The Government yesterday announced its intention to ratify the Paris Agreement on climate change before the end of the year; a move it conceded could knock $3.6 billion off the gross domestic product post-2030.
It says this could reduce household income by $`1300 per household.
The cost will not be a direct impost but rather the effect of the measures that will be required to meet the country” commitment to reduce Greenhouse Gas Emissions by 30% over their 2005 level.
The cost is contained in the National Impact Analysis tabled in Parliament by Climate Change Minister, Paula Bennett.
In many ways, it marks a significant shift in the Government’s attitude to climate change which has been much more obvious since Ms Bennett became the Minister with, as she puts it, an end to the debate about the science.
Even so, the Analysis finds it difficult to quqaniotfy any advantages that may accrue to New Zealand from signing the agreement.
It says New Zealand produces only point one six per cent of global green house gas emissions.
Therefore any move we make is symbolic rather than real.
It lists the key reasons to sign as:
- To contribute to global collective action on climate change
- To help protect New Zealand’s economic, social, cultural and environmental interests
- To encourage others to take action on climate change
- To maintain our positive international reputation and our ability to influence international
climate change processes.
It does not quantify the potential economic impact of climate change on New Zealand but lists the biggest potential impacts as sea level rise and increased frequency and severity of flooding, wildfires, and drought
.It says some sectors, including farming, fishing and forestry, are especially vulnerable to the effects of climate change.
The Commissioner for the Environment, Jan Wright, has for some time been asking the Government to set up a working party to look at thee economic and fiscal impact of climate change, particularly on sea level rise.
And yesterday Bennett announced that she was establishing a group of technical experts to look at things like the effects on infrastructure and economic growth.”
Terms of reference and membership for the group would be released within weeks, she said.
The analysis also raises the question of security threats to New Zealand as a consequence of climate change.
“For example, climate change-related disasters may displace people and accelerate migration, in particular within the Pacific region,” it says.
“This could lead to more instances of New Zealand’s involvement in disaster risk management and immigration pressures.
“Climate change impacts on oceans may increase pressure on Pacific and Southern Ocean marine living resources.
“This may pose challenges to New Zealand’s ability to provide environmental stewardship in the region.
“New Zealand’s geographic location means that it is affected by climate change impacts on the Pacific, the Southern Ocean and Antarctica.”
Regarding practicalities, the Impact Assessment says New Zealand has few low-cost opportunities to reduce emissions domestically compared to other countries.
A high proportion of New Zealand’s emissions (49%) are produced by the agricultural sector.
It says the agricultural sector is globally recognised as having limited cost-effective technologies and opportunities to reduce emissions.
“New Zealand also has high levels of renewable electricity generation compared with other countries (over 80%), so there are fewer opportunities to reduce emissions omparatively.”
But along with Ms Bennett’s working party, Government Ministers announced two other groups to advise on climate change.
“The Biological Emissions Reference Group will bring together a wide range of agricultural, horticultural and farming stakeholders to collaborate with Government and build a solid evidence base,” said Primary Industries Minister Nathan Guy.
“This will ensure we have the best possible range of information on what can be done right now to reduce biological greenhouse emissions.
“The group aims to seek consensus on what can be done to reduce emissions and meet the challenging 2030 target, ensure that we have the right science, and that costs are minimised.”
Associate Primary Industries Minister Jo Goodhew announced the formation of a Forestry Reference Group to test evidence, analysis and policy options with sector experts.
“Forestry is a major part of the economy and plays an important role in helping us meet our long-term climate change commitments, while also delivering economic and environmental benefits here at home,” said Goodhew.
“This group will help road-test any proposed changes to forestry in the Emissions Trading Scheme.”
Regarding direct fiscal costs the analysis says future climate finance contributions from New Zealand will be considered as part of future budget cycles, but will likely be a modest progression beyond pre-2020 climate finance contributions.
Overall, the analysis says New Zealand expects to meet its target to reduce emissions to 30 per cent below 2005 levels by 2030 through a mix of: domestic emission reductions; the removal of carbon dioxide by forests; and participation in international carbon markets.
The main emission reductions will come from the elimination of the two for one ETS subsidy; encouraging the uptake of electric vehicles and investing in public transport including urban cycleways; – developing energy targets and encouraging energy efficiency.
It is also clear from the analysis that much will be expected from the forestry sector which raises the question as to whether the Government will consider policies to discourage the further conversion of forestry into day farms.
Ultimately what this document says is that climate change is an economic game changer.
Managing it is going to be an important political priority over the next 15 years.