Jun 28, 2008

Every New Zealander Should Read Fran O'Sullivan This Morning

We agree with every word. Fran makes the case for taking more time to get the emissions trading scheme right, and the need for a bipartisan approach that will result in a policy that stands the tests of time. We quote some of her comments:

Helen Clark's Government is at a critical crossroads on climate change.
It can rush blindly ahead and enact legislation that will give rise to the biggest economic restructuring in a generation, with huge negative consequences for smaller Kiwi companies and workers in the medium term.
Or it can reach across Parliament and seek to forge a genuine multi-partisan consensus in the knowledge that Labour's chances to milk global warming as an election issue will be stymied.
National's John Key could use his vaunted street smarts to call Clark and offer to remove climate change from the election agenda so the two major parties can work together to forge legislation.

We thought that National had been offering this since the last election...

Clark, who has portrayed herself as an international climate change warrior by setting a goal for New Zealand to be one of the world's first carbon neutral countries, will not want to back down. She has so exaggerated New Zealand's record internationally on combating climate change - when emissions have continued to soar during her Government's time in office - that her credibility is jeopardised.

A bit mean Fran, but true

The real problem is that Kiwis are unprepared for the enormous changes that will follow the introduction of the Climate Change (Emissions and Renewable Preference) legislation.
The economy will undergo an economic restructuring that will dwarf the changes wrought by Sir Roger Douglas in the mid-1980s. Higher prices for basic inputs like electricity and fuels will ensure that many jobs are lost during the transition to a green-collar economy.
This is inevitable. It is the upshot of transforming to the new international paradigm where exporters from high carbon-emitting economies face emerging trade barriers.
Clark and other Cabinet ministers who were part of the Douglas-reform era Government, repudiate the "misery" that was inflicted by ripping the struts out from under farmers, companies and families during the 1980s without introducing measures to reduce the pain of adjustment.
But now they they seem hell-bent on repeating the exercise. Let's not be in any doubt. Jobs will go.
A report by Australia's influential Commonwealth Scientific and Research Organisation (CSIRO) this week forecast some three million jobs in that country's polluting industries could be under threat after an emissions trading scheme comes into effect in 2010. The Australian jobs market would recover from 2017 and then soar as new jobs were created in areas like renewable energy, energy and water-smart buildings, green appliances and other sustainable lifestyle products.

We made the 1980s analogy ourselves yesterday. Not a good time for jobs to be going. And which jobs will be going? It will be Maori and Pacific Islanders who suffer most.

Kevin Rudd's Government is already facing up to major transitional costs. But here, it's still head-in-the-sand territory.
The problem is most business/land/ agriculture lobbies point to negative consequences without conceding the potential upside, while the NZ Business Council for Sustainable Development points to new jobs that will be created but does not focus enough on the downside.
It is incongruous that Clark has not drawn on the 1980s to develop programmes to offset the transition.

Rudd has Penny Wong, we have David Parker. It is not just the NZ business Council for Sustainable Development that sees opportunity Fran. You are being far too narrow. Have you not noticed the big accounting firms rubbing their hands with glee? Then there is the NZX with their baby TZ1. And then there are the commentators like Rod Oram who make heaps on the speaking circuit.

Parliament's finance and expenditure committee hasn't grappled with the big picture, despite official reports warning of the consequences to jobs. It is an outrage that the select committee took a mere 16 hours to consider more than 60 reports on the Climate Change (Emissions Trading and Renewable Preference) bill and was given just three days to consider more than 1000 amendments.

Yes, this was not Charlie Chauvel's finest hour.

A reality check - it is a given that New Zealand does need to put a price on carbon emissions so that the transition to a low-emission economy gets under way.
But forcing through ill-thought-out legislation by making yet more absurd concessions to get minor parties like NZ First over the line in a re-election frenzy will not increase either Clark's reputation or that of her Government.
Business and environmental lobbies are now deeply concerned at the results. Environmental lobbies believe there are now so many exemptions that costs will unfairly fall on smaller businesses and families. Businesses warn of a transfer of wealth elsewhere.
Some of this worrying could be eased if the Government built a safety valve into legislation to protect against high and volatile carbon prices. But, as it stands, an economy where exporters are hostage to the vagaries of the dollar is about to be hit by more uncertainty.
Surely it is in New Zealand's interests for both major parties to come up with a solution that will stand the test of time.

Agree fully