Stepping on the gases, Guy Salmon

Burning Issues: The Failure of the New Zealand Response to Climatic Change
Alexander Gillespie
Dunmore Press $24.95
ISBN 0 86469 298 6

Guardians for the Environment
Gary Hawke (ed)
Institute of Policy Studies $30.00
ISBN 0 908935 06 4

Burning Issues challenges New Zealand’s climate change policies in a brisk, easy-to-read style. Its author, Alexander Gillespie, a committed Greenpeace supporter, teaches international environmental law at the Waikato law school.

It is easy to agree with Gillespie that New Zealand has done too little about the threat of climate change. Unfortunately, his book propounds a simple and naive line to follow – one that could make the politics of climate change even more difficult than they already are. Gillespie’s problem is one of perspective. While he lives in New Zealand, his book is basically a view of this country as seen from Europe. His Eurocentric assumptions bear little relation to the situation we face on these islands as we try to formulate our own contribution to the global effort to combat climate change.

European countries certainly deserve credit for their early leadership on the climate change issue, arousing the rest of the world to the need for action. As seen in their overseas development assistance efforts and their environmental activism, Europeans are more willing to take action for the global common good than are many people in the rest of the world, especially the United States. However, in setting the international agenda, the Europeans have framed the discourse with their own assumptions. Their policy suggestions for the rest of the world also build in a canny regard for European self-interest. The European way of thinking about climate change policy has subtly colonised the thinking of many people elsewhere, including the author of Burning Issues.

Gillespie focuses on a particular greenhouse gas source which is important in Europe and which the Europeans can cheaply reduce and then takes New Zealand to task for not matching the European performance on that source alone. He echoes the views of European climate change negotiators by suggesting New Zealand should not be allowed to take account of carbon storage in trees, by urging a major programme of state investment in the transport and energy sectors and by seeing no real problem with the current exemption of the dynamic Asian economies from emission reduction obligations.

Europe is a part of the world where the main contribution to climate change comes from industrial and transport emissions of carbon dioxide. Carbon dioxide fluxes from forests and methane from livestock are a negligible part of the picture. It is a place where most electricity has traditionally been generated from coal and where the growing demand for electricity is now being accommodated more cheaply and with lower emissions by simply changing over to natural gas. It is a place where politicians still command state investment programmes in the economy. Europe is also large enough to form a trading bloc of its own, able to insulate itself in various ways from Asian-based industrial competitors even if the latter are exempt from emission constraints.

Things are different out here on the rim of the Pacific. New Zealand’s main contributions to climate change appear to be carbon dioxide emissions from declining native forests and methane emissions from livestock. It is a place where electricity has traditionally been generated from hydro sources: accommodating growing electricity demand the way Europe has done, by investing in the cheapest technology – natural gas – would create an increase, instead of a decrease, in total carbon dioxide emissions. And unlike much of Europe, New Zealand is a place where nuclear power is not an acceptable option.

New Zealand is dependent upon, and therefore very exposed to, open international trade. Imports of emission-intensive products like cement, steel and aluminium could swiftly force the closure of our own manufacturers of those products, if emission constraints are not required in Asia. New Zealand is also a place where – ever since Think Big – there has been a painfully learned, mainstream political consensus against hands-on political involvement in the productive economy. It is a consensus that many would not want to see lightly thrown away.

Burning Issues shows only a limited understanding of these issues. Despite a brief acknowledgment of the significance of New Zealand’s methane emissions, the book persists in seeing the world through European eyes and thus treats carbon dioxide from energy, transport and industry as the only greenhouse gas source that matters. It stringently criticises New Zealand for being unlikely to stabilise its emissions from that source at 1990 levels by the year 2000. It never mentions that, if methane emissions are accounted as well, New Zealand’s total measured contribution to the greenhouse effect would, by the year 2000, come very close to 1990 levels on an all-greenhouse-gases basis. The reason for this is that our methane emissions are declining, due mainly to the continuing displacement of livestock farming by commercial forestry.

