Gareth Hughes

Why would NZ actively disadvantage clean energy?

by Gareth Hughes

Today’s DomPost had an excellent opinion piece around clean energy, penned by the chief executive of the NZ Wind Energy Association. My priority this Parliament is to protect our environment and climate by stopping risky deep sea oil drilling and promote clean energy opportunities.

You will note the Wind Energy Association are not asking for subsidies and special favours, they are just asking for a level playing field.

The International Monetary Fund is calling for a move away from all fossil fuel subsidies, which it says totalled nearly US$2 trillion (NZ$2.36t) in 2011, or 2.5 per cent of the world’s gross domestic product. This estimate includes direct subsidies and indirect subsidies, such as the environmental costs of using fossil fuels….So, the cost of renewable energy policies pale in comparison to the subsidies paid to the fossil fuel industry. In the US it is estimated that the fossil fuel industry has received US$447 billion versus the renewable subsidy of US$6b over the past hundred or so years.

New Zealand has very supportive policies and subsidies for the fossil fuel sector. Successive New Zealand governments have systematically sought to reduce costs for this industry by increasing certainty – either through provision of research facilities, tax incentives for investment or help with marketing the industry to overseas investors. In particular, the Government has a favourable taxation regime for oil exploration, funds data acquisition and invests in research to support the fossil fuel industry.

In New Zealand we have seen $46m a year in tax breaks for oil companies (already one of the most profitable sectors in the world), free exploration and survey data and Emissions Trading Scheme pollution subsidies. The Government also has what looks like an open-door policy to oil lobbyists, crafts and passes law in their interests under urgency; opens up huge swathes of our waters for oil permits with no public consultation; bans protest at sea; takes away public say in consenting and literally calls the Navy when protesters get in their way! New Zealand under National is looking more and more like a petro-state.

Eric Pyle points out:

We are ranked in the top 10 countries for policies that are favourable for oil and gas exploration. However we rank 39 out of 40 for policies that support renewable energy investment. Our neighbours on this list (prepared by Ernst and Young) are Saudi Arabia, the Ukraine and Greece.

New Zealand has a huge clean energy opportunity but as the Pure Advantage group of successful Kiwi business people point out we risk missing out. The Government is ‘putting all the eggs’ in the oil basket and is disadvantaging renewables. We will never compete with Saudi Arabia for oil drilling but we can compete and prosper selling clean energy technology and services that the world is crying out for. Half the words installed geothermal capacity has come from New Zealand; we are leaders in this field and could be exporting these skills. We know there are four times as many jobs in clean energy, public transport and energy efficiency than in fossil fuels. We have a wealth of clean energy options that Price Waterhouse Coopers estimate could be a $22 billion economic opportunity for New Zealand. More capital was invested in renewable electricity generation than all the fossil fuel and nuclear combined in 2011 so we shouldn’t be looking to the past but should orient towards the future.

The smart strategy for New Zealand should be to focus on our clean energy strengths and not actively disadvantage the renewables sector by lavishing public subsidies, government leadership and legislative focus on oil drilling.

New Zealand needs a separation between oil and state.

Published in Environment & Resource Management by Gareth Hughes on Tue, October 22nd, 2013   

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