James Shaw. (Photo by Hagen Hopkins/Getty Images)

James Shaw and the zero hour

Greenpeace hate it. So do farmers’ groups. But James Shaw is determined that the Zero Carbon Bill forges a fair path to a net-zero future. Toby Manhire sits down in a parliamentary corridor with the climate change minister to discuss the bill, and why he’s been bending over backwards to win National’s support.

For James Shaw, it was the culmination of “a personal 20 year journey”, said Jacinda Ardern, with what sounded like a mixture of admiration and sympathy. She and her climate change minister were addressing a small crowd of media and other interested parties in a Beehive meeting room yesterday morning for the unveiling of the Zero Carbon Bill. Heralded at the very top of the list in the Labour-Green post-election agreement, the legislation is designed to put flesh on the bone of New Zealand’s commitments to dramatically curb emissions of greenhouse gases, in line with the deal struck at the 2015 Paris climate conference – to arrive, in the space of just three decades, at net zero carbon emissions.

Ardern is right about the 20 year journey. At the end of the last century, Shaw, then in his 20s, was working in sustainability, and became increasingly preoccupied with the impact of climate change. Before long he had resolved that a political solution was critical. And now, here it was. After months of delay and thousands of hours of negotiation with parties from across the house, how does it rate?

I put that to Shaw later in the afternoon. Out of 10. Let’s say zero is a blank bill and 10 is the bill you might write without anyone interfering.

“Probably a seven or eight,” he says. The bill was a bit like “our own little version” of the Paris deal, which sketched out the aim to limit the increase in global temperature to 1.5 degrees Celsius by 2050.

“You could drive a fleet of buses through the Paris agreement, but it did unlock this enormous momentum in New Zealand and around the world. And so I see this as a much tighter ship than the Paris agreement. It’s got its imperfections, and maybe some of those will get cleaned up during the select committee process. But I think it’s a pretty good start.”

We’re sitting on a plump sofa outside the government whip’s office, in one of the long corridors that flank the debating chamber. The Carbon Zero bill has been tabled, and Shaw has popped out between Question Time and the general debate, unknowingly missing the day’s high parliamentary farce as Nick Smith was “named” and ejected from the house.

The bill is only a few hours old, but has already come in for heavy criticism. Farmers’ groups are furious as what they perceive to be disproportionate demands being made. Methane – the gas that amounts for about a third of New Zealand’s greenhouse gas emissions, mostly projected towards the atmosphere from the burps of cows and sheep – has a carve out, but they’re still slated for a steep drop, beginning with a 10% reduction by 2030.

From a very different direction, Greenpeace is denouncing insufficient sanctions for failure to meet targets. “Imperfections” doesn’t come close to capturing the characterisations of the bill from the Russel Norman, who is not just the head of Greenpeace NZ but also Shaw’s predecessor as co-leader of the Greens. It was “toothless”, unenforceable, he said. The independent Climate Commission established to oversee the targets was insufficiently empowered. The whole exercise, Norman went so far as to say, seemed like “virtue signalling”.

“I disagree with that interpretation,” says Shaw, with a diplomatic stillness. There is “forward looking accountability and backward looking accountability”, he says.

How’s that then? “So let’s say there’s a climate change minister in the year 2030. Who isn’t me. You’ve just gotten to the end of the 2030 budget. Turns out you missed your target. That climate change minister couldn’t have made any difference to that, because the set of decisions that will result in hitting or missing the target in 2030 would have been made years before that minister came into office. That minister can’t be held responsible for that set of decisions that led to whether or not we hit that target. But the minister who did make that decision – let’s say, me – could be held responsible,” he says.

“If you look at the provisions in the bill, it says that essentially policy decisions are challengeable. You can get a judicial review. Let’s say the Climate Commission in 2021 recommends to parliament what the first three emissions targets are, up to the year 2035. And then the government, in the form of the climate minister, says: No, we’re not going to take that advice, we’re going to do something else. Somebody could get a judicial review of that decision, to say: Why on earth did you not follow the advice, do you somehow have better advice? In that sense there is a legal process.”

The Climate Change Commission, meanwhile, is tasked with delivering five-yearly “emissions budgets”, but appears to lacks the muscle of, say, the Commerce Commission – an example that had been floated in the past as something of a model.

