As an economist, I get a bit annoyed about inefficient spending (which the Roads of National Significance are), and frustrated at the lack of economic thinking that goes into party policies (all political parties come out badly here – e.g. Labour’s Working For Families seriously messed up marginal tax rates and incentives to work more for mid-income earners). But I’m deeply troubled by the dismissive attitude displayed by the current government towards what I see as the biggest challenge of our time, and probably the biggest market failure the world has ever experienced. I’m talking about climate change, by the way.

Climate change isn’t really getting a lot of coverage these days. It’s not forming a big part of the media debate, or political conversations, or everyday conversations from what I can see. One of the few people who has been writing about climate change is Brian Fallow, the Herald’s economics editor. In 2013, he wrote that “the Government’s refusal to do much of anything to curb New Zealand’s emissions is as economically myopic as it is morally contemptible”, but he’s written a number of other insightful articles. Unfortunately, those who don’t read the Business section of the paper may have missed them.

Someone shared a link on my Facebook a couple of weeks ago – it was an image from Generation Zero, our collaborators on the Congestion Free Network. It reads: ‘Last night, we asked Bill English: how will you act to prevent the impacts of climate change?”‘ The reply reads: “it’s a non-issue because there are more pressing concerns”.

I wasn’t at the event where this question was asked, and I’m not sure if it’s a quote or paraphrased somewhat, and at any rate the Minister of Finance probably isn’t the best person to field this question. Nonetheless, the exchange above is a pretty accurate summary of National Party policy on climate change. Essentially, there isn’t one, except to ease back on the schemes put in place under the previous Labour government, which weren’t sufficient anyway.

Unfortunately, it seems that climate change is much less of a pressing concern for people these days. Unfortunate, because it continues to happen whether we’re thinking about it or not. Thanks to a Google tool called Google Trends, you can actually look back and see how interested in climate change people were, based on their Google searches. The following graph shows indexed interest in the terms “climate change” and “global warming”, compared to each other and over time, worldwide:

Google Trends Results - Worldwide

In 2007, the IPCC Fourth Assessment Report was released, everything was going pretty swimmingly in terms of the economy, and it seemed like global warming was always in the news. Environmental stories started to get crowded out in 2008, when the world recession hit, and haven’t really made a comeback – the IPCC Fifth Assessment Report, being released over 2013-2014, was barely a blip.

The graph below shows the same stats for New Zealand, from 2007 onwards – the data before that is patchy. The results are similar to the worldwide graph:

Google Trends Results - NZ

These trends fit with some Gallup poll results which show that, around 2008 and once the recession hit, Americans became generally less concerned with global warming, and more inclined to think it was exaggerated or made up altogether. I’m sure I’ve seen similar results for New Zealand in a report done by Roy Morgan or someone, but I can’t lay my hands on it right now.

I heard Simon Bridges (the Minister of Energy and Resources, and Associate Minister for Climate Change Issues) speak at the NERI Energy Conference in March. His keynote address was filmed (I don’t recommend watching the whole video – skip to the questions from 22 minutes in; the speech text is here but not that interesting), and Professor Ralph Sims later pulled out some of Simon’s key quotes for use in his own presentation:

“Our mixed and balanced approach to energy means that I am motivated by the opportunities petroleum development presents for New Zealand socially, economically and environmentally.”

“But remember, New Zealand is only responsible for 0.14% of global greenhouse gas emissions”.

Simon was also asked about the “90% renewable electricity by 2025” target, which was initially set by Labour but also supported by the current government. I never got round to writing the follow-up post to the one where I talked about the technical feasibility of getting to 100% renewables, but long story short, there’s wide agreement that the 90% target won’t be reached without government intervention, which National has not been willing to provide so far. Simon made some valid points in his reply, but again long story short, the government isn’t likely to change anything. In fact, the one thing it has done in this area is lift the moratorium on new thermal (non-renewable) generation, so if anything that would make the target harder to achieve.

