In a shift that may reflect the political mood of the times, the Environmental Defence Society’s conference in Auckland yesterday focused on economic solutions to environmental challenges.
By the end of the day, the verdict would have been that some economic solutions worked and some did not.
But it appeared to have somehow got offside with the Government in the process.
Speaker after speaker underlined the urgency of the crises, whether they were climate change, biodiversity, water quality or even politics itself.
The head of the think tank, the Koi Tu Centre for Informed Futures, Sir Peter Gluckman, who, among his many other hats, is President of the World Science Council, talked about the threat that populist politics posed to the science on which environmentalists rest their cases.
“We face a number of global threats to the sustainability agenda, in particular, the rise of populism and nationalism across the so-called liberal democracies is a real issue,” he said.
“The fundamentals of populism are to deny the privileged place of scientific evidence and to deny the ability of that evidence to have a particular role in decision making.
Instead, we are seeing a rise in short-termism across democracies, social democracies around the world, and a denial of the need to fight for issues like sustainability, and a loss of focus on Sustainable Development Goals (SDGS) as a whole.”
The Chief Scientist from the United Nations Environmental Programme, Andrea Hinwood, dramatically underlined that loss.
Speaking by video link from Nairobi, she said one million of the world’s estimated 8 million species were estimated to be threatened, and the world had seen a 26% decline in biodiversity per decade across all of the indicators for the last 30 to 50 years.
But she suggested there was still hope for climate change.
She said that 2024 was the warmest year on record, that we were at an average of 1.34 to 1.41 degrees above pre-industrial temperatures.
“I want to be clear here, the Paris targets talk about a 1.5 degree temperature increase above pre-industrial levels,” she said.
“It’s an average.
“At the moment, we have not hit 1.5, and we still have an opportunity to actually do something so we don’t hit 1.5.”
New Zealand’s response has been what is supposed to be a market answer to the problem, the Emissions Trading Scheme. (ETS)
Fine in theory, but in practice, it is leading to the massive and increasing afforestation of farmland, particularly sheep and cattle hill country.
Carbon forests, distinct from production forests, are not harvested and do not produce timber.
They are simply left to grow and absorb carbon.
The Parliamentary Commissioner for the Environment, Simon Upton, told the conference that if we continued to emit carbon dioxide and failed to reduce gross emissions, we would need to plant more and more forests.
“This will lock up more and land in carbon forestry, effectively removing future land use options and further disrupting rural communities,” he said.
“We are committing future generations to maintaining a much larger forestry estate in a much warmer world.”
Upton’s solution is to phase out the ability of new forests to earn carbon credits under the ETS and the scheme, without the new ETS units generated by the forests, would soon face a demand-supply crunch and the ETS price would rise.
That would (theoretically) raise the price of fossil fuels and other carbon-intensive products, thus (again, theoretically) lower the total annual tonnage of greenhouse gas emissions.
The political appetite for that is unlikely to be big. Governments are very reluctant to raise the price of petrol.
Couple the possibility of the ETS component of the petrol price (currently 18 -20 cents a litre) rising and add in the possibility of an Auckland congestion charge, and any Government would be nervous.
Upton disagrees.
“A rising carbon price would likely lead to increased revenue from auctions, which could then be used to fund native afforestation initiatives in the areas that need it most, such as areas with highly erodible soil or whenua Māori,” he said.
“As a fossil fuel user, I like the idea of having to pay to undo some of the past damage we’ve wreaked on our landscape.
“I actually think it is a very saleable political proposition.”
But if the ETS is an economic solution that is in favour politically but currently failing environmentally, Ben Taylor, a senior Westpac advisor on Environment, Social and Governance banking, told the conference of the success of the Bank’s rural sustainability loans, which, paradoxically, are out of favour politically but succeeding environmentally.
They are controversial and a New Zealand First private members’ Bill in the name of Andy Foster would make a bank liable for a fine of up to $50,000 if it offered one customer a loan on less favourable terms because of “any direct or indirect environmental, social, or governance consideration” or “any climate-related reporting standard.”
That is precisely what Westpac does with its rural sustainability loans which appear to have been something of success.
Taylor said that just over a month ago, $3.7 billion of lending was for rural sustainable loans, equating to around 45% of Westpac’s term lending to the agribusiness sector.
Clients who take up these loans are required to be audited against a robust set of criteria, including their efforts to mitigate methane emissions.
