The Green Growth Advisory Group report

Over the weekend, the Government released the report of the Green Growth Advisory Group (GGAG). The GGAG is appointed by the Government and headed by Phil O’Reilly from Business NZ.

The report is a timid acknowledgement of the growing global and domestic green economy and the opportunities and risks that creates for New Zealand. As such we have welcomed it. Here are a few thoughts about the full report:

1. The report recognises that our ‘clean green’ brand is essential to our economy and that any damage to that brand will damage our economy — damage in terms of market access and the premiums received for our exports. It points to risks to the brand from water pollution, waste management, and greenhouse emissions where we are performing poorly.

2. The report acknowledges that some of our traditional exports have very high carbon emissions per dollar, or high carbon intensity. And that is a major problem.

3. The report recommends government procurement to put a greater emphasis on sustainability. The government procures about $30 billion of goods and services a year so greening this enterprise would be transformational for the economy.

4. The report recommends that the ‘innovation system’ (i.e. science, research & development etc.) should also be greened up by the Government introducing sustainability criteria into the work of CRIs, universities, and policy providers.

5. It wants greater support for small and medium-sized enterprises embracing green economic opportunities.

Missing in action
1. The really big missing element in this report is the cleantech sector. This has been identified globally as the critical fast-growing green sector. The report even has a graph of carbon intensity by sector that shows our traditional sectors such as meat, dairy, and the Government’s favoured sector, minerals, have a high greenhouse intensity while another mysterious sector called ‘Other’ has low greenhouse intensity. ‘Other’ of course includes cleantech and high value manufacturing but the report doesn’t dwell on this very significant finding. NZ Trade & Enterprise have identified cleantech industries as having huge potential but not so the GGAG.

2. The consideration of green pricing mechanisms was explicitly forbidden in the Terms of Reference of the GGAG, so they couldn’t make recommendations about the huge subsidies found in the ETS or the glaring lack of a price on the commercial use of water.

1. The extensive section on mining is quite odd in the report. It recommends that we need a conversation about the benefits and costs of mining to see if we can find a national consensus. This is fair enough so far as it goes, but it ignores the huge environmental risks with some of the Government’s favourite projects like deep sea drilling. When Nick Smith was asked what this recommendation meant, he said that it meant that people needed to be educated about the benefits of mining. National have turned a ‘conversation’ into ‘re-education’ effectively saying, “Mining is always good, and if you don’t think so now you will think so after Straterra and National have educated you”.

2. The biodiversity offsets section is another surprising addition and a sop to the mining sector. Offsets have traditionally worked like this: There are two pieces of high biodiversity real estate — one on conservation land and one on private land. A mining company says if you let us destroy the biodiversity on the conservation land then we will offset this loss by giving to the conservation estate the biodiversity on our private land leaving the net biodiversity changes on the conservation land about the same. However, from the point of view of the environment, at the end of the day there is only one piece of high biodiversity land remaining where originally there were two. And that is somehow good for the environment?

The Government’s economic agenda is at complete odds with the direction of this report. National are subsidising intensive agriculture, through irrigation and ETS subsidies and low water quality standards; mining, through mapping information paid by Government, very low royalties, and light environmental protections with little liability for miners; road freight, through free use and extensive investment in new motorways. Yet intensive agriculture, mining, and road freight have very high greenhouse and environmental footprints. The report specifically says it doesn’t think we should pick cleantech as a winner but has nothing to say about the Government picking intensive agriculture, mining, and road freight as winners instead.

Conceptual gaps
And the big conceptual lacuna is how to match GDP growth with reductions in our economy’s environmental footprint. Because growth is a religion for National (and Labour), it is not possible in this report to have a rational discussion about the ability to decouple GDP growth from increases in resource use and pollution production.

22 Comments Posted

  1. A problem with “growth in our standard of living” lies with trying to measure it. I suggest that one measure is that of how much time needs to be spent to achieve a set of goals, which could include being warm. This time includes the time at work to earn the money to pay for the heaters (whatever form they might take) and the fuel or electricity, but it also includes the time taken at home to service the heaters, e.g. chopping wood, cleaning out a fire place, etc. Some improvements in standard of living extend life span, so a measure might be “how much free time does each person have over their lifetime after achieving a certain level of comfort?”, which would then take into account the life of the appliances as well as the lifetime of the individual. If this level of comfort includes being able to keep up with the news and connecting with friends, then internet access and the like can also be measured, and we can start considering such options as being able to browse the news while travelling on public transport versus having to drive a private car.


