The Old Economy is over, but National hasn’t got the memo

There are many shortcomings a committed climate hawk (of which, I am one) could find with the COP21 Paris agreement. There is no legally binding commitment to reduce climate pollution, for example. But the agreement is nonetheless a landmark event. All the countries of the world have signed up to an agreement to limit global warming to well below 2 degrees centigrade, ideally 1.5C. This effectively signals the end of burning fossil fuels sometime this century.Image2

As Eric Beinhocker, Chief Director of Oxford’s Institute for New Economic Thinking, said today, the Paris agreement means the global conversation has moved from debate about whether we should do something about climate change, to how we are going to limit warming. This is progress, even if we are pressed for time to get agreement on the how, because we probably needed to be at this point 15 or 20 years ago.

Beinhocker was the keynote speaker at the OECD’s 4th annual Green Growth and Sustainable Development Forum, which I attended this week on the Monday following COP21. His message was simple and stark: the math says to achieve the goal of the Paris agreement, we need to be net carbon zero by 2040 at the latest.

That means we have around 20 years before we can add no additional greenhouse gas emissions to the atmosphere.

Given the long life of most energy and transport infrastructure, he and his colleagues at Oxford have looked at a carbon budget that would get us there in time. It requires from 2017 (now, basically) all of our new energy infrastructure projects to be net zero carbon.

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This must be the age of renewables, and all the legacy projects conceived in the past need to be chucked out in favour of projects that will reduce carbon pollution. From next year, energy policy and investment in infrastructure must reduce greenhouse pollution.

In New Zealand, the National Government has reacted to the Paris agreement by saying everything is sweet, no need to change course. This is madness. It is inconsistent with the maths. National’s policies and infrastructure are continuing to lead to an increase in pollution, which is completely inconsistent with meeting the Paris goal.

Another speaker at the forum, Jan Rotmans, from the Dutch Institute for Transistions at Erasmus University Rotterdam, said he had stopped using the word “green”. Post the Paris miracle, he said, there is only the Old Economy and the New EcImage1onomy. The fossil fuel economy will not survive.

The Green Race is on, as Sir Nicholas Stern said, and it will be bigger than the industrial revolution. But in New Zealand, National’s policies on transport, energy, housing and buildings, even most of the Business Growth Agenda, have locked us in the starting blocks of the old economy.

The Green Party will continue to champion the New Economy. Will you help us?

 

11 thoughts on “The Old Economy is over, but National hasn’t got the memo

  1. Requiring all light bulbs to state their light output (in lumens) on their packaging would also help people to chose which was most efficient.

    Trevor.

  2. Education is the key to getting the people on side.

    For example, LED light bulbs are now advanced enough to be replacements for incandescents in many sizes. A 10W LED can replace a 100W incandescent in my fittings with comparable light output (into the room) and similar colour (warm white). The cost is 10-15 times that of the incandescent. However the life is more that 10-15 times, so the bulb cost works out about the same – around $1 per thousand hours of light. The big saving comes from running costs – around $2.50 per thousand hours of light versus $25 per thousand hours of light. The other benefit is less heat into the room on hot evenings. (Not having to change the bulbs as often is also a nice benefit.) But how many people know these economics? It would help if the government required light bulb packaging to include the expected bulb life.

    If the people are not to oppose moves to decarbonise our society, they need to be shown that the moves will not seriously impact their quality of life.

    Trevor.

  3. Although dbuckley I have some sympathy for the notion that the people drive things, I look at how the discussion about Climate change economics is in NZ, the poor presentation of the risks costs show to me this National Government isn’t shy of smudging the facts, just like the oil, mining, and drug industries and as they are historically heavily involved in secret processes with International military cliques. I feel John Key is either an ignorant bit player or an active participant in the psychopathic power struggles. If he isn’t a bit player then the Economic schools are putting out well qualified clones.
    When you add the way he treats the Greens he is smudging the facts and could easily create discussion if he was really leading.

  4. Solid comments on energy Trevor. And gas vehicles make huge sense to me. As an organic farmer, I’m never going to have the money for an electric car. And if the Greens want to tell farmers they aren’t allowed diesel, then I will run for cover. We still need lots of diesel for tractors (and trucks). Petrol is good for chainsaws 🙂 Hey, if we plant more trees, we can harvest more too.

    How Fonterra factors into all this is the key. (So good luck to Eugine, no pressure 🙂 Hmmmm, this is a tough one to comment on.
    Fonterra are currently bankrupt, ok. So they’ve dropped the price, and now the farmers are bankrupt too, hmmmm.

    Be nice to farmers.

