Former Reserve Bank chair and Canterbury University boss Rod Carr will have a “useful sense of independence” as he guides New Zealand towards its first emissions budget, says Climate Change Minister James Shaw.
The chair of the soon-to-be-created Climate Commission says New Zealand will find its “easy wins” when it comes to curbing climate change, just as the UK has succeeded in cutting coal emissions.
But it will also have to face hard decisions, and people need to leave behind climate NIMBY-ism, he suggested.
Minutes before the new chair was named, glaciologist and climate researcher scientist Tim Naish told the Environmental Defence Society’s climate change and business conference that the United Kingdom’s per capita carbon emissions are on track to reach net zero by 2050, but New Zealand’s carbon emissions are noticeably not – even if agricultural emissions of methane and nitrous oxide are excluded.
Shortly afterwards, former Reserve Bank chair and University of Canterbury head Rod Carr was named by Climate Change Minister James Shaw as the leader of the commission that will seek to turn that trend around.
Carr was Vice Chancellor of the University of Canterbury following the Christchurch earthquakes, and received both praise and criticism for his handling of the university’s restructuring both before and after the earthquakes.
Before that, he was deputy governor and chair of the Reserve Bank. Carr has also been a director of ASB.
By appointing someone with governance and finance experience, but no obvious background in climate policy, the Government is following the path taken in the United Kingdom, where the climate commission’s inaugural chair was Adair Turner – an economics-trained former vice-chairman of Merrill Lynch Europe.
Shaw referenced Turner when announcing Carr’s appointment, and stressed Carr’s risk management credentials – Carr has a PhD in insurance and risk and he managed the university during its recovery in post-quake Christchurch. Shaw said those skills would be needed to work through risks to New Zealand from storms, fires and sea level rise.
Carr’s skills on the risk adaptation side of the climate equation would help ensure a balance between avoiding climate change and coping with it, Shaw told the conference.
Carr was a little emotional when media asked why he’d wanted the job.
He’d retired from full-time employment after he left Canterbury University, he said, but when the job came up, all four of his children had urged him to do it, he said. “I am passionate about the cause. The reality is, we’ve just had the next bunch of grandchildren [and] they are going to live with the reality of these (climate) choices. They are not in a position to choose. They trust that their parents and grandparents will make good choices for them. That’s a pretty compelling burden to have,” said Carr.
The United Kingdom has served as a partial model for New Zealand’s carbon zero ambitions, since that country was successful at turning emissions around after appointing its own climate commission 10 years ago.
Like New Zealand’s proposed commission, the UK commission is responsible for setting emissions budgets and advising the government on how to achieve them, though it doesn’t have binding powers.
However, some commentators have questioned whether the UK is approaching climate crunch-time, having already made the easier changes to decarbonise its economy.
Asked if the amount of coal burned in the UK before the commission’s appointment had given that country easy wins compared with New Zealand, Carr said the commission would find New Zealand’s own low-hanging climate fruit.
“That was their easy win, we will have different easy wins,” he said. “The challenge is to identify what they are and move quickly to deal with those, and recognise that other things may take longer and be harder. It is a transformation. We cannot convince everybody that someone else is going to make the adjustment, but not me, not my household, not my business.”
Asked what our winning strategies might be, he gave a truly commissioner-like answer: “I will let the technical experts begin to weigh the costs and benefits and pathways and options.”
Carr likened the challenge and pace of change required to move to a net carbon zero economy to the economic liberalisation reforms and oil shocks of the 1980s. This time, he said, the transition needed to be better-planned to avoid inflicting similar pain.
“It took time (in the 1980s), jobs were lost, new jobs were created, assets were stranded,” Carr said. “We went into the 1980s with 50 percent of on-farm income from government subsidies and 10 years later our farming sector was able to stand on its own feet. That gives me confidence we can do these things … but we should learn from those transformations because some of the collateral damage and the impacts and distribution of costs and benefits were not as wisely thought about at the time as they should be today.”
