Nick Smith20 May, 2009
- Introduction - Good morning and thank
you for the introduction. - I would like
to offer my thanks to the New Zealand Climate
Change Centre for organising this conference,
for the leadership shown by all of New Zealand’s
Crown Research
Institutes and Canterbury and Victoria Universities
in initiating the centre, and for inviting
me here to talk to you this morning.
Today I want to give
you an overview of Government thinking on
climate change policy – including the complex
issue of adaptation that is the focus of
your conference this year.
It will come as no surprise
to you that tackling climate change is the
Government’s number one environmental priority.
The first point I wish
to make is the scale of the political challenge
posed by climate change.
I have been fortunate
to have held many portfolios during my 20
year Parliamentary career including dreaded
roles like Corrections, but none get close
to the complexity and difficulty posed by
anthropogenic climate change.
First, the science is
mind blowingly complicated. You cannot explain
it in a 30-second sound bite.
Full marks to Gareth
Morgan and John McCrystal for their book
‘Poles Apart’ released last week which gives
the public a digestible take on the science.
The second problem is
that climate change is as much an economic
issue as it is an environmental one. Our
modern societies are so dependent on fossil
fuels that every industry will need to radically
change, and that change will come at a cost.
The third problem is
that our atmosphere knows no national boundaries.
It is the global commons. Unless countries
act collectively to constrain emissions,
all will be adversely affected. Determining
what is a fair way to share the burden of
reducing emissions requires the Wisdom of
Solomon.
And the fourth problem
is this is a long term issue. The recession
is costing jobs today, but the direct impacts
effects of climate change on people’s livelihoods
are decades or more away. So too are the
solutions. There are no quick fixes. The
challenge of climate change is going to
span over several governments and generations.
So my first point is
that we need to be upfront about the size
of this challenge.
It was the policy of
the previous Government for New Zealand
to lead the world on climate change and
to become the first carbon neutral country.
The gap between this
lofty goal and our actual track record did
our international reputation more harm that
good.
The truth is that our
emissions have been growing at one of the
fastest rates among developed countries.
Since 2000, the proportion
of renewable energy has steadily declined
and we have doubled coal generated power
production.
The reversal from five
decades of impressive aforestation to significant
deforestation in recent years has added
to our ugly numbers.
It is just unrealistic
to continue to pretend we are, or can be,
world leaders in reducing emissions.
Our unique emissions
profile, with such a large proportion coming
from agriculture, makes our job of reducing
carbon pollution more difficult than most
developed countries.
We also need to recognise
that as a small open trading nation, accounting
for 0.2% of global emissions, tough emission
reduction policies would just export emission-intensive
industries offshore.
For these reasons, the
new Government’s policy goal is not about
being first but ensuring New Zealand does
its fair share as a developed country in
constraining and reducing emissions.
We have set the achievable
target of a 50% reduction in New Zealand’s
carbon equivalent emissions as compared
to 11000 levels by 2050. In other words
– 50 by 50.
Setting the target is
the easy bit. Putting in place practical
policies to achieve it is what matters.
There is a strong consensus
the most efficient way to constrain and
reduce emissions is by an economic instrument
– either a cap and trade type system or
a carbon tax.
The debate between the
two has raged for more than a decade. In
1995, the then National Government opted
for a low level carbon tax but in 1999 made
a decision in principle for a cap and trade
system and set officials off to design it.
The Labour administration changed tack in
2000, dropping carbon trading and advancing
a carbon tax, and then reversing the decision
in 2006 back to an Emissions Trading Scheme.
This circular debate has become a little
tiresome and needs to be drawn to a conclusion.
As I told the ETS Review
Select Committee, National’s preference
remains an ETS. It has the advantage of
being able to easily recognise sinks like
forestry that are so important in the New
Zealand context. I also note that an ETS,
in which the price of carbon varies as we
have seen in Europe in response to the recession,
has the advantage of automatically responding
to the ebb and flow of the economic cycle.
It makes sense that
we should take more pain with a higher carbon
price in the good times and a lower price
when the economy is struggling.
I would further add
to this debate the international context.
Even if we thought, at a theoretical level,
that a carbon tax was the better tool, Europe
has gone down the ETS route, Australia is
going that way, and the United States and
Japan are also heading that way. It would
be out of sync for New Zealand with just
0.2% of global emissions to head off in
a different direction.
But I want to stress
that the Government has not made a decision
and will not do so until the Select Committee
review has concluded. Subject to gaining
Parliamentary support, National’s preference
as per our pre-election policy, is for a
modified Emissions Trading Scheme.
An important area of
work for the Government is in exploring
how New Zealand’s Emissions Trading Scheme
can be harmonised with Australia.
This work commenced
following the March Summit between Prime
Ministers Key and Rudd. Tomorrow I am having
further discussions with my Australia counterpart
Senator Penny Wong – albeit I want to stress
the work is at an early stage.
The New Zealand Government
sees four significant advantages in harmonisation.
First, we recognise
that climate change is a global issue. Success
is only possible by countries working together.
Australia is our nearest
neighbour in which political, social and
economic links run deep. If we two close
cousins of the global community can’t show
that we can work together on this, we really
are in trouble.
Secondly, harmonisation
of carbon trading schemes, just as with
the advantages of trade, benefits both countries
by ensuring the lowest cost possible mitigation
measures.
Thirdly, harmonisation
reduces the compliance costs. There will
be considerable public and private expense
in measuring, reporting and ensuring compliance
with emissions trading regimes, and these
can best be minimised by a common approach.
Finally, harmonisation
reduces the Trans-Tasman competitiveness
issues. We do not want investment decisions
being made on either side of the Tasman
on the basis of who has the softest climate
change policies.