Commercial forestry makes another contribution to reducing the greenhouse effect: it absorbs carbon dioxide from the air and stores it in wood. There is good reason for taking account of this. A tonne of carbon dioxide taken out of the atmosphere and stored in a permanent forest is just as good for the climate as a tonne of carbon dioxide saved from emission into the atmosphere by cutting back on emissions. Such thinking leads to the so-called “net approach” in which all carbon flows, both into and out of the atmosphere, are taken into account. This is a more holistic way of thinking about the climate change issue and it points to a wider range of potential solutions.

However, Gillespie vehemently opposes the net approach. His arguments are a reaction to the cynical way that New Zealand has used the net approach in the past, basically by counting commercial tree plantings as an excuse for doing nothing significant about industrial emissions. Since then, the working party on carbon dioxide policy, a joint public-private review panel, has proposed a way of giving the net approach real integrity, through more comprehensive measurement of forests, and the use of a system of tradable carbon certificates.

2

Gillespie has evidently read the working party’s report because he quotes from it often, mainly where it supports his own views. But he fails to come to grips with the way in which the report’s proposals and arguments have made obsolete the arguments he uses against the net approach.

Gillespie assumes forest absorption would be counted as a credit against New Zealand’s emission limit, that this would let our industry “off the hook” by removing its requirement to curb its own emissions and that this would be unfair to other countries. But he overlooks the effects of international trade in carbon certificates. New Zealand forest owners would be able to earn certificates by absorbing carbon and then sell their certificates to the highest worldwide bidder. To buy certificates and thus obtain the right to emit, New Zealand emitters would be forced to pay the full international price. They would face the same, strong incentive to reduce emissions as any industry anywhere in the world.

Many native forests are seriously declining, because possum browsing is causing extensive tree mortality. The country could curb its total emissions by controlling possums and restoring native forests to good health and/or by reducing livestock numbers and putting more marginal farmland into forest. In doing so it could obtain valuable export earnings from the sale of carbon certificates. This may more than offset the losses frown emission-intensive industries that are forced to retrench.

Climate change strategies like these, based on land use change and forestry, are a potentially important part of the policy response menu for many countries. However, governments are only likely to take such actions if they are allowed to benefit from them. This depends on reaching international agreement on a framework for the net approach, as well as for trading in carbon certificates. The net approach would lower the global cost of stabilising the climate, buy time for democratic societies to reduce their emissions without undue disruption, and benefit forests at the same time. It also creates more options for action. If countries are able to select the most cost-effective options for their own national circumstances, provided the results are properly measured and verifiable, the net approach would enable them to do more to reduce their climate impacts than they could afford otherwise. It is curious indeed that an environmental campaigner like Gillespie should be against such an approach.

Unfortunately, if you live in Europe – either physically or intellectually – these are issues that you do not really worry much about. Your own forests are small and stable and there is not much room to plant more. It is easier to believe that only one thing matters: getting the world to reduce its rate of industrial and transport emissions. To do anything else seems like taking the pressure off the capitalist system, which caused the problem in the first place. The costs of greenhouse action may not concern you – but if they do, it is nice to know that reducing carbon dioxide emissions is the cheapest strategy for Europe and the most costly for Europe’s trading competitors.

So there you have it. European negotiators may yet kill off New Zealand’s proposal for a net approach to climate change, not for any reason that makes sense globally but simply because (like market access for New Zealand farm products) the net approach is deemed not to suit European economic and political interests.

Two years ago, European negotiators did team up with those from developing countries, pressing successfully for developing countries to be exempt from all meaningful emission obligations. There is now no mechanism or procedure for introducing emission limitations to such countries – not even to countries like Singapore, Taiwan and Korea which actually have higher emissions and higher GDP per capita than New Zealand. The corrosive effect of this exemption on many governments’ commitment to protect the climate is not well understood by Europeans, who are sheltered in their trading bloc; and it is not explained in Burning Issues.