  2. Thanks – useful discussion. I like the idea of “growth in our standard of living” and measuring GDP using different parameters, but Marilyn Waring was onto that years ago and nothing seems to have changed. Maybe Bhutan has the right idea, using happiness as a measure of the country’s wellbeing.

  3. The “growth” that we should be aiming for is growth in our standards of living. Material posessions are just one way of improving our standard of living, but growth in the amount of possessions is not a good measure of the effect on our standard of living. Consider longer-lived light bulbs – the quantity sold drops but our standard of living improves because we don’t need to change them so often. Or consider multi-function appliances – again the number required drops but the functionality remains (if done right) and we have less clutter. Improvements in efficiency are also good, but don’t show up in GDP. Healthcare. Education. Access to information via the internet. There are a lot of areas which directly impact our quality of life but which GDP fails to capture well, if at all.


  4. Jean,

    Don’t be under any illusion; it will take more than biking or bussing to work to make a sustainable society. I’m not sure about the term “more sustainable”; does that mean “less unsustainable”? Whether it’s achievable or not, our target should be sustainability. I can’t see how anything can stay the same in a sustainable society, which may be part of the problem that political parties, who want to move toward sustainability, face. No one wants to contemplate massive, total, change.

  5. Money is the only way, but not the way you think.

    The whole planet is addicted to all those nasty ideas because it is using money backed by debt, which requires interest to be paid which requires more debt to create more money that has more interest to be paid that requires more debt to….

    It is wrong to base our MONEY on debt. You can borrow and pay interest and do all the other silly things you can imagine with debt, but you cannot use it to back your money. That is the path to hell. It is paved with “fractional reserve” banking.

    This is the key though, because if WE were to change OUR money (and we New Zealanders could do that) to represent work DONE rather than debts, the whole global economic house-of-cards would collapse by lunchtime.

    Because people don’t like debt based dollars and the power they give the banks over our governments. They may not realize they have an alternative, but it is there. Always has been.

  6. Isn’t that the whole point? If the world is completely hooked into a financial-economic-social system dependent on increasing GDP, unsustainable use of finite resources and a NIMBY attitude, how do we even start to move towards a more sustainable world? If “green growth” is a contradiction in terms, how do we convince people to give up their gas guzzler and take a bus or bike to work? Is money the only way?

  7. Coming back to “green growth” – which seems like an oxymoron – to me, it seems that a major purpose of the Green party and the green movement generally is to pick apart exactly what both of those words are used to mean and to confront or redefine them.
    While there is a start here, the discussion needs to be a lot more fundamental. Some things you simply cannot grow, only conserve, protect and manage: land and its ecosystems and water are the major ones.
    What can you grow? Some things: plants, awareness, ingenuity, communication, ideas, and other abstract things that we need if we aren’t going to foul the nest irretrievably.
    You can have green growth, but it isn’t necessarily that tangible. It certainly isn’t about money, but about responsibility and sharing, two foreign concepts to the corporations who seem to be the main force behind global politics.

  8. The limits of comparative advantage are real. In addition to the issue expressed at the link, the unbridled international “free trade” embraced by National and its fellow-travellers gives companies more power than sovereign governments.

    That is not acceptable. Not even close. It permits every regulation protecting the environment, the rights of every worker the taxes paid and every other condition of production to be arbitraged across national boundaries in an endless search for the bottom.

    We are already “Mexicans with Cellphones”. Our best talent is exported to Oz. We cannot be “one big farm” and maintain our standard of living, or even employment for most of our people.

    The PROBLEM is things like the TPP.


  9. Actually, we would be better at wind that matches our conditions than the Europeans… we have more of it.

    We also might well save ourselves a lot of foreign exchange if we made things even though we are NOT “better at it” than everyone else.