Similarly, Simon didn’t have much to say on what the government planned to do on climate change in NZ, and again I note that they have eased back some of the measures set in place by the Labour government. Simon said there would be an announcement on the subject later this year, and we still haven’t seen anything on this, but presumably there will be something announced before the election. Since the government has gone all in on the “more roads” approach to transport, I’d imagine any policy would involve electric vehicles.

The thing is, we can’t go on just ignoring climate change, wondering whether it’s still an issue, or putting it in the “too hard” basket. We need to take steps to reduce our climate impact and figure out ways to transition our economy appropriately. For New Zealand, that means concentrating on transport and agriculture. Building more motorways is clearly not going to help us reduce our transport emissions. And subsidies for electric cars won’t help much either. We’ve got to invest in public and active transport, and allow our cities (especially Auckland) to intensify. There are so many good reasons to do this; the climate is just one of them.

The government needs to show some initiative on this, and overhaul its transport policies. But we, the public, have to make this a talked-about issue again. Tell the politicians, the MPs and the political parties that climate change is an issue we care about. Tell them that they need to change their policies if they want to earn our votes. Whoever you’re voting for this election, or whether you’re voting at all, tell them what you think, and if they hear enough people talking about it, climate change will be back on the agenda.

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  1. The Solid Energy collapse probably focussed the government’s thinking on alternative energy in all the wrong ways, afterall it was their foray into biofuels that sent them down the gurgler…

    1. That and the governments unrealistic demands for more dividends from SOE’s even if Solid Energy could’t afford to!

  2. It was a foray into Biofuels. please don’t try and re-write history.

    Why anyone would want to handicap an economy by forging ahead on climate change, which may or may not be human induced, is beyond me.

    This is an international issue that requires an international response.

    1. Solid Energy lost $62 million in biofuels over five years ( It was a relatively small factor in the company’s troubles. Solid Energy made an annual loss of $335 million in the 2013 financial year, $40 million in 2012…

      Scientists are overwhelmingly agreed that climate change is human induced, and I’m not talking about handicapping the economy either. Plenty of low hanging fruit, especially in transport, which will save us money in the long term.

      1. I don’t think the Solid Energy board denied climate change, they were simply forced to achieve a political objective by meddling ministers. Government should set the objectives and the let private companies achieve them.

        The problem with Solid Energy was the massive levels of debt brought on to fund unrealistic investment into spurious “clean coal” initiative, whilst still paying dividends. If they hadn’t be forced by ministers to invest these schemes they may well be here today.

  3. Hear Hear, I could not agree more.
    This is the number one issue of our time and it is a complete disgrace that it is not being taken seriously.
    In the future people are going to look back and ask what on earth were this generation doing by ignoring the problem.

    1. Yes, Anthropogenic Global Warming is qualitatively different from other headline-grabbing issues as it’s both existential.. and actually happening. Other existential threats like a massive nuclear war or meteor strike aren’t actually happening, or as far as we know, likely to happen in the same time scale.

      Mitigating and adapting to AGW is surely going to become the overriding issue facing the present and next generation(s). I have to be optimistic and believe that change is coming, albeit frustratingly slowly and late. Much of the developed and developing world is already well ahead of NZ, and moving quite quickly ahead. NZ can choose to lead or be dragged along.

      Meanwhile there is a growing body of literature enquiring into the causes of the inaction. John Cook and co at is right up with the play. “A complete disgrace” on the part of some who should know better is part of the problem. But the picture is much more complex of course.

  4. “In the future people are going to look back and ask what on earth were this generation doing by ignoring the problem.”

    “In the future people are going to look back and ask what on earth were this generation doing by ignoring the problem.
    Who will be around to ask? It won’t be the billions who lived on the margins at what was sea level or who tried to eke an existence out of drought prone land. They’ll be gone. The only people left to ask will be those who maintained til the last their priviledges to consume and emit through money & force and by ignoring those outside their gated communities. And they’ll only have themselves and their dads and grandads to blame. GET READY TO REPENT!!!

  5. *If* climate change is happening as described by the Greens, we’re already past the point of prevention. As such, the logical response is to be prepared to adapt and mitigate. Adaptation and mitigation require the wealth that comes from a strong economy. It’s when we’re wealthy that we have more choice in how we live our lives. It’s when we’re wealthy that we can afford to develop new, better technologies and implement them once they’re effective. In short, any and all of humanity’s problems are best faced from a position of strength.

