Former National cabinet minister Wayne Mapp asks what the party’s green policy might look like.
The National party has won plaudits for pledging to support the new Climate Change Commission. Climate scientist James Renwick, for example, writing for The Spinoff, welcomed the prospect of “meaningful and long-lasting policies implemented that genuinely reduce our greenhouse emissions”.
So does this mean that all parties in parliament will now work in lockstep to bring about such policies? After all, over a 30-year period there will inevitably be both Labour and National led governments.
There are precedents. National superannuation is virtually beyond political gamesmanship, as are the independence of the Reserve Bank and the Fiscal Responsibility Act. The latter even led to Labour’s Fiscal Responsibility Rules which set the fiscal parameters for government policy during this term of parliament. It was part of Labour’s strategy to show they could be trusted to run the economy.
Climate change policy is more complicated. While there might be general agreement on the goal of zero emissions, there are many different ways to get to that goal. Some will be bipartisan, others may not be.
Take, for instance, Labour’s policy to ban all new oil and gas exploration permits, without even an exemption for Taranaki. Announced without notice and without consultation, National could hardly be expected to sign up for that.
So there will be differences, as well as similarities, in how the goal of zero emissions is achieved. Perhaps the best starting point is the likely similarities.
The core of how New Zealand deals with emissions is the Emissions Trading Scheme (ETS). This has complete buy-in right across the political spectrum. The differences primarily are around the extent to which it applies to agriculture.
There is general agreement that planting trees is the easiest path to getting to net zero emissions. In effect forests can be planted to offset farmland emissions, and most other industrial emissions, while improved technology and science is developed that will actually reduce them. In addition, New Zealand has a huge amount of land that would be better in trees than in marginal farmland, if only to reduce landslides and silting of rivers.
For most of us, the ETS is the domain of arcane accounting and applied science. Very few of us will actually have any dealings with the scheme. But the basics are straightforward enough. If you emit you need to buy ETS units to offset your emissions. If you lock up carbon you get ETS units as a credit. The current cost of ETS units is around $20, way up from the bad old days when it was possible to buy Ukrainian units for a few cents. The purchase of these units was banned in 2014.
At the current price of $20 per ETS unit, University of Canterbury professor Bruce Manley estimated that 15,000 hectares per year of forest would be grown, but if the price increases to $50 per ETS unit, the land planted would increase to 50,000 hectares per year. Within 20 years that would be an extra million hectares of forest. This is the amount of additional forest that former commissioner of the environment, Jan Wright, estimated would be required to offset methane emissions from our current dairy herd.
What does this practically mean?
At $50 for an ETS unit, a pine forest will generate $1,800 revenue per year in ETS credits. That is $90 million annual revenue for 50,000 hectares, which is $44 million more than is earned at an ETS price of $20 per unit. The government could pay this $44 million to the forest owners each year as a subsidy to encourage the extra planting. Of course, it will be more complicated than that. A lot of the additional land would have to be acquired, people trained, tree nurseries established, and trees planted and pruned. The reality is that the annual cost to the government will be much more than $44 million.
The point of this is what it means for agriculture. National is currently opposed to the inclusion of animal emissions which make up around 50% of all New Zealand emissions. Labour wants them in, but with a large exemption, which will be progressively phased out. However, a joint project between Fonterra and the government to establish 1 million hectares of forest to offset methane emissions from New Zealand’s dairy farms is a potential pathway forward to including livestock emissions in the ETS. As the forest is established the exemption could be phased out. Dairy farmers would each be part of such a project through their shares in Fonterra.
The other major contributions to New Zealand’s greenhouse emissions are transport and industry. It is widely accepted that electric vehicles are the best way to reduce vehicle emissions. There is no real indication that New Zealanders’ love affair with the car is going end any time soon. The nature of our cities and our countryside mean that for the great majority of people car ownership is virtually essential. So how is the shift to electric vehicles going to be made within the next few decades?
It is likely to be carrot and stick. National will prefer the carrot. For instance, this is a case where a rebate equivalent to the GST could be made, given that it is unlikely the price of electric cars will ever be as low as internal combustion engine cars. Norway and Britain have already said they will ban the sale of all new petrol and diesel cars from 2040. They won’t be the last nations to take this stance.
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Green policy is not just about climate change. New Zealanders are deeply concerned about water quality and the decimation of native birdlife. The Land and Water Forum was established by National to give advice to government about what needed to be done to improve water quality in lakes and rivers. It bought all interest groups together with the intent they arrive at their recommendations by consensus. That meant no-one was likely to get exactly what they wanted. Forest and Bird pulled out in March 2017 because they did not think they got enough.
New Zealand, in comparison to Nordic nations, often struggles with the idea of consensus. For many it represents a lowest common denominator, rather than a decision arrived at after extensive consultation among the group. Often that consensus will be far more ambitious than originally envisaged, precisely because of the extensive consultation and education that goes along with it.
The new parliamentary commissioner for the environment, Simon Upton, a former National Party minister for the environment and who was chosen by all the parliamentary parties, will have a key role in pushing all political parties toward consensus on these issues.
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