    I’ll suggest again, that moving the NZ dollar to a redeemable form, issued by the government, not private banks, and backed by our power generation capacity… would alter the equations around monetary exchange in a way that would make it possible to build a lot more stuff locally. Yes, things would be more expensive – with the flip side that we would owe nothing (long term) to anyone.

    Right now we are systematically stripping assets away from future generations. This is theft. It has to stop.

  10. The government isn’t picking Agriculture as a winner, it already is established as a winner. It’s the backbone of the NZ economy.

    Large-scale success in the cleantech sector, on the other hand, is a terribly uncertain prospect: NZ exporting clean technology to the world? Tell us why we would be better at it than European, Chinese, or US cleantech companies. At the very least, success would require joining a trade bloc (read: TPP) to ensure full protection of IP and costless integration into global supply chains.

  11. Does the Green Party have a discussion paper on New Zealand’s ability to decouple GDP growth from increases in resource use and pollution production? It would be very useful to see how (or if) this could be done. Can we replace this economic model with a more sustainable one (as Paul Gilding suggests) and if so, how?

  12. SPC,

    we must decrease carbon intensity in production as we grow the economy. Thus growth does not exacerbate resource scarcity

    Growing the economy is not green and, at some stage (possibly around now), becomes impossible. Decreasing carbon intensity sounds great but I don’t think it has ever been done for a self contained economy (the only such one I know of now is the global economy) that reports economic numbers objectively. But, even if it were possible, it is not just carbon emitting aspects that would need to change, efficiencies would need to be made across the board as resource deplete.

    Growth will always exacerbate resource scarcity once scarcity bites (if growth is even possible in those circumstances). I find it incredible that people still cling to the hope/dream of sustainable growth, instead of getting to grips with reality.

  13. Unlimited growth forever is not possible; however growth for a goodly few years is certainbly possible, and is the only approach which will enable New Zealand to survive in the existing world model.

    There will come a time when re-evaluation is necessary.

    If Goff had an alternative, I’d have loved to have heard it. Thats almost as much of a stretch as the PoA CEO having a good idea.

  14. Someone who still thinks unlimited growth is possible in a limited world.

    For a sustainable society we need to redistribute limited resources so that a few do not rob the resources which were made by the efforts of the many.

    At least Goff’s Labour had a sensible alternative to NACT’s disaster capitalism.

  15. fund-raising plans – include a CGT, an earthquake levy, and water use charges etc

    None of these are actually “fund raining” plans, they are just redistributing what we already have, so it is at the very best a zero sum game, and all those are unsustainable (hint – if an (eg) earthquake levy is a good idea, then a bigger earthquake levy must be a better idea, so raise the levy rate by a few percent per annum forever)

    This is quite different to increasing GDP, which is growth, which is a genuine increase on funding ability.

  16. But the Government’s not asking, “Shall we?”
    They’re declaring, “We will!”
    Spot the weakness in that “conversation”.

  17. He was not speaking to the funding matter and there the Greens fund-raising plans – include a CGT, an earthquake levy (Brian Easton now supports this and more), and water use charges etc.

    The theme is sustainability – his point is that we must decrease carbon intensity in production as we grow the economy. Thus growth does not exacerbate resource scarcity, and as other nations are also looking to achieve this also – there are economic opportunities producing (green tech) for this growing demand.

  18. Russel says “Because growth is a religion for National (and Labour), ..”

    The Greens intend to spend billions more spread across pretty much every sector compared to Labour or National, so the reality is that you are relying on growth far more than the two main parties.

  19. There’s no such thing as “green growth” but it’s odd that this group apparently want to put greater emphasis on sustainability but appear to think it’s an add-on. A sustainable society will look nothing like what we have now, so an emphasis on sustainability pretty much negates everything else mentioned, including mining.

    And you can’t “decouple GDP growth from increases in resource use and pollution production” unless you peel off a segment of the global economy that perhaps can do that within its segment. Ultimately, growth means consuming more resources and destroying more habitat, so it is purely wishful thinking to want growth without those things.

  20. Biodiversity offsetting is even less useful if the land the mining companies purchase for the conservation estate can then subsequently be used for other damaging purposes in future. Just because it becomes part of the conservation estate doesn’t mean it is protected in perpetuity – look at Denniston.

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