    Yet, Green policies are all about making our economy weak. Ban oil and gas exploration! Impose impossible costs on dairy! In their rush to feel good about doing something now, the economic damage they’ll do will hobble our ability to react effectively in the future. They talk about a smart, green economy but that’s all about throwing what wealth now have into what technologies we now have. That’ll only make us efficient at implementing these poor, ineffective solutions… to no positive effect.

    Humanity’s defining feature is our creativity. When has mankind ever solved a problem by constraining itself?

  6. Here’s the thing, while 280,000 children in this country live in poverty and millions more around the world have nothing and while the people of Gaza are being maimed I don’t really care about how high the tide will come in in 100 years. That might be heresy to some but quite frankly in my view we have more pressing concerns.

    1. Interesting you should say that. It’s suggested that even limiting warming to 2deg could result in 10m of sea level rise in 300 years. It’s not that long.
      There are plenty of things that happened in the 1700s that affect us today. Imagine if one of those decisions had wrecked the world as we know it- would you be saying “yes, but he had a lot of immediate concerns, so it’s not a problem that he stuffed the world we live in”?

      1. You are closer to the truth than I think you know. The industrial revolution started in the 1700’s and involved burning a whole heap of coal. European nations got rich off fossil fuels and now they expect the rest of the world to go without cheap energy with 1990 being a base year. Global warming is true enough but almost every fix touted so far is little more than a scam. I say focus on the immediate problems and don’t fall into the trap of having NZ adopt punitive measures that wont actually fix the problem but are nothing more than an ‘example’ to the world. ie some show off measures for the enthusiasts who go to conferences. I am ok with a carbon tax because governments need taxes and the money gets spent here. But the rest of it is just big old countries trying to get an advantage.

    2. mwfic, the issues you raise are deserving causes of our attention, to which you add many other good causes for our concern, action and resources.

      But why are any or all of these “either / or” versus mitigating climate change?

      On the contrary, the underlying causes of some of the current issues in the Middle East (e.g. Syria) are climate change-related. And the situation will become much, much worse.

      Worse still, as the IPCC this year analysed, the costs of not mitigating climate change, but adapting to it later are substantially higher, even when those costs are expressed in present value terms. In other words, pro-actively mitigating climate change actually frees us resources to address other issues, such as the ones you highlight.

      Finally, in the context of this post, and the blog, the issue at hand is that mix of transport infrastructure choices that we invest in. The lifetimes of these assets (and their wider impacts in urban and ex-urban forms) are measured in decades.. certainly long after atmospheric CO2 reaches 450 ppm (2030s), equating to a 2C increase in surface temperatures from pre-industrial baseline, by which time (surely?) it’s inconceivable that we will still be burning FFs for personal transport at anything like the rate we do today. Or to put it another way, the reductions required are maybe 7-10% pa from now.

      So, framing this as a transport issue, as I’ve commented before, the really interesting questions are around what will our personal transport options look like in say 15 years? Like John, I doubt (for reasons of cost and availability) we will have switched over to EVs en masse (though, as an aside, that is possibly the one thing that the traditional electricity networks may need to encourage to sustain their current business models in the face of LED lighting, heating and appliance efficiency gains, and the ever reducing unit costs of solar and solar / storage). So, without cheap and widely available FF for cars or wholesale adoption of EVs, what will we do? Use more PT, cycle more, walk more.. travel less.

      1. Sorry I am confused are you discussing climate change or a fuel shortage? I think they are opposite things. Plentiful fossil fuel means more climate change and a higher tide. A shortage of fossil fuels and the answer is the last sentence of your post. Either way there is actually nothing I can do (serious) and probably nothing NZ can do either. We can put on the ‘hair shirt’ of reducing fossil fuels to use higher priced alternatives and what will that do? If foreigners face the same price elasticities we do then our reduction will lower the world price by a very little, that reduction in price will enable other countries to consume more, probably around the same amount as our reduction. Net result is we end up poorer and total fuel use stays the same- but a few people can crow about us doing our part.

