The counsel of failure: Greenhouse Policy Coalition on Durban

By Bryan Walker 03/12/2011

’There is a danger that, in trying to encourage major emitters to sign up to a new agreement or to bridge the Kyoto legal gap, New Zealand might commit itself to something short of a global deal that binds us to making economic sacrifices which are not reflective of fair burden sharing.’ So wrote David Venables, executive director of the Greenhouse Policy Coalition, in the NZ Herald this week.

I described the Greenhouse Policy Coalition in a post last year, but I’ll briefly recap. Its members come from a range of New Zealand industry and sector groups covering the aluminium, steel, forestry (including pulp and paper), coal, dairy processing and gas sectors. They include Fonterra, NZ Steel, the Coal Association, Solid Energy, NZ Aluminium Smelters Ltd and others. They are not deniers of climate change and express the cautious opinion that ’there is sufficient scientific evidence to warrant the adoption of appropriate precautionary public policy measures’. However their emphasis is strongly on policy which protects what they regard as New Zealand’s international competitiveness.

This is very apparent in Venables’ Herald opinion piece, timed to coincide with the Durban conference. Hope of an early global agreement on cutting greenhouse gas emissions has gone.  The most we can expect to see is ’incremental, year-by-year, meeting-by-meeting progress, which years in the future may see all major emitters agreeing to make cuts’.

This worries Venables, not because of what it would mean in terms of dangerous climate change, but because we in New Zealand ’face pursuing climate change policies aimed at cutting emissions in the absence of a binding international target, and proper sharing of the burden between countries, after 2012’.

He points to what he calls the ’patchy’ nature of emissions trading around the world and the likelihood that the Kyoto Protocol will become obsolete after the Durban meeting which no-one expects to provide a break-through agreement.

Some sort of political deal whereby ministers promise to do things without a legally binding framework may be possible. At best Durban might produce an agreement from the major players to discuss a binding global agreement. Even this would be a major step forward.  Meanwhile when the Kyoto first commitment period ends next year developed countries will have no binding targets for cutting emissions and there will be a legal gap in the process which could last for years.

It’s at this point that he reaches his major concern, highlighted at the beginning of this post, that New Zealand might be tempted to do more than its fair share. That would be a bad mistake because it would achieve nothing in term of reducing global emissions but would impose significant economic cost on the country.

So rein in your concern, those of you who want us to commit to more action. ’Our ETS already puts us ahead of the rest of the world in terms of incorporating a price of carbon into the economy.’

Venables may well, sadly, be right in his appraisal of where the international negotiations have reached and of how slow and incremental any future progress may prove. But the conclusion he draws for New Zealand is wrong. He appears oblivious to the magnitude of the threat posed by climate change. That threat doesn’t diminish because politicians are having difficulty facing up to it. Indeed it is increasing as we pump more greenhouse gases into the atmosphere. Report after report on the science, the latest from the World Meteorological Organization just a couple of days ago, makes it clear that inexorable change is under way.

How can we settle for competitive advantage as our major concern in the face of something so big as to threaten the survival of whole societies of human beings?  Venables invites us to ignore the larger perspective and focus on the proximate. That’s an inclination which fits very well with many of our instincts, but it doesn’t stand critical examination or moral scrutiny. Brian Fallow, the NZ Herald’s economics editor, put it well in a recent column:

At the most basic level the status quo is a gigantic exercise in free riding. There is a disconnect between where the benefits and costs of fossil fuel use fall.

Our emissions are diffused over the whole planet and accumulate in the atmosphere, a global commons.

The effect is the moral equivalent of a subsidy flowing from poor countries to rich ones and from future generations to the present.

Being on the bludger’s end of this arrangement we naturally don’t want it to end.

Venables’ competitive advantage plea is a plug for the status quo. It’s dressed up to appear reasonable by reference to the need for a fair sharing of burdens and to the economic danger of moving ahead of the pack. For good measure there’s the implication that we’re too small for our actions to have any effect on reducing global emissions anyway.

Of course arguments need to be had about sharing in the task of emissions reduction. Of course China will have to accept limits. So will the US, in some ways the most recalcitrant of the nations. If they don’t we will all, including them, suffer terrible consequences. But countries like New Zealand cannot treat this as some kind of excuse to carry on with business as usual themselves, any more than those who opposed the slave trade in the 18th and 19th centuries could engage in it themselves on the grounds that they might as well share the profit while it continued.

Further action in New Zealand to reduce emissions is in any case not necessarily inimical to the economy, as Venables appears to take for granted with his talk of economic sacrifices. There are plenty of signs that it could be positive for the country to venture a little ahead of where some other countries are prepared to go, that it is an opportunity to be grasped and profited from.

New Zealand went ahead of the pack in the 19th century in the introduction of the eight hour working day and the sky didn’t fall in. We were also early leaders in old age pension provision in 1898, and in many of the features of the welfare state which followed in the 20th century, from which our own Prime Minister benefited in his youth. Why should we shun the forefront in such a fundamental challenge as building low carbon economies?