Low-emission economy difficult but essential - report

A new report by the Productivity Commission says New Zealand faces a hard road in its transition toward a zero-carbon economy, but experts warn we have no choice.

The draft report, titled 'Low-Emissions Economy', recommends the New Zealand Government include agriculture in its Emissions Trading Scheme and force businesses to disclose the financial impact of their climate policies.

"Our report shows that major changes will be needed", says Productivity Commission chair Murray Sherwin, who acknowledges the difficulties but says the problems are surmountable.

"While the challenges of achieving a low-emissions economy are large, the scale of change involved in the transition is comparable to transitions that have occurred before in New Zealand."

The report says changes in land usage will be comparable to those already seen over the past 30 years as beef and sheep farming converted to uses such as forestry and dairying.

Scientists warn that regardless of difficulty, rapid change is essential as global temperature rise is approaching dangerous levels.

"We have no choice but to transition away from all fossil fuels starting from now," says Prof Ralph Sims of Massey University.

Prof Sims says if low emission targets aren't reached by the majority of nations worldwide within 30 years, the world's climate may become "untenable".

The reports key recommendations include:

  • a clear statement be released by the Government about its long-term commitments for its transition to a low carbon future

  • an emissions pricing scheme that includes phasing in agriculture

  • regulation such as a 'feebate' scheme for imported vehicles, incentivising buyers towards cleaner cars

  • more Government spending on low-emissions research and development, especially for agriculture

  • enforcing mandatory financial disclosures from business about climate risk.

Prof Sims says the current challenge for the Government is to remain bold in its convictions as "many industries, businesses, and members of the public have yet to come to terms with what a low-carbon future for New Zealand implies".

He highlights the public pushback to the Government's recent decision to issue no further permits for oil and gas exploration, as an example of how resistant some sectors of New Zealand may be to change.

Not all academics have been pleased with the report. Dr Nigel Isaacs of Victoria University calls it "a timid, backward-focused approach to a problem requiring bold future looking vision".

Political will

Green Party co-leader James Shaw believes a 30-year transition is doable.

"Thirty years ago the internet didn't exist, and that kind of forms the basis of our modern economy. That also meant a lot of disruption in some industries, but we've actually handled that pretty well," he told The AM Show on Friday.

He said we've got "the luxury of 30 years of foresight" to manage the transition.

The Productivity Commission is currently taking public submissions on the report and will present a final copy to the Government in the second half of 2018.

The full draft report is available here.

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