        We should improve our public transport system because it would be good to have choices in how we travel, the rest is just BS.

        1. Suggesting that the only thing we should do to reduce GHG emissions is improve PT is a bit limited, mfwic. Looking at the low hanging fruit which actually results in cost savings, we can avoid low-value spending on roads, and make a few other tweaks to reduce our fossil fuel consumption too. Good for the current account deficit, the economy and the environment.

        2. mwfic, the implication of climate change is that we cannot burn all the fossil fuels. We have to keep a large proportion of them in the ground.

          Well perhaps we could burn them if effective sequestration technologies are developed – and that means sequestration over short timescales, not geological ones.. I’m not an expert but it’s not looking promising, especially for personal transport applications.

          So your statement “total fuel use stays the same” is completely out of the question, if you mean fossil fuels.

          Fossil fuels will remain plentiful.. but un-burnable.

          How this is going to be achieved is an open question, but one way or another (carbon tax or whatever) FFs will become prohibitively expensive for the way we use them today.

          Whether we will be poorer as a consequence depends on the extent to which our economy and lifestyles are driven by and dependent on (cheap-ish, not as cheap as they were) fossil fuels.

          This is of course a particular issue for transport, especially transport that can relatively easily be substituted by non-FF powered options. We will still be flying in the 2030s.. but I doubt I will find my SUV which guzzles 8 km / 100L a particularly affordable option for buzzing around Auckland.

          Another thing.. the transport cost maps that were posted here a while ago are going to need some new colours on the scale. This might well have implications for real estate trends in the next 20-30 years.

          About foreigners. A CO2 budget really is a zero-sum game. Do you think we will have a choice, if we want to continue to do business with our major trading partner not to follow suit? actually we do have a choice: it is to follow or to lead. Viewed from Europe or wherever a widespread expectation is that NZ might show a lot more leadership.. by leveraging our renewable electricity potential.

          If you want to keep using FFs, a hair short is pretty much the only kind you’re going to be able to afford.

          1. “Do you think we will have a choice,” Yes of course we have a choice to make. We can either tilt at windmills and hope that others will not use a cheap fuel source and like us “leave it in the ground” or take the view that that is never going to happen and focus on things that are more important like poverty, education, health and prosperity. I am a 100% denier that anything practical can be done about climate change until it has very real and very serious consequences for the rich countries that caused it. Might as well forget about it until then. If you insist on worrying yourself silly about something I suggest you think about ebola for 10 minutes.

          2. OK that’s three false dichotomies.. or three different versions of the same one. I’m out of this thread.

  7. I like the ACT approach. Regardless of whether humans caused it or not, do nothing and let people deal with their own problems when it happens. I’m serious. I see no benefit in NZ spending billions in taxpayer money to hold back an incoming tide. We are literally a drop in the bucket. Unless USA, Europe and China lead the way, there is literally no point in doing anything.

    Climate change is a slow moving giant that will have huge impact over several decades. We have more then enough serious issues to worry about today, than to worry about climate change. Tomorrow Russia could start WW3. Next month we could get hit by an unseen asteroid. In 1 year we could all be wiped out by flubola. In 5 years, nano robots could wipe us all out. In 10 years Transformer(TM) self driving cars will revolt and kill us all. In 20 years, alien space monkeys invade. In 25 years Lake Taupo erupts and brings on a second ice age. All before serious climate change issues could have massive impact on NZ.

    Having said that, we could do our part and make cost effective decisions like pushing renewable energy and reducing oil dependency etc.