Shaw, meanwhile, described the process of appointing the commission as like naming a “fantasy football team”.
Collectively, the commission and its secretariat are intended to include people who know about climate science and policy, Te Ao Māori, economics, climate communication, leadership and governance, and other specialties, as well as including people with knowledge of farming and other major industries. A secretariat will give technical support to the commissioners, and might be used to fill the gaps in the commissioners’ own experience.
Shaw wants the commission in place in the next few months so it can start preparing the country’s first five-yearly emissions budget, which is due in early 2021.
However, the commissioners can’t be formally appointed until the Zero Carbon Amendment Bill is passed (something Shaw says will happen by Christmas). Right now, the bill is still with the environment select committee.
That makes Carr the chair-designate for now, with the remaining six members of the commission to be finalised and announced by the end of the year, with Carr’s input.
Assuming the Bill makes it through Parliament, the group would then switch to holding official positions – though Carr said today that Shaw had indicated he did not want all positions to come up for re-appointment during any one Parliamentary term, suggesting the new commissioners might be given rolling or staggered terms.
Quite how independent the commission will be, and how powerful, has been debated throughout the Zero Carbon Bill submission process.
As in the UK, the commission will be independent, and the Government will be required to explain itself if it wants to deviate from the commissions’ recommendations.
But the final decision whether to implement the recommendations will be made by the government of the day, following the UK model and in line with the Ministry for the Environment’s recommendations to Shaw.
Giving the Government final veto means the commission will lack the Reserve Bank’s power to enact its own decisions, a limitation that disappointed some Zero Carbon Bill submitters, who fear future governments will back away from hard decisions.
But Carr said giving the Government the power was the only appropriate set-up for a democracy. “The only way to do (it) in our western democracy is to make the elected representatives of us responsible for the hard choices, but they need to be well-advised,” he told journalists. “The advice needs to be transparent, evidence-based and constructed after consultation. And it needs to put the government of the day in the position to have the courage to make those tough choices and to carry the country with them. We’ve seen in the UK that such a model can be effective.”
Shaw acknowledged some submitters had been disappointed, but said Carr’s Reserve Bank experience would give him a useful “sense of independence” from the government of the day. The Bill proposes giving governments a time limit to respond to the commission’s recommendations, something Shaw said was a tightening of the original UK model.
Another question in setting up the commission was whether it would report to Parliament and be appointed by it, rather than the government or ministers. Reporting to Parliament, as the Environment Commissioner does, is seen as the more independent option. However, that is not what’s proposed for Carr and co.
Shaw has led the appointment of the first batch of commissioners. Asked if there was a risk that successive governments would try to stack the commission with their preferred candidates, a la the United States’ Supreme Court, Shaw said his level of involvement in appointing the first commission was a “one-time only event” because there was no zero carbon law setting up the commission yet.
He was required to consult with the Opposition, Cabinet leaders, and others before making a recommendation.
In future, under the new Bill, a nominating committee will appoint members of the commission, he said. Would the minister get the final say? “Technically it’s the governor-general,” he said.
Carr said Shaw had already suggested staggering the appointments so that no more than two positions came up in any given year, and so that no one term of Parliament would see a wholesale change in commissioners. “That would give the government of the day the ability to have influence but not outright control,” said Carr.
Shaw told the conference some members of the interim climate commission – which has already produced reports on renewable energy and agricultural emissions – were likely to be rolled over to the permanent committee but he couldn’t yet say who. He predicted that the path to cutting emissions would turn out to be cheaper than projected now, as it had in the UK.
Carr said science would evolve over time on what was needed to reach net zero, and how, and the commission had to be flexible to change its targets.
Asked what he’d learned in Canterbury and what lessons he’d be taking to the chair’s job, he said: “The important thing is to be humble about what we know and don’t know, to engage that curious mind and scientific evidence to make hard choices but also have a predisposition to act.”
“There is the need to take decisions and make choices and move to the next stage. The learnings from Canterbury were that you need to take the people with you, but you do need to be in a position to take tough choices to get moving.”