“There are a number of models – there’s a spectrum. The Reserve Bank is at the far end of spectrum, where they have decision making power,” says Shaw, clicking his fingers, “and parliament’s got nothing to do with that. As they demonstrated today, when the Reserve Bank governor cut the OCR again. So we did examine that model. But when we consulted on it, the vast majority of feedback was that people felt that because the distributional impacts of these decisions can be so great, actually it should be a political decision. So what we’ve done is set up a mechanism where the commission recommends, then the government has to respond as soon as possible but no later than 12 weeks, and then what the government proposes to do has to go to parliament. So we basically took a steer that people wanted it to be a parliamentary process.”

James Shaw at parliament. Photo: Toby Manhire

A lot of Shaw’s time over the last year or so has gone into discussions with members of other parties, attempting to garner bipartisan support for the bill. You’ve been working hard on that, I suggest – “very hard,” says Shaw with a sardonic laugh. “I’ve bent over backwards, and some people argue forwards too, to get them on board.”

Shaw has won the backing of the government partners, Labour and New Zealand First, even if the latter was itself a battle at times. He doesn’t need National’s votes to get the bill across the line. So why is he so keen to get it all the same?

“It’s important because it reduces the chances that a future government will come in and biff it out. I mean, they could. But generally what happens is if a party votes for legislation when they’re in opposition they will uphold it when they’re in government. So when I have gone and spoken to people on my side of the house and to the environmental groups that have been pushing the Zero Carbon Bill and others, I’ve said to them: tell me what is more important. Do you want this thing to last for 30 years or do you want it to be perfect? And what they’ve said is that they need it to last for 30 years, because there’s no point in having a perfect piece of legislation that get thrown out three or six or nine years down the track. If you think about that 30-year target, it’s got to survive three or four governments in that time. And things are only going to get harder in the future, not easier.”

National voiced a muted, and qualified, support for the bill in a press statement yesterday – after Shaw and Ardern had taken care to praise them for being “constructive”. So what odds will Shaw give to the party of opposition saying aye? He tilts his body to one side, stares at the ceiling, laughs, and says: “One lesson over the last 18 months of being in government is never quantify how confident you are about anything until the ink is dry.

“Look, they’ve operated in a way that has been unusually nonpartisan. They really have. We’ve been talking to them for just under a year. They’ve had plenty of opportunity to give us a good kicking, to really blow it up politically, or make hay out of it. They’ve chosen not to do so. So they have engaged in really good faith. There are certainly elements of the bill that are directly due to things they’ve proposed to us. So where we’ve landed doesn’t reflect everything that they wanted. But it doesn’t reflect everything that anybody wanted it. So we’ve given it to them and said, well, look, you now need to examine it in the round and decide.”

National’s main argument with the bill is the methane target. Is that 10% by 2030 figure up for negotiation? “There’s always,” says Shaw, before changing tack. “There’s a parliamentary process.”

Might it fall back then to, say, 8%? “The thing is I would have to have it proved to me that any counter-offer on what we’ve put in there would meet the goal of living within the 1.5-degree envelope,” he says. Early objections from National, and from a number of the agricultural sector industry organisations, were relying on a report from the parliamentary commissioner for the environment. “The difficulty is that that PCE advice is built on a different set of assumptions. It’s built on the idea of a two-degree world. It’s also built on the idea of no further warming above the current pathway, which is actually more than that. So if you want to live within a one-and-a-half-degree envelope, you have to do more than what that advice was suggesting.”

It’s a fiddly, complex subject, and if your eyes are glazing over at degree-envelopes, percentages by twentysomething and pathways, you are not alone. It boils down to this, says Shaw: “The problem is – and this is why we basically said that’s a provisional target, and we’re going to kick it to the commission – is because no one has done the work on the assumption of staying within 1.5 degrees and what that looks like for New Zealand. So we’ve taken, basically, the best science we could get, which is the IPCC, which says what the world has to do to live within 1.5 degrees, and said: Let’s plug that in for the moment and get started, and get the homework done.”