  8. I want the world to be at least as good as it was when I inherited it and our children to do the same. Now we are aware of the results of our actions we must amend those actions so that we do not use what future generations will need. We must accept responsibility and carrying on without changing our actions is not acceptable.
    NSW has legislated for minimum feed in tariffs and this coupled with 7 year contracts drastically lifted the introduction of PV power to the Sydney grid. Sure it has generated some problems but those are minor compared with the result. NZ is becoming increasingly Air conditioned and that means mid day power consumption rises in tandem with the sun.
    The current NZ framework for PV to grid needs to be given certainty for the PV uptake to match that of Australia but it is not being spoken of in the present political campaign.
    John, I see in your previous post that you are familiar with the Australian experience, so I would like to hear your views on the feed in tariff and contract options that they used and whether we should be moving along those lines.
    Further I feel that NZ Energy Companies want to tie NZ into the large scale energy schemes (massive dams, geothermal schemes, wind farms etc) when smaller scale investment on the individual farm or home either by pelton wheel or small scale wind generator should be encouraged for grid elasticity.

    1. Hi Ted, funny you should mention solar – I’ve got another post ready to go on it, which should go up in the next few days I hope. TL;DR version – I’m not sold on feed ins or solar subsidies, at least not right now and not at a nationwide level. There may be a case for more targeted, regional intervention, but that should be matched to a particular goal and I don’t see that happening at the moment. Anyway, I’m sure there will be a lively discussion on the post when it goes up.

      1. “Anyway, I’m sure there will be a lively discussion on the post when it goes up.”

        PV paid my salary for 23 years; I shall look forward to that discussion.

      2. John.. I look forward to your post on PV.

        With or without subsidies, or targeted intervention, the cost of off-grid PV solar with battery storage is closing on the price of grid-connected electricity. Helped in part by the EV industry, not least Tesla, if they achieve their planned scale-ups. Big if maybe. But grid parity is already achieved in outback Australia.. and could be for suburban Australia as early as 2018 to 2020. NZ later.. but only by a few years. The point is we consumers can look forward to having a competitive choice about how we power our households. Which has interesting implications well beyond transport…

        1. “the cost of off-grid PV solar with battery storage is closing on the price of grid-connected electricity”

          I will be interested to see what you have to say on this one. “Closing” is one thing; closed is another. Either way it’s battery technology that will be the enabler. PV itself is close to being a commodity.

      3. I wonder if the far north merits special mention for encouragement to solar to reduce the disruptive nature of the Auckland transmission bottleneck and line losses.

  9. Yes, we could rearrange the deck chairs on the Titanic, or we could actually save the planet by doing the things necessary to make a difference, such as replacing the 3% annual compound growth economic model with a 0% growth model.

    But this blog is very much pro-growth. More consumerism, more resource extraction, more people, more buildings, bigger cities……

    The suggestions above are about managing the destruction more efficiently, but how about trying to avoid the destruction in the first place, by voiding the growth mantra that drives it?

  10. There were a couple of good articles on <a href=""The Standard at the time, which related the decision to borrow in order to pay out higher dividends, and a couple of other fiscally irresponsible decisions.

    The mishandling of alternative energy, reminds me of the approach that GE took when it was compelled to meet the Clear Air regulations in the US. A begrudging and half-hearted approach which produced the EV1 which was immediately and completely recalled when they were successful at getting the legislation overturned.

    If we have fossil fuel advocates making decisions on alternative energy projects – some of them will be determined to make those projects fail.

  11. Here’s the thing.

    Don’t stop caring about poverty, but understand that food and clean water security are going to be drastically affected by climate change. It is not about the tide – or the tropical weather some commentators say they are looking forward to.

    It is about another hurdle to jump when addressing access to arable land, clean water and solutions to address poverty and inequality all around the globe.

  12. Thanks John. The thing that disappoints me: that we could have a New Zealand which is so much better for everyone. It isn’t hair shirts – it’s high-tech.

    I think we will get there, though a few decades years later and with a much higher emissions curve (tens of millions of tonnes more) than otherwise. Things like this – a conversion of Wellington’s lighting to an intelligent LED grid – will become common, because they’re better, more efficient, and give us the places and things we want.

  13. All the naysayers say that anything NZ does is a drop in the bucket. I say we can lead by example. Did we decide against women’s suffrage because so many other countries didn’t allow women to vote, why should we buck the trend? Did we let nuclear into our county because that’s what the rest of the world was doing?