In return, they get a reduction of 0.2 per cent in their interest rates.
“We’re hugely encouraged by the uptake of our farmers and how they’re leaning into this and not only for the incentive and the lending discount, but increasingly they’re recognising the commercial benefits of taking these steps towards being more sustainable and resilient,” he said.
“So, a requirement of our sustainable farm line, which is not currently in some of the other industry assurance programs, is to have a climate change resilience plan.
“And creating a resilience plan requires an assessment of vulnerabilities, risks and opportunities over a long-term horizon, and this is very helpful as that aligns with the mindset and thinking needed when making decisions around sustainable land use.”
The Westpac idea, that the economy, business, and environmental solutions can all go hand in hand, was a theme picked up by the EU Ambassador to New Zealand, Lawrence Meredith.
“We need to make nature work with us and not work against nature,” he said.
Meredith warned that making a late move to cope with global warming would simply cost more.
“The European Union has got out there and is globally leading in climate tech, in renewable energies, and we believe that there is no planet B, we believe you need to green the economy, and to transform your economy, transform your society, yes, and transform your politics too so that you support the goal that is inevitable with global warming, that you have a greener economy,” he said.
This emphasis all day on the intersection of the economy with environmentalism might have seemed an obvious platform for a National-led Government.
But Bishop’s opening remarks were pointed and seemed intended to provoke.
“We are not blind to the fundamental importance of the environment,” he said.
“We need to remember that the foundations of this country are built on having a sensible balance between the economy and the environment, and we have been balancing these two for generations.
“This country would not be where it is today without the sometimes-uncomfortable truth that in order for us to thrive, we require things like roads, houses, power, arable land, and yes, mines.
“Unfortunately, somewhere along the way, quite a few New Zealanders seem to have forgotten this.
“They already have nice homes, so they don’t understand why we need to build more.
“They can afford houses near where they work, so they don’t know why some people need cars and therefore need roads.
“They already have jobs, so they don’t understand why the West Coast needs more jobs and therefore needs mines.
“The jobs they have pay enough for them to not notice the higher power bills, so they understand why we need more wind farms or solar farms.”
Sounding more like a Labour Party Minister, Bishop went on: “Let me tell you this, not everyone is so lucky. We have a generation of Kiwis growing up without homes, without easy access to transport, without job opportunities, at a high cost.
“This Government is determined not to stand by and watch this decline.”
Bishop’s speech was somewhat at odds with a presentation by the Ministry for the Environment.
Deputy Secretary Anne Haira, who is responsible for partnerships, investment, and enablement for the Ministry.
She set out the various ways the Ministry worked on ways the private sector could invest in environmental outcomes.
“ We have a goal that we never achieve; to keep maximising the contribution investment makes to environmental outcomes,” she said.
That goal was partly borne of fiscal necessity.
“It’s no secret that the country’s finances and therefore scope for government investment are highly constrained.
“It’s a reality that all interests must recognise.
“Alongside the fiscal context, New Zealand faces significant challenges from climate change and biodiversity loss, necessitating significant investment.”
She said many of the country’s most threatened and at-risk native species and habitats were on private land, necessitating the mobilisation of private action.
“Globally, environmental investment is accelerating, reflecting a mix of compliance obligations, market access requirements, consumer expectations, wider ESG-type goals, and growing interest in philanthropy and environmental legacies,” she said.
“We also know that other countries are actively advancing their interests.”
She said the Government had been open to developing a sustainable finance strategy and was interested in public-private partnerships for afforestation.
“These are important examples of the government making clear its own position with the aim of accelerating New Zealand’s appeal and competitiveness for environmental investment,” she said.
Unfortunately, Bishop’s speech did not address these issues, which went to the heart of the conference’s theme and pointed to a substantial change in the direction of the environment from the Government.
But the EDS had at least one political friend, the former National Party Minister, Simon Upton.
“Thanks to EDS for having me here today,” he said.
“The. EDS is the preeminent environmental organisation in New Zealand that knows how to run the best conferences, “ he said.
“It knows how to convene people, it understands the need for a growing economy, and it understands the need for a sustainable environment.
“And so, it’s refreshingly broad-based.“
What was discussed yesterday was important and marked an acceptance from the mainstream environmental movement of the need for the Government and business to work on economic solutions to the country’s various environmental challenges.
