to meet our targets means we will have less to spend on actually making our transition and will limit our ability to invest in core services like health and education. Other countries, such as the United Kingdom, have a body charged with producing carbon budgets. Carbon budgeting and such a body would provide a well-planned pathway for meeting emission reduction targets. It can help smooth the transition to give certainty to businesses.

The currently ineffectual emissions trading scheme must be restored so it does what it was intended to do – put a price on carbon that assists the transition from carbon-polluting goods and services towards low or zero-carbon options. This would incentivise behaviour that would make a real difference to our gross emissions and –through the forestry sector – our net emissions. The omission of agriculture from the scheme also creates issues. There is no effective lever to help diversify our economy or to incentivise the commercialisation of emission reducing technology.

Climate change will drive new jobs in new industries and fundamentally change existing work in existing industries. The International Labour Organisation has found that policies facilitating climate transition are employment generators. Combining economic growth with environmental improvement can lead to net gains of up to 60 million jobs globally.8 However jobs will also be put at risk and are already being affected in New Zealand. Sanford’s closed its Christchurch processing plant costing 250 jobs due to the warming ocean impacting on the growth of mussel sprat. Increasing droughts are also affecting our farming sector.9

Discussion questions:

  • Is a long-term carbon reduction strategy or budget useful for providing regulatory and planning certainty for industry?

  • How should the emissions trading scheme be strengthened to drive transition to a low-carbon economy?

  • How should we prioritise transitioning and “future-proofing” existing industries and sectors and promote new low-carbon businesses?

6   Pure Advantage, New Zealand’s Position in the Green Race, http://pureadvantage.org/wp-content/uploads/2015/04/PURE-Advantage-initial-report.pdf

7   Hon Tim Groser, 7 July 2015, Climate change target announced, http://www.beehive.govt.nz/release/climate-change-target-announced

8   International Labour Organisation, 12 June 2012, Working Towards Sustainable Development: Opportunities for decent work and social inclusion in a green economy, http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_181836.pdf

9   Stuff, 10 April 2015, http://www.stuff.co.nz/business/industries/67674016/sanford-blames-warming-sea-for-christchurch-plant-closure.html

NIWA, 17 April 2015, Are we experience more droughts?, http://www.niwa.co.nz/news/are-we-experiencing-more-droughts