by David Clendon
The NZIER has put out another of their ‘Insights’ papers, this time highlighting just how vulnerable our exports are to consumer perceptions that our goods are not sustainably produced.
The US and some EU countries are indicating that border taxes may be used to defend their local producers against imports from countries that have ‘soft’ climate change regimes. The ETS that the government bulldozed through Parliament under urgency last week takes ‘soft’ to a whole new level; we’re talking marshmallows here!
While border taxes would be quite tricky to impose without contravening WTO rules about trade restrictions, and may not present a danger to us in the short term, we can’t be too sanguine about the longer term.
A much more urgent risk is that we are perceived as a country not making serious attempts to reduce our carbon emission, which will give our competitors an opportunity to turn market preferences away from our export products and services.
Given that we now have an ETS with no effective cap on emissions, and that does little to provide regulatory or financial incentives for our major polluters to change their ways and reduce pollution, we have handed our trade competitors a very handy club to beat us with!
Fortunately we do have some smart business people who understand the opportunities for genuinely ‘green’ or sustainable products or services that appeal to the growing number of socially and environmentally conscious consumers (the LOHAS segment).
What a shame though, that any success they have in securing a share of this affluent, high value market will be despite the actions of the government, rather than being supported by it!