In effect, the exemption will lend the dynamic Asian economies a competitive cost advantage in emission-intensive manufactures from the moment developed countries like New Zealand implement emission limits. The threat that a rising tide of imports from Asia might cause several major domestic industries to close down creates a political predicament for any New Zealand government and even more so for Australia, which has 80% of its trade with Asia. It is not surprising that around the Pacific Rim the countries exposed to trade with dynamic Asian economies have become increasingly reluctant to accept meaningful emission limits.

Mr Gillespie informs us that the model of the Montreal Protocol on protection of the ozone layer is one we can learn from and he points to declining worldwide production of ozone-depleting chemicals. However, the Montreal Protocol does not exempt developing countries and Gillespie does not see the significance of this crucial difference.

Ignoring the post-Think Big political consensus, Gillespie calls for major government investments in the economy, especially in the energy sector. This agenda echoes the “policies and measures” promoted by European climate change negotiators. There is much scope for wasting public money here. The author does not really explain why he rejects as inadequate the carbon dioxide working party’s policy approach of simply ensuring greenhouse gas emissions are given a price, so that individuals and businesses can choose for themselves the least-cost means of reducing their emissions.

In democracies, governments cannot easily get re-elected if they take actions that radically disrupt society. In New Zealand, emission reductions will be much more difficult to achieve than in Europe. Nonetheless, making progress would be easier if a net approach to emissions reductions could be allowed: the owners of forest land, or potentially forested land, would then become a lobby in favour of action, to offset the inevitable lobby of opposition from emitters. As well, the country as a whole could see some economic gains to offset the costs of cutting emissions.

The needed cuts themselves would be easier to sell to the public if there were some real gain to the atmosphere in prospect, rather than just a shift to Asian suppliers of emissions-intensive goods. Again, an internationally agreed approach that allowed countries to find for themselves the least-cost way to achieve their emission limits would be better than prescribing policies and measures that may suit Europe but are not appropriate here.

It is very important that the world’s net greenhouse gas emissions are substantially reduced and that New Zealand contributes to this goal more effectively than it has so far. However, this cause would have better prospects in New Zealand politics if Eurocentric views could be set to one side and a bit more effort taken to understand the way things actually are out here in the Pacific.

3

Guardians of the Environment is the edited proceedings of a symposium held last March to mark the first decade of the Office of the Parliamentary Commissioner for the Environment (PCE) and to suggest future strategic directions for the Office. In contrast to the Ministry for the Environment, the PCE sits outside the Government, performing an independent oversight, investigation and review function. It aims particularly to identify system failures and deficiencies in the country’s management of the environment. In practice, its reviews not infrequently endorse, with recommended fine-tuning, what is already being done. Much of its work is targeted at local government.

The Office produces a huge output of reports on a small budget. It is well respected for its independence, its scientific soundness and the general fairness and constructiveness of its reports. These evaluations come through clearly in this volume but the symposium participants – mostly a gathering of the Office’s friends and allies – would have learnt more if some tougher questions had been asked.

In an assessment published in 1996 and reproduced as an appendix to this volume, Ton Buhrs notes that “it is hard to determine exactly what the Office of the PCE has achieved to date”. Unfortunately, this volume does not answer that question. While it induces many generous brief endorsements of the Office’s work, it does not contain any substantial analysis of where and in what respects the Office has made a real difference to policy, management practice or environmental outcomes.

Another question is: “Why are 30% of the PCE’s recommendations – including some of the major ones – rejected or ignored by the policymakers at whom they are directed?” It is too easy to put this down to “political reasons” and to talk about how the Office is a David among Goliaths.

What about the possibilities that a better quality report, a better research and consultation process or better economic literacy by the report-writers, could have made a difference to the success rate? A specific case-study approach, which included inviting those who rejected major recommendations to explain their reasons for doing so, might have shed some useful light on the question.

The symposium did produce some ideas which the new Commissioner, Dr Morgan has incorporated into his strategic plan for the Offices work. Overall, the symposium participants seemed to agree with Ton Buhrs’ suggestion that the PCE should achieve more focus on “barking up the bigger trees”.

Guy Salmon is chief executive of the Maruia Society, was a member of the Government’s working party on carbon dioxide policy and recently attended international climate change negotiations in Europe as an observer.

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