    If farmers put their own Cooperative though the receivership laws, would a regional NZ dairy system survive against international competition? Maybe, but they think not. They are probably wrong about their fears, if they are supported though the transition. Lets be honest, Fonterra have always dumped at low price on the global milk market. They only really used there size advantage to globalise, weird. But when the bank is breathing down you’re neck, the last thing you want is risk. That also makes going organic unattractive. I can’t say that NZ reducing the size of the dairy industry is really an answer. A slow transition to mixed farming is a natural and positive outcome, but the labour and skills shortage is obvious. It’s unfortunate that the NZ govt hates refugees.

    If the milk price rebounds, we must be quick to remove any drivers that might encourage re-growth in the sector.

    Hey, if farmers are bankrupt and scared of the banks… Are the banks not also bankrupt? Get the banks into receivership first!

    The Private Banking Solution – could even be the key to the low risk restructure of our agriculture sector.

    (and sorry dbunkley for previous comments, but media propaganda has really got under my skin lately)

    Don’t panic, go organic.

  5. Building companies don’t seem to have received this message yet. Nearly every higher-spec new house has gas hot water, a gas fire and a gas hob. Even night rate electricity using a resistance element is cheaper than gas hot water. Heat pumps are much cheaper to run than a gas fire and less risky too. A gas hob is nice, and cheaper than an induction hob, but if you can ditch all the gas appliances, then you save on the bottle or connection charges.

    Save the gas for our vehicle fleet, (but only as a short term measure).

    Trevor.

  6. Crikey dbuckley, examples of New Economy? Its just our party values in action. Local and without fiat money. It’s not nuclear science. And as for bashing The People 🙁 If you want to bash something, bash a television at 6:02pm, channel one.

  7. I don’t really disagree with anything you say, Oldlux, but frankly, the folks in this blog aren’t the problem. Surprisingly, perhaps, the government aren’t really the problem either; they’ll do whatever their opinion polls and focus groups tell them they should be doing. A government such as the Nats that are devoid of principles and are focus group driven may the the most representative democracy we’ve ever had.

    No, the problem is The People. The People basically don’t want any restrictions on their activities, any limitation on their ability to buy desirable foreign-made goods, the flat screen tellys and iThings, they want to be able to buy cheap cars, cheap fuel, cheap light bulbs, and generally pretend that we are a genuine first world country that its great to live in, like it was back in the 1950s when New Zealand had the third highest standard of living on the planet. You note that “… we could choose to recycle it into the productive human resource/health sector and enhance.. ” – “we” could, but there is a difference between the “we” that you perhaps thinmk could make this happen, and the “we” out there who might well not want a bar of it.

    And that is before I agree with you on the bollocks that is pouring unfeasible amounts of money into non-productive activities such as land. The people that this would need to be wrested from are the same people who send a message, loud and clear, to the those who may have considered calling for CGT.

    It is often said that in a modern democracy the voice of the people doesn’t matter, but sometimes, it does, and the way that CGT was seen as a turning point in Labour’s spectacular election bid failure, brought about by a relatively small number of voters is instructive.

    Thus I’m moderately convinced that although many countries may have signed up to this agreement, outside of totalitarian regimes such as China, I am skeptical that democracies will be able to bring the required changes in, The People will simply make it impossible, as they are more interested in themselves than the future for their great-grandchildren.

    Therefore, the only changes that can be made by government action is action that the government believe will not harm of risk their reputation of electoral standings, or that therefore wont impact the people. An opposition party desperate to roll a sitting government may make reversal of some unpopular action a winning strategy. We only need go back to Ronnie Reagan rolling Jimmy Carter this way, and the solar panels on the White House being “gone by lunchtime”.

    So yes, I remain intrigued by a “new economy”, by some concrete proposals of what this means, and the plan of how it can be implemented in a democratic country.

    One thing is certain – we continue to live in interesting times.

