Climate Change Commission Chair Rod Carr more or less told the Government on Saturday that its current path to net zero greenhouse gas emissions by 2050 won’t work.
Carr’s argument was part of National’s Blue Greens Forum, which included a speech from Leader Chris Luxon who in arguing that National could be the party of the environment advised business that it must be about more than simply making profits.
His speech was another illustration of how he is positioning National much nearer the centre of the political spectrum.
The Forum is a unique political institution in New Zealand in that it invites attendees from across the political spectrum. Organisations National generally supports such as Energy Resources Aotearoa were there but so also were Generation Zero and Greenpeace.
It was founded over 20 years ago by a group of environmentalists, including former Nelson MP Nick Smith.
This was his first Forum since he resigned from Parliament last year, and speaker after speaker paid tribute to his work in founding the Forum and also his role as National’s Environment Minister for much of the Key Government.
The Chair of the Forum, National’s Environment spokesperson, Coromandel MP Scott Simpson, emphasised the Forum’s bipartisan theme by highlighting the bipartisan nature of the support for the Zero Carbon Act, which commits New Zealand to a net zero carbon economy by 2050.
But it is the “net” part of the commitment that is widely misunderstood, and Carr set out to destroy some illusions that surround it. Those are principally in two areas; carbon sequestration in trees and the purchase of overseas carbon credits.
He stressed that he was speaking as Rod Carr, a member of the Climate Change Commission, not as its chair. In other words, what he was saying was not official Commission policy.
Last November, before he left for the UN Glasgow climate summit, Climate Change Minister James Shaw conceded that two-thirds of the savings New Zealand was committed to making by 2030 would come from offshore credits.
He said that was likely to cost between $900,000 and $1.5 billion a year.
“Our hands are tied by our history and the fact that we failed to reduce emissions or get our economy ready,” he said.
Carr said that the Commission had calculated that New Zealand was likely to be 100 million tonnes of savings of greenhouse gas carbon short by 2030.
If (hypothetically) we had to purchase credits at the current Emissions Trading Unit price, that would see the GovernmentGovernment have to pay $850 million a year to offshore entities.
That would be almost twice the size of the police budget and bigger than the $720 million budgeted this year for the Department of Conservation.
But on Saturday, Carr questioned the feasibility of relying on offshore credits.
“No one knows who you’d buy that from, what you’d pay for it, and how certain you’d be that you could enforce what you bought,” he said.
“There is no global market.”
He said some deals had been done. One involved Switzerland paying South Africa to set up a solar array to generate power and, in turn, closing down a coal-fired power station.
But Carr said he didn’t know what there was to stop South Africa from building another coal station somewhere else.
“There are questions about the enforceability of these agreements,” he said.
“They can feel good on the day, but you and whose army is going to go to South Africa and stop them firing up that coal-fired power station and keeping the solar array.”
There are also issues about price.
What if the price of purchasing overseas credits proved to be much lower than the New Zealand ETS price?
That could collapse the ETS market, which would see its incentives and penalties designed to lower emissions rendered useless.
But buying offshore credits is not the only workaround to get to the net zero figure by 2050.
Trees can absorb carbon, and thus there are ETS credits available for plantation forests, and now farmers are seeking credits for riparian and other plantings on their farms.
A proposal for this is contained within Waka Eke Noa, the plan from 13 agricultural organisations to price methane emissions from farms separately to the ETS.
The Blue Greens Forum has a strong farmer presence within it, so Carr specifically addressed the Waka Eke Noa proposal, which the Commission has already said it opposes.
“And then we come to vegetation and the reasoning that says if you going to charge me for my emissions, I want a credit for everything I sequester,” he said.
“The first partial answer to that is the ETS is the way we’ve chosen to price carbon sequestration in the New Zealand economy, and there are real risks to setting up a separate pricing system that is only accessible for a certain class of New Zealand citizens.
Carr said that for farm plantings to be considered they would need to be able to be measured and would need to be permanent.
“So the conclusion was that we shouldn’t put vegetation in that if there were a case for financial assistance,” he said.
“Counting vegetation is an extremely expensive way of figuring out who you are going to give money to.”
Carr conceded that the Commission had not got some of its media messaging right up to now.
“Therefore, we are making an attempt to try to say this is the basis of our advice,” he said.
“This is why we provided the advice we did.
“The government’s got the challenge now trying to square the circle in a way that is going to lead to creating the certainty that business needs because if they do something that is completely unable to be supported by the next government, whenever that might be, business will make decisions that will inevitably be much more shortsighted because that’s how you manage that risk.”
That theme of the interface between the GovernmentGovernment, business and the environment was picked up by Luxon in his keynote address.
He argued that National should be the party of the environment.
And he did so with a veiled reference to the leadership of Judith Collins, who was sceptical about National’s support for the Zero Carbon Act.
“I don’t think our message to the public and to our members about our position on the environment has been 100 per cent clear,” he said.
“So I want to sort of reset that in the spirit of new leadership, to actually come back and say, look, I think the days where the National Party just does the economic stuff and the days when the Labour Party just does the social stuff and leave the Greens and do all the environmental stuff; that doesn’t work because we know is so much co-dependency on all those agendas and all those issues.
“I think there is a real opportunity for the National Party to step up to that space and actually say, look, we’ve got a different approach.
“We’re very committed to the ends; the means by which we deliver those end may be different from the GovernmentGovernment, but actually this is our point of view and is something we go to.
“The most significant point of difference between National and Labour and the Greens is that they believe that we have to choose between prosperity and the environment, and I believe that we can actually have both and that each actually supports the other,’ he said.
He cited his experience at Uniliver and later Air New Zealand with the British environmentalist Jonathan Porrit (son of the first New Zealand-born Governor-General, Arthur Porrit).
Porrit helped Luxon develop a corporate sustainability plan for both companies.
Luxon believes that business’s responsibilities extend to a wider group than simply their shareholders.
“Business has a primary responsibility to strengthen the society that it is part of, and it moves from a shareholder point of view to a stakeholder point of view in terms of how you run those businesses,” he said.
“And I learned that very clearly when I was a young guy; one of my heroes was a guy called Viktor Frankl, and he was one of the great Holocaust survivors, a great psychiatrist, and wrote a book called ‘Man’s Search for Meaning’, and it was a brilliant commentary on Western civilisation.
“He famously said that everyone could see the Statue of Liberty on the East Coast (of the USA), but there should be a statue of responsibility, metaphorically on the West Coast and that as a businessperson, you can have liberty to run the businesses as you see fit, but you have a huge responsibility to strengthen the society you are a part of.”
This message resonates with the kind of National Party members who are part of the Blue Greens; they are liberals.
And you only need to look across the Tasman at the so-called “Teals”, who are breakaway Liberal party members who want action on climate change and other environmental issues.
It is possible to argue they cost the Morrison Government the election.
There is little doubt that Luxon is deeply sincere in his stakeholder approach to business, but it may also be a very politically smart move for National to make.