The Carbon Challenge: New Zealand’s Emissions Trading Scheme
Geoff Bertram and Simon Terry
Bridget Williams Books, $39.99,
You will remember Pascal’s Wager. Blaise Pascal (1623-62) was a French mathematical prodigy and philosopher who suggested that even if you are doubtful about the scientific evidence for it, you’d do best to wager or act as though God exists, because you’ve really got nothing to lose either way. Whereas, if you mistakenly thumb your nose at an angry deity, the consequences could be eternally serious.
In one sense, anthropogenic climate change due to emissions of greenhouse gases is similar. Even if we have doubts, the safe thing to do is to act to forestall further global warming. If it turns out to be a false alarm – well, we’ve diverted some resources unnecessarily. But if we made the opposite mistake, the consequences could be catastrophic – not hellish in the next life, but in this one.
In another sense, however, it is a very different matter. The scientific evidence for global warming is a heck of a lot more convincing than anything that’s ever been put forward to prove the existence of God. And so, as Geoff Bertram and Simon Terry point out in their passionately argued analysis of New Zealand’s response to the climate change threat, even at the disappointing 2009 Copenhagen Climate Summit, not one of the 182 countries participating presented a sceptic’s view of the science.
What they did shy away from was taking on board the most recent findings, warning that things were getting worse than expected, such that, as one Stanford University scientist put it, “[W]e’re basically entering a domain of climate science that has not been explored by the models. We’re on a different trajectory of emissions and therefore an unknown trajectory of warming.”
Are you getting scared yet? Now, New Zealand was one of those 182 countries at Copenhagen, and current Climate Change Minister Dr Nick Smith has recently reiterated that “we [the Government]) accept the science … we want to reduce emissions.”
So that is good. At least our leaders are not succumbing to the morally bankrupt little trick used by some (usually, but not always, professional climate-change deniers) who say something like: “Look, even if there is man-made climate change, little New Zealand accounts for only one thousandth (or whatever) of the world’s emissions, so that nothing we do can have any conceivable significant effect on the problem.” The flaw here is that you can always divide up the world into little parcels of people, none of which individually contribute a “significant” amount to the total damage and none of which therefore would do anything about it by this criterion.
No, it’s got to be: think globally and act … well, act anywhere we can, including locally and including putting our oar into multilateral congresses such as Copenhagen, Cancun and whatever follows. And that’s what Dr Smith thinks, too. He points out that, on a per capita basis, our emissions rank 11th in the world – rather higher than our per capita income position these days. We have to do “our fair share” about reducing these.
But what is our fair share and how do we do it? In his Robb Lectures at the University of Auckland last year, the economist Nick (Professor, Lord) Stern – author of the best-selling Stern Report – sharpened many people’s insights, including my own. Stern, by the way, is the sort of chap who makes me proud to say I am an economist. He is really smart, really committed and really effective. It’s a great relief that he and a few others of similar calibre are actively involved in the global meetings and negotiations.
Stern told us there are basically three big areas for action. One is using less energy: conservation. The second is producing the energy we do use in less polluting ways – solar rather than coal, for example. And the third is forests – the most important and effective systems for absorbing and storing (“sequestering”) carbon from the atmosphere, though there’s always the future problem when the trees get cut down.
Interestingly, New Zealand’s situation within this setting is a bit different from the norm. You may wonder why we might be 11th in the world in per capita emissions and 22nd in per capita GDP, given that there is no stronger predictor of emissions of greenhouse gases than the overall level of economic activity in a country: the more you make, the more, on average, you pollute.
It is puzzling. We don’t have a preponderance of “smokestack” manufacturing industries – all gone. We don’t drive especially large and gas-guzzling cars, do we? And, unlike most other countries, we do produce most of our electricity from totally non-emitting hydro sources,.
It turns out that it’s not so much what we, the humans do, but rather our farm animals, who collectively account, with their unrestrained chewing and farting and belching, for half our total emissions, two-thirds of this being methane and the rest nitrous oxide (from fertilisers). According to Bertram and Terry, your typical dairy cow has a larger “environmental footprint” than the average car.
This is actually quite good news, because, if there is one truly unlimited resource it is human creativity in problem solving, the application of which to agriculture has historically resulted in huge increases in farming productivity. This could easily be transferred to the problems of reducing emissions, as Bertram and Terry encouragingly document.
The hard part is turning out to be the politics: getting the farmers and scientists (and energy producers, manufacturers and households) to focus on the problem by making them bear the costs imposed on others (the “externalities”) by their emissions. Now, in principle, we have a workable way of doing this. You start with the scientists setting a safe or at least sensible goal for total global emissions, and get all the countries to agree to act on it: this was the Kyoto Protocol of 1997 (yes, that long ago!) requiring each country to reduce its own total emissions of carbon-equivalents to their 1990 level, or pay a price, such as having to purchase emission permits from other countries that have actually exceeded their reduction target. Then, each country figures out the best way to deliver on its commitment, by a mixture of regulatory (eg house insulation standards), fiscal (carbon taxes) and quantitative (tradable emission permits) policy tools.
The political problem is that the heavy emitters naturally don’t like having to pay up, and have been very effective in lobbying our governments for relief. It must be said that the current leadership of New Zealand Federated Farmers has been particularly obdurate, probably to their members’ own long-term disadvantage as well as that of the country at large.
But beyond sorting out these difficulties lies a neglected issue whose unacknowledged enormity for once truly merits the metaphor of the Elephant in the Room. This issue is over-population. Just about all the world’s geopolitical and macroeconomic problems – the big problems affecting masses of people, such as war, famine, pestilence, fuel shortages, environmental degradation and now global warming – are, and always have been, fundamentally caused by the pressure of growing numbers of living humans on one of the two inexorably limited resources: space on earth (the other being, of course, our time on earth). Yet, with the huge and hopefully single exception of China, our leaders – religious and political – either continue to adopt pro-natalist policies, or, to avoid offending those who do, quietly ignore the topic.
So, in New Zealand, we have people who wouldn’t dream of committing the moral solecism of dismissing the need to do our bit to combat climate change because we are such a tiny contributor to the global problem, but who then blithely claim that New Zealand “needs more people” for economic reasons. Some baby-boomers even push for more children now to provide the future workforce that will support boomers and post-boomers in our long retirement years – a position of almost cosmic selfishness in this context.
Any baby born in New Zealand today will inevitably become an enthusiastic if not voracious consumer of the world’s finite physical and environmental resources. We can and must act urgently to pull back their (and our own) profligacy, and the ideas and policies put forward in Bertram’s and Terry’s book can be a big help here. But the eventual, essential goal of long-term sustainability will be made harder and perhaps impossible to reach if we don’t all make parallel progress on the over-population front. If not, we might defer species’ extinction from broiling, freezing or drowning, and still end up all starving to death. Have a nice day!
Tim Hazledine is a professor of economics at the University of Auckland.