The environment, already a hot topic in this election, will be the greatest policy challenge for the next government, writes Rod Oram.

“…the shift from the old economy to a new, low-emissions economy will be profound and widespread, transforming land use, the energy system, production methods and technology, regulatory frameworks and institutions, and business and political culture.”

So wrote the Productivity Commission in its recently released issues paper on New Zealand’s transition to a low-carbon economy.

While the work will be long and hard over the next few decades, the benefits will be great, the Commission added. Drawing on the extensive work of the OECD, it said: “Specifically, the gains from investing in low emission, climate-resilient infrastructure or green innovation and technology deployment will more than offset the impact of higher energy prices, tighter regulatory settings, and high carbon assets that may become economically stranded before the end of their economic life.”

The OECD also gave us a stern warning about our environmental policies, practices and outcomes in its once-a-decade review published in March: “New Zealand’s growth model…has started to show its environmental limits, with increased greenhouse gas emissions, freshwater contamination and threats to biodiversity.”

Many of the issues are inter-linked. For example, high intensity dairy farming is polluting water as well as air. But if we made big strides fast on water quality, use and pricing, farming systems would diversify and improve economically and environmentally, while reducing their adverse impact on climate change.

This is the conclusion of an extensive study commissioned by Compass-NZ, an all-party group of backbench MPs. The work by Vivid Economics of the UK lays out various pathways to New Zealand’s future of net zero carbon – in line with the ultimate global goal required to keep climate change manageable – and the crucial role of agricultural transformation in it.

The report and slides are compelling.

However, on our current trajectory, we will spectacularly miss the climate commitments we have made to the global community, as the Commission shows in this chart.

Failing on carbon means we are also failing on our other areas of deep unsustainability such as agriculture, transport, infrastructure and urban areas.

We are already experiencing some reputational damage, such as the recent piece about Canterbury dairy farming in the Wall Street Journal.

But that was mild compared with the damning indictment a film crew from one of our major consumer markets could produce. To illustrate this danger, I gave some presentations a decade ago playing the role of a UK documentary film-maker.

Everything I said was factually correct, though I made scant mention of the efforts we were making at the time to clean up our act.

As it turned out, they were ineffectual anyway. Almost all the key measures of the health of our land, water, atmosphere, species and ecosystems have worsened since, as the government’s report Environment Aotearoa 2015 catalogued.

Next June, the Productivity Commission will offer a way forward with its final report on our low carbon transition. This will entail “profound and widespread” change of practices and culture in business, politics and wider society, to recap its quote above.

It will add its expertise and analysis to plenty already on the table from the Parliamentary Commissioner for the Environment, the Vivid work commissioned by backbench MPs, the OECD and other credible researchers.

Civil society – people and organisations in business and all other areas of life – will lead our transformation. But we need the government to set national goals and policies. This is an immense task. It will take a government capable of dealing with great complexities and vested interests, while offering hope and confidence.

So which Party?

The crucial election question is: which party is the most capable of leading such a government?

National is running on its environmental track-record. For example, it says it made an “ambitious” pledge in New Zealand’s Nationally Determined Contribution to the Paris agreement.

Not, so says Carbon Action Tracker, a consortium of reputable climate researchers. Its report on us ranks us 29th out of the 31 countries it evaluates. It says:

“We rate New Zealand ‘inadequate’. Current policies are expected to be far from the NDC target to reduce emissions by 30 percent compared to 2005 levels by 2030. In the absence of sufficient climate policies, the government intends to make use of its “creative accounting” rules for the forestry sector, which, if applicable, would result in it artificially achieving its 2020 reduction targets without any improvement in mitigation policies or real reductions in emissions.”

Sure enough, our gross carbon emissions are going up, while forestry’s absorption of carbon is going down.

When Climate Change Minister Paula Bennett went to the United Nations in New York last October to ratify our Paris pledge, she promised to outline a suite of climate policies by the middle of this year to deliver on it.

She didn’t. Now, as deputy Prime Minister as well, she is promising climate policies at some unspecified date after the election, if National wins.

‘We’ll just buy credits’

Meanwhile, National has had one big new climate idea. It says we will buy other countries’ carbon credits to help us meet our commitment.

Yet, there is no certainty such a market will develop under the Paris agreement; the cost of such credits could cost $14bn over 10 years, officials told Energy Minister Judith Collins on her first day in office; and by doing so, we would be investing in other countries’ low carbon transformation not in our own, leaving us competitively disadvantaged.

National is also far behind on governance of carbon policy. More than 20 countries have an independent parliamentary commission that sets long term carbon goals, then measures their governments’ policies and achievements against them.

The UK pioneered such legislation in 2008, and cut its net emissions by 23 percent by 2015. Over the same seven years ours rose by 21 percent.

All political parties in New Zealand are pushing for such a commission here – except for National and ACT.

Water is our next biggest environmental challenge, not just for the intrinsic value of healthy aquatic ecosystems but also for the signals that sends to what is best farmed where and how.

Labour failed abysmally on water quality and allocation during its nine years in government in the 2000s. By comparison, National has made some progress during its three terms. But it devalues every effort it makes by accommodating vested interests rather than challenging them hard.

For example, some form of modest royalty on water is a logical tool for driving better water use, as Labour proposes. But inane responses by the ministers of finance, agriculture and treaty negotiations undermined the credibility of them and their party.

Reforming the RMA

The third big environmental challenge is how to reform the Resource Management Act. It has been much amended in its 26 years to date, yet its environmental and economic shortcomings are greater than ever.

These were laid out last year in a cogent paper by the Environmental Defence Society, Infrastructure New Zealand, the Property Council and the Employers and Manufacturers Association. They called for a Royal Commission to determine the next generation of environmental legislation.

There is a clear party-political divide on these three biggest environmental issues of climate, water and legislation:

On one side, National is arguing for more of the same that has got us into this mess, while ACT wants wholesale abandonment of even those measures, and NZ First has a hodgepodge of contradictory policies.

On the other side, Labour, the Greens and The Opportunities Party clearly articulate the challenges, are ambitious for change and have substantial policies to deliver on the strategy the OECD advised in March in its 10-year review of our environmental performance:

“Developing a long-term vision for a transition towards a low-carbon, greener economy would help New Zealand defend the ‘green’ reputation it has acquired at an international level.”

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