    1. “I say we can lead by example”

      Your analogies are not overly relevant. If leading by example were to lead to significant additional costs to products then the danger is that consumers (domestic and foreign) would buy the cheaper products from the environmental laggards and polluters with no net reduction in global GHG and a damaged local economy.

      To give you an example; NZ produces steel from local ore. It’s energy intensive and produces GHGs. Because of the fundamental chemistry there are limited options for GHG reduction. We could tax the emissions heavily and the industry is likely to closed down with steel being imported from China. Net result more GHGs because we have added transport emissions to those inherent in the production of the steel.

      Ruminant animals produce around 50% (IIRC) of NZ’s GHG emissions. Short of reducing their numbers their doesn’t seem to be a clear way of “leading by example). I guess we could tax the emissions but it’s not clear what behavioural changes that would stimulate apart from increasing prices and driving consumers to product from other countries. Net result; no change in GHGs and a damaged economy. Leading by example could be to move our diet away from products from ruminant animals and encouraging others to do likewise but we had better figure out what other industries we have a competitive advantage in.

      Seems to me that for the bulk of our GHG emissions leading by example will not achieve the desired outcome and that effective global cooperation is essential.

  14. With global warming there are winners and losers. Notice how most people only describe the negative effects. All doom and gloom.
    I recently read a article that we would being using more air conditioning in summer due to global warming. OK yes we will. The article did not mention we would be using less heating in Winter if that is the case and only focused on the negative.
    I believe in general NZ will be a winner with higher CO2 and warmer temperatures with our agricultural based economy in a temperate zone (waiting for the negative comments re this positive outlook). We will prosper if we adapt to the changing environment rather than try and stop the unstoppable.

    1. The impacts on NZ will be mixed – see, At any rate, it’s a global issue, not a local one, and the scenario you’re describing would mean that NZ is generating negative externalities on other countries. In which case, we still need to change, since those externalities are likely to be charged for even if we were to say “bugger you lot, we’re alright”. We’ll end up with a successor to Kyoto at some point.

  15. Our media are complicit by allowing this Auto-Petro lobby ‘government’ to stifle , to avoid, to downplay, to ridicule and and to ignore any conversation that reminds us of our individual and our collective responsibility to reduce our greenhouse gas emissions.
    In the lead up to the 2011 elections I called Radio Live and NewsTalk ZB and tried to bring up the issues of climate change and the International Energy Agency’s announcement on the need for New Zealand to be addressing its / our vulnerability to what are now post-peak oil prices . I heard the producer of the Radio Live program yell out ‘get this guy off’. I was cut off mid-sentence . Same on NZTalkZB. I was quite shocked and suddenly realised the extent to which this fossil-fuel addicted paradigm has infiltrated its evil influence.

  16. Thanks MFD, “Ruminant animals produce around 50% (IIRC) of NZ’s GHG emissions.”
    We do need to address that as well. I understand that the primary industry has started but I think that there are other more efficient ways such as understanding our nutrition needs and using vegetative alternatives to ruminant products. I was brought up on ewe mutton and eels with whatever fruit and vegetables Dad could grow. I am a long in the tooth carnivore, however I do grow a lot of our own vegetables but at this stage could not become a well fed vegetarian as I do not understand how to do that. I do believe we can be a lot more efficient with eating what we can grow without passing it through another animal first with all the inefficiencies and animal cruelty that involves in todays factory farming. I feel that with more organic agriculture we could capture more carbon in our soils making them more productive and the food that we grow more beneficial as well as reducing the inputs from the chemical and petroleum industries. Permaculture is a good place to start.
    The other elephant in the room is population growth which is not perhaps appropriate to this discussion but is one that will need to be addressed along iwth the constant growth mantra.

  17. I see we are producing 0.14% of the World’s polution.
    I calculate we are 0.07% of the World’s population.
    If that was all that was involved then we would be producing only twice our share.
    Of course we outsource much of our polution by having China etc manufacture most of our products.
    Rather than purely focusing on reducing our polution production, we could simply work on using less energy. This could be done by using more efficient appliances, vehicles, machinery etc.
    We all like buying new stuff and we can blame the Chinese for all theadditional polution they create to sell us new stuff.

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