  8. I suggest dbuckley have a little more think. A new economy does not preclude the process of incorporating old processes and objectives that work. Instead of so much of our productive surplus of cash going into land and resource asset value we could choose to recycle it into the productive human resource/health sector and enhance the human energy capacity of the system. Our agriculture sector has upscaled machinery heaps in just my life time and I believe, generally, has only really made gains of scale of process. Biodiversity loss and water quality damage are huge costs that have taken our natural low cost recreation such as swimming away. More swimming means less electricity cooling as well.
    If we lower the agriculture intensity and focus on planting productive trees on much more of the marginal land we create another huge food/energy resource. Walnuts and chestnuts are examples where crops are being damaged by climate change overseas and the long term nature of these trees is hugely beneficial. Walnuts have already been selected by cultivar for areas by forward thinking people. The only hurdle to this type of transition is allowing banks to sell up willy nilly the struggling conventional farms to foreign interests looking at energy intensive corporate farms.
    To make an unbridled land use/value scenario is counter productive to smaller scale innovation that the unplanned “success” of dairying has illustrated. The capital values are too high as the tax/land management systems capitalised the future into the price, out of the common sustainability.
    This change of emphasis alone would head us back to a golden era of common good that was here after the war years.
    Rail was far more used and covered more of the country when roading was far less capitalised, again ignoring the costs to the common good. My father used to go to the city by rail or bus, and didn’t have three or four vehicles in his fleet. If it wasn’t important he didn’t go, and we all have to learn these basic lessons.

    Survival in all this is a matter of wise choices, with a revamped way of allocating resources, and true costs of method.

  9. As this blog has backassward comments, skip down to read the intro.

    Sector two, Energy. 43% of our emissions. My oh my. The good news, of course, is that 80% (on average) of our electricity comes from renewable sources, so we’re already well ahead of the pack there. Could do more, and I will of course have the obligatory jab at the greens for blocking Project Aqua: Looking at the current (ugh!) balance of electricity generation [from em6live], if Aqua were alive now our coal generation at this moment could be zero. Replacing gas will be the challenge, not coal, as gas generation, other than using gas and emitting CO2(!) is close to perfect.

    The problem is that we are profligate with our use of electricity. I’d like to see ordinary light bulbs cost about ten times what they do now. This would encourage people to stop buying incandescents and start buying LEDs or CFLs. Most other consumpters of electricity have come down over the years. A flat screen telly uses less juice than a CRT, computers are more efficient, heat pumps less than resistance heaters.

    But the biggie is transport. Encouraged to read that the boss of MainFreight is a fan of rail, noting that road costs 4.6 times as much per KM as does rail. As long as rail goes in the right places, of course. [aricle]. Be nice to have a more comprehensive rail network.

    But cars. We have lots of cars. And we have lots of shitty old cars that are inefficient.

    There is no doubt that something like a car is the future of transport, only it wont be smokey and gas guzzling, it will be sized appropriately to the journey and occupants, and it will drive itself. The problem is getting there.

    And with the constant increase in the number of people in Auckland in particular, that city will have to convert itself into a high rise, slum ridden metropolis, so work, shops and entertainment are, for most people, very close to home. Maybe then local public transport could work effectively.

    There are multiple challenges ahead, and they are not simple, and some wont be popular.

  10. An interesting challenge from Julie Anne. I’m not sure I know what a “new economy” is, but lest have some fun with our existing economy.

    A little out of date, but it’ll do: [New Zealand’s Greenhouse Gas Inventory 1990–2011 and Net Position: Snapshot April 2013] – Agriculture: 47% of emissions, energy 43%, and 10% noise.

    Lets start with agriculture. 47% of our emissions, 34.4MT of CO2. A big number. These emissions come in large part from animals and activities around animals, and animals have a finite lifespan. Dairy is the big gun, we export 95% of our dairy output, so within a generation of cows we could stop dairy for export, by just passing a law severely limiting breeding. And with sheep, and the like. In a few years we’d have killed that 34 million tons. We’d be down to perhaps 5MT from agriculture. What a result.

    Except for a few flies in the ointment. Firstly, our income from agriculture exports would plummet to almost zero, resulting in a country much less well off. Second, we just decimated our agricultural sector, so there are a lot of people without jobs, not just on the farm, but in the entire supply chain. And thirdly, and this is the kicker, the world isn’t going to go without beef and lamb and milk, so other countries will then take up the slack, and they will build up their farming. And with that, the emissions we stopped will just start again somewhere else. So the actual impact of us stopping agriculture is a climate impact of zero. Sure, it looks good on our carbon balance sheet, but at a planetary level, its a zero sum game, the planet didn’t gain a thing.

    I have a suspicion that we are quite an unusual country, and the “standard” model of emissions reduction doesn’t fit us well, when 47% of out emissions are from one sector of exports.

    So from a planetary perspective, us not farming as much is not a win. Us finding better and less emissive ways to farm is a win, but just stopping wont help the world at all.

    This is longer than expected, so I’ll break here.

  11. Great stuff Julie Anne, I am curious to know if any Government or Labour Party MP’s went to this important OECD meeting. I feel that many participants in this sort of process do so only to advance their self interest, instead of creating a common ground of understanding and process. Good on the Greens for being beyond that.

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