National’s new economic advisor has today produced a paper which jars with the party’s previous climate change policy and raises questions about how much longer the party’s bipartisan support for the Zero Carbon Act will continue.
That support has been driven by the chair of the party’s Blue Greens group, Scott Simpson, who, along with Todd Muller and Simon Bridges in 2018, negotiated National’s support for the Act with the Government.
Matt Burgess has been the New Zealand Initiative’s senior economist, and has now been appointed economic advisor to the National caucus but today the Initiative has published a paper written by him; “Pretence of Necessity: Why further climate change action isn’t needed and won’t help.”
The paper argues that existing climate change reduction policies are enough, and further policies are optional but not necessary to reach net-zero emissions by 2050.
That implies that no more work is needed to reduce emissions from our two biggest emitters; the transport and agriculture sectors.
Yet National favours more fossil fuel reductions and supports current moves to make farmers account for their methane emissions.
At its heart, this debate is about whether the Emissions Trading Scheme actually reduces greenhouse gas emissions.
Those who question this argue that other policies are needed alongside it to get emissions down.
Underlying this argument is the 2050 goal which is expressed as a net reduction; in other words, total gross emissions minus what are called emissions offsets such as pine forests.
Already Climate Change Minister James Shaw has had to concede that under current policies, two-thirds of New Zealand’s reductions will come from the purchase of overseas emissions units.
Speaking last November on the eve of travelling to the Glasgow Climate Change Conference, he made it clear he wanted to see a reduction in gross emissions.
“I think we should be doing a whole lot more, especially given the kind of rubbish record historically,” he said.
The Climate Change Commission, in its emissions budgets published last May, said that if the ETS price went to $50, then that would encourage sufficient exotic forest planting to enable the country to reach net-zero by 2050.
Planting could exceed the Commission’s estimates, given that the current ETS price is $73.45.
Converting farmland to forestry is currently running at a high rate. Between 1990 and 2019, it is estimated 769,702 hectares of farmland were converted to forest.
The Climate Change Commission said its forecast would see an additional 1.1 million hectares planted in forest before 2050.
These plantings have provoked a strong response from hill country farmers who, through the “50 Shades of Green” movement, have (unsuccessfully) lobbied to have a limit set on the area of farmland that can be converted to forestry.
Federated Farmers has been becoming increasingly vocal, expressing its concerns about the rate of conversion of farmland.
Burgess concedes that there is a danger that as the ETS price rises so an excessive number of trees could be planted.
“A better (direct, low-cost, low-risk) solution is a cap on afforestation or reduced rewards for forestry in the ETS,” he said.
He says that if the ETS price were to rise to $68 (which it has), then 10% of existing farmland would be planted in trees by 2050 and 19 per cent by 2070.
With this level of planting, by 2050, New Zealand’s net emissions of long-lived greenhouse gases would be negative, and by 2070, New Zealand’s net emissions of all greenhouse gases, including biogenic methane, would approach zero, he said.
“This third finding suggests (near net-zero emissions for all greenhouse gases by 2050 with the ETS at $68) suggests New Zealand can fully deliver on its emissions obligations without exposing agriculture, this country’s largest export sector, to an emissions price,” he said.
This argument flies in the face of current National Party policy and also the widespread debate currently going on within the farming sector over how dairy farmers will account for their emissions.
National supported the current legislation with some qualifications such as a stronger commitment to balancing emissions reductions against the need for food production and what progress other countries were making to emissions targets.
But they also proposed (unsuccessfully) that the conversion of farmland to forestry be reviewed by June this year.
Todd Muller moved a supplementary order paper which said the review should consider the social, economic, cultural, and environmental impact of activities “undertaken for the purpose of generating offsets from removals from land use, land-use change, and the forestry sector.”
And in what is a clear contradiction of the overall thrust of Burgess’s paper, Muller called for the review to consider “the degree to which the use of offsets generated from removals from land use, land-use change, and the forestry sector reduces any incentive created by the 2050 target for the New Zealand economy to transition away from fossil fuels.”
But the report argues that “decarbonisation” — or transitting away from fossil fuels — is not necessary.
“That transport emissions must come down seems close to a universal truth among policymakers,” it says.
“Transport emissions do not need to come down to reduce net emissions.”
The National Party now has a political problem. Its economic advisor is the author of a set of policy proposals that directly clash with its own long-established climate change policies.
Furthermore, what he is proposing runs counter, certainly to Federated Farmers’ current thinking, and probably much more widely across the rural sector, particularly on the east coast of the North Island.
Simon Bridges, Todd Muller, Scott Simpson and the Blue Greens have worked hard to move National on beyond climate change scepticism, and though Burgess is not a climate change sceptic, his fundamental proposition that New Zealand does not need to do anything more to reduce greenhouse gas emissions is going to put him at odds with, at least, the liberal wing of the caucus.