The methane-carbon split isn’t as simple as different rules for agriculture and the rest. It behaves markedly differently. In fact, methane is worse, for as long as it’s around. “Methane is orders of magnitude more damaging to the climate when it’s in the atmosphere, it’s just in the atmosphere for an orders-of-magnitude shorter period than C02. The problem with C02 is it mounts up and mounts up and mounts up and stays there for bloody years,” says Shaw.

“All the ag people, and others, they’re right. We’ve got to get our C02 emissions down. But because C02 is cumulative as long as you’re emitting any of those long-lived gases into the atmosphere, the effect of methane interacts. If you get to net zero long-lived gases, or if you go negative, you could relax your methane number.

“Farmers are interpreting that as ‘they’re asking us to work harder’. That’s not actually correct. It’s the interaction of the basket of gases at any one time.” Another metaphor: “It’s like having a series of levers. So you could have a lower methane target, but that means you’d have to have a steeper long-lived gases target –get to net zero in, say, 2040 or 2030. That may be possible. But that means you’ve got to shut down all the coal-fired milk drying units that Fonterra have. It means you’ve got to flip the entire vehicle fleet to electrics in under 30 years. It means you’ve got to take Huntly offline. So it’s not that farmers are picking up the slack of other industries. There’s a kind of burden-sharing balance that you have to strike across the economy.”

Back on that 10% target: the straightforward way to do it is to reduce the size of herds. Right? “Yeah,” says Shaw. “Simple, but not necessarily effective. You know, different farms in different parts of the country have got different options. Destocking and focusing on profitability rather than production has actually been demonstrated in trials to be enormously successful both in reducing emissions and in increasingly profitability of the farm. So that may well be one of the things that a number of farms adopt. In other places that may not hold up, so they’ll be looking at other solutions.”

The greatest challenge of the whole undertaking, of course, is the how – and the how relies heavily on uninvented, sometimes unimagined, technologies. Asked about overestimating the power of technology as a panacea, both Ardern and Shaw have invoked moon landings: they didn’t know how to do it, they were just determined to get there, and so on. It’s a powerful image, but is it really a useful analogy. That was a pulsating race for geopolitical primacy, but if they hadn’t managed it, no one would be that bothered. It was quite substantially less important.

“Much less important,” says Shaw. “Yeah, it was a dick swinging exercise between the US and the USSR. That’s what it was about.”

In the absence of a cooling war, then, isn’t it dangerous to put too much faith in one giant technology leap for climate-kind? “A couple of answers to that,” says Shaw. “The 10% [methane reduction] by 2030, everything that we’ve seen from the ag sector suggests that’s achievable … Yes it gets speculative further out, but it’s also further out. The other part is that I have this firm belief that innovation is a function of constraints. So when times are good you tend not to innovate, because it’s like, well, I’m making money, don’t fuck with it.

“But when you get a constraint, that’s when you really have to get innovative. A few years ago, when the global commodity price collapsed for milk, and it went to under $4, you saw an enormous amount of business model innovation going on on dairy farms, to try and work out, how do I keep making money even while the farm-gate price is four bucks? That’s where a lot of farmers discovered they could deintensify, reduce their input costs in terms of supplementary feed and fertiliser and so on, and it meant they were essentially lowering their production costs, which meant they could break even, and when the price recovered they were making more money than their neighbours down the road.

“So I think that when you set a target, and it’s eye-watering, it’s beyond what’s currently technologically available, that’s a constraint that forces innovation.”

In between the morning’s presentation of the Zero Carbon Bill and his obligations in the house, Shaw took part in a NZ Alternative hosted event with economist Kate Raworth. The British author of Doughnut Economics, who appears next weekend at the Auckland Writers Festival, emphasised that New Zealand was firmly on the global radar for anyone looking at sustainable futures – a “beacon”, even.

How much did all of that – the idea of projecting a message to larger economies – figure, especially given that New Zealand feels less irrelevant on the world stage in 2019 than it does most years.

“That’s been part of our thinking,” says Shaw. “That we need to maintain the momentum of the Paris Agreement. You’ve got countries like the US and Brazil and others, who are kind of dragging the chain or going in the other direction, and you need countries to visibly step up and say, no, we are going to maintain that momentum. So it is important to us to be one of those countries.

“Not necessarily the first or the best, or anything like that, but just to say: look, this is important, and it isn’t going to work for just some of us to do this. It’s really important. People are looking at us to see what we do.”


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