Recent decisions by
the Australian Government to make changes
to the timing and implementation of its
Carbon Pollution Reduction Scheme has not
changed the New Zealand view that there
is potential for harmonisation.
The underlying goals
of the Australian Government of a 60% reduction
in emissions by 2050 is very similar to
New Zealand’s 50 by 50 goal. Australia is
using a base year of 2000 whereas our target
is relative to 11000.
While an economic instrument
is the primary policy tool to drive emissions
reductions, this will be complemented by
other important policies.
A significant barrier
to building new renewable energy has been
the Resource Management Act.
The irony over recent
decision making under the Act is that it
has been easier to get a consent for a new
thermal power station than for a renewable,
geothermal, wind or hydro-electric development.
Two significant changes
are being made to change this. The first
is the bill currently before Parliament
to streamline and simplify the consenting
process. We want an end to long drawn out
consent procedures with a new crisp Board
of Inquiry process that incorporates both
local and national factors for nationally
significant projects.
Secondly, we are also
pursuing a National Policy Statement on
renewable energy to give a clear signal
to decision makers of the importance of
expanding New Zealand’s renewable energy
base.
Using energy more efficiently
is also part of our programme. Initiatives
to insulate state houses have already been
announced and a new initiative is being
developed to attend to the huge stock of
privately owned, poorly insulated homes.
A very important initiative
is the work being led by Agriculture Minister
David Carter on National’s policy of an
international centre for research on Agricultural
Greenhouse Gas Emissions. I rate this as
the most important contribution New Zealand
can make internationally to the whole problem
of climate change – particularly as the
issue of developing country emissions come
into focus.
A key component of a
successful agreement in Copenhagen will
be commitments by developed countries to
assist developing countries in addressing
their emissions, and this is where New Zealand
can help build a solution.
There are other policies
on solar heating, biofuels, electric cars,
and forestry which the Government is also
working on as part of the new Government’s
climate change agenda.
I particularly note
yesterday’s announcement by Energy and Resources
Minister Gerry Brownlee on biofuels as it
illustrates the different approach of the
new Government to these issues.
Rather than the mandatory
requirement to use a blend of biofuels,
the grant scheme announced yesterday provides
a financial incentive for sustainably produced
fuels. It is a more equitable approach in
that it puts ethanol and biodiesel on the
same footing and it gives the right financial
incentives to the biofuels industry.
You can expect more
of this Bluegreen approach of favouring
incentives over compulsion in our policies
to tackle climate change.
I want to conclude this
broader speech on climate change with the
issue of adaptation.
No matter how successful
efforts are in future to contain emissions,
we already have significant change in the
system.
For New Zealand temperature
rises of about 1degree Celsius by 2040 and
2 degrees Celsius by 2090 are likely, matched
by sea level rises of about 20cm mid-century
and 50cm by the end of the century. Also
projected are higher rainfall in the West,
and more droughts in the East.
Many of the discussions
programmed for today are focused on planning
for these changes. This is an important
part of managing the way forward.
Good long-term planning
is vital for New Zealand to adapt to a changing
climate. But the Government recognises it
is not without its challenges, including:
long-term planning horizons
- making decisions based on future climate
scenarios may cause difficulties for decision
makers
public perception –
providing sufficient information for the
public to understand the likely scenarios
and associated risks for their communities
that climate change
may be just one of many priorities competing
for attention and resources
the current economic
climate
Despite these challenges,
dealing with climate change effects must
be part of existing planning for Government,
local government, businesses and communities.
It is now business as usual.
Managing climate change
effects does not necessarily require new
and additional resources – we just need
to be smarter and take into account the
long term in our planning.
And those of you present
today play a vital role in planning for
the effects of climate change. This conference
brings together a huge range of expertise
from variety of sectors. We have the opportunity
to share knowledge and form partnerships
that will help prepare New Zealand for the
effects of climate change. We must work
together to plan for the future.
Climate Change Adaptation
Work Programme
The Ministry for the
Environment is leading cross-government
work on climate change. The focus of the
Ministry’s work programme is on helping
New Zealanders prepare and adapt to the
physical impacts of climate change.
This work programme
focuses on building partnerships and this
conference is an opportunity to strengthen
the relationships between central government
and planners, engineers, insurers, surveyors,
lifeline utilities, and local government
to build a greater understanding of the
work the Government is doing.
Scoping for a proposed
National Environmental Standard
One of the key pieces
of work that the Government is doing is
on the impact of the projected sea level
rise. I am aware that decision-makers –
especially regional, district and city councils
– need more certainty to better plan for
this. I understand that national direction
on what to plan for would help.
For this reason, the
Ministry for the Environment is preparing
a discussion document scoping options for
a proposed national environmental standard
on sea level rise.
I expect to be in a
position to make further announcements on
this in July after the Coastal Policy Statement
work has been completed.
National Policy Statement
on Flood Risk Management
The other area of concern
for local councils is that of direction
on flood management. The Ministry is also
working on a proposed national policy statement
on flood risk management to give guidance
to councils. This is still in a draft form
and you will hear more about this as the
work progresses.
Conclusion
The Government’s view
is that good planning and preparation are
the keys to adapting to future changes in
our climate.
It is clear that we
all need to work together to prepare for,
and adapt to, climate change and improve
the resilience of our communities in the
face of uncertainty. Everyone has a role
to play.
Our understanding of
climate change and its effects will continue
to evolve. We must act on the information
we have available and make sure we are flexible
enough to make changes in the future.
I look forward to working
with you as we